Mulberry Group in demand after it returns to profit

Mulberry Group PLC (LON:MUL) is in fashion after moving back into profit and painting a rosy outlook picture.

Full year revenues at the luxury brand best known for its handbags fell 23% to GBP115mln, as COVID-19 closed the majority of physical stores in the period.

But it moved from a GBP14.2mln loss to a GBP5.9mln profit, helped by government support programmes, a positive result from its Asia business after years of investment and a 55% jump in digital sales.

Margins improved thanks to lower markdown sales, and it also established a European distribution facility to support online sales following Brexit.

It also helped the community cope with the pandemic, including producing more than 15,000 reusable PPE gowns for frontline NHS workers and working with the Felix Project to provide over 177,000 meals for those in need.

The current year has started well, with overall revenues up 45% on last year.

Chief executive Thierry Andretta said: “We have delivered a robust financial performance and have made good strategic progress in our journey to build Mulberry as a leading sustainable global luxury brand.”

Mulberry shares are up 7.03% at 310.4p.

3.09pm: EKF Diagnostics boosted by strong first half performance

EKF Diagnostics Holdings plc (LON:EKF) has moved higher after it a positive trading update.

The company, which specializes in developing tests for use in anemia and diabetes diagnosis and management, said half year revenues rose from GBP26.33mln to GBP38.56mln and it expected to report earnings of around GBP12.75mln, up from GBP8.93mln.

A good second quarter performance reflected improved trading in its core business as well as strong demand for its contract manufacturing services for COVID-19 sample collection devices and associated kits.

It was confident that trading for the full year would be in-line with its forecasts, which had already been upgraded.

Its strategy is to create a business which, apart from any COVID-19 related revenues, was capable of generating significant double-digit growth in adjusted earnings over the next three to four years.

Its shares are up 4.51% or 3.2p at 74.2p.

2.20pm: Furnishings group lifted by director share buying

Sanderson Design Group PLC (LON:SDG) has jumped 14p or 8.49% to 179p as non-executive director Christopher Rogers bought 35,000 at 167.4p each.

Rogers now holds 110,000 shares or 0.15%.

This latest purchase came on Tuesday, the same day the luxury interior design and furnishings group issued an upbeat annual meeting statement. It told shareholders that the strong trading seen in the early part of the year had continued, and it expected profits for the six months to the end of July would be ahead of expectations.

12.12pm: Foxtons climbs as it considers sale of mortgage broking business

Estate agency Foxtons PLC (LON:FOXT) has seen some buyers after confirming a report it is looking to sell its mortgage broking business.

Mortgage Solutions said advisors had drawn up a prospectus to show potential buyers of the Alexander Hall Associates operation.

In response Foxtons said: “Further to recent press speculation, Foxtons confirms that it is reviewing strategic options for Alexander Hall Associates Limited, its mortgage broking business, which could include the potential sale of the business.

“A further announcement will be made if and when appropriate.”

Foxtons’ shares are up 4.81% at 49p.

11.00am: Payments group boosted by better than expected performance

PCI-PAL PLC (LON:PCIP), which specialises in secure payment services, is another company to announce it will beat market expectations.

Its shares are up 8.14% or 7p to 93p after it said full year revenues would come in at around GBP7.3mln, up 66% on last year and ahead of the market’s GBP7mln forecasts.

It said its full year loss with be marginally better than the anticipated GBP3.6mln.

It has started the new financial year strongly and has signed contracts worth GBP9.5mln, well on the way to the market forecast revenues for 2022 of GBP10.4mln.

Chief executive James Barham said: “We have had an excellent year despite the challenges of the pandemic, making continued positive progress against our stated strategic objectives to be the global market leader in cloud technology in our space; to achieve scale selling through best-in-class reseller partners; and to provide our services globally in the cloud without the need for on-premise hardware.”

“By pursuing these objectives, we have been well positioned to meet growing customer and partner demand for cloud solutions, further justifying our chosen strategy and allowing us to capitalise on what has been a challenging time for many of our competitors.”

9.42am: Tube maker drops after warning on finances and putting itself up for sale

Tricorn Group PLC (LON:TCN) has slumped by a quarter after the maker of pipe and tubing assemblies for the energy and transport markets, put itself up for sale.

The company has seen six month revenues slip from GBP8.45mln to GBP8.3mln, and while it has cut its pretax loss from GBP572,000 to GBP335,000, it says the impact of COVID-19, the rising cost of materials and shipping delays will continue to put pressure on costs and margins in the near term.

Crucially, it added: “While the group is currently operating within its borrowing facilities, the near term reduction in profitability and the increased pressure on working capital mean that these facilities alone will not provide the group with the necessary cash to make the required investment to deliver the turnaround strategy and return the group to profitable cash generation.”

So it has started a strategic review which could lead to a sale of one or more of its businesses or indeed the whole company.

Its largest shareholder, non-executive director Roger Allsop who holds 34.23%, is backing the review.

Chairman Andrew Moss said: “Since February 2020, as a result of the global pandemic, Tricorn has experienced an extended time span of challenging markets and turbulent trading. We have made significant changes to our senior executive team, who are focused on improving our operations and control environment and implementing new commercial strategies. Customer demand is steadily improving which is a welcome sign that the company is returning to pre-pandemic levels of production activity.

“However, poor material availability, relative to increasing demands coupled with input price inflation has continued to adversely impact the group in the quarter to 30 June 2021. Whilst management are focused on recovering the cost impact from customers the timing delay in doing so is depressing margins and impacting cashflow in the near term…

“There are a number of funding options available to the group which are currently being considered by management and we announced the launch of a strategic review, including a formal sale process.”

The company’s shares have not taken this well.

They are down 1.5p or 25% to 4.5p.

8.50am: Future forecasts market-beating results

Future PLC (LON:FUTR) is liking the look of the present.

The media group, whose magazines include FourFourTwo and Total Film and which earlier this year paid GBP594mln for the owner of price comparison webside GoCompare, has jumped 7.85% or 252p to 3462p after an upbeat trading statement.

It said results for the full year were expected to be materially ahead of market expectations after a strong performance in the second half so far.

This follows an earlier upgrade in May.

The media division has benefited from robust digital advertising revenue, the magazine business is performing in line with expectations and the integration of the GoCo Group is on track to produce the promised GBP15mln synergies.

Chief executive Zillah Byng-Thorne said : “We are delighted that the group’s strong performance has continued throughout the period, which is testament to the strength of our diversified revenue streams and global reach.”

William Ryder, equity analyst at Hargreaves Lansdown, said everything appeared to be going to plan at the group.

He said: “Investors may be wondering whether a bigger dividend will be on the cards after such a strong year. This shouldn’t be ruled out, especially with the group talking up cash generation and synergies from the GoCo acquisition. However, the acquisition focussed growth strategy will still demand more investment, so any additional shareholder returns will likely be modest.”

Also heading higher again is Cineworld Group PLC (LON:CINE).

The heavily shorted cinema group slumped on Monday – despite it being the much fabled Freedom Day – as Delta variant concerns gained the upper hand.

But after a recovery on Tuesday it is up again, 7.16% higher at 62.56p on hopes that people will be flocking back to watch films to the soundtrack of crunching popcorn and endless chit-chat.

And to add to the excitement, the long awaited James Bond film No Time to Die is finally set for release in September. Let’s hope for cinema’s sake, people still care after such a long delay.

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