BUSINESS LIVE: Bellway profits slump; Revolution Bars weighs options; Ocado customer numbers grow

Scottish Mortgage Investment Trust (SMIT) was once the toast of the City but its fall from grace over the past two-and-a-half years has upset many retail as well as institutional investors.

Renowned for its stock picking under star investment manager James Anderson, who left in 2022 after 21 years at the helm, SMIT was the go to fund for UK investors wanting access to high growth global tech firms.

Asos sales slumped by 18 per cent in the first half, with the struggling online fashion retailer on track for a revenue contraction of up to 15 per cent this year as it attempts to revive its fortunes.

The group, which has struggled since the end of the pandemic, cast 2024 as a transition year, with the focus on speeding up processes, launching new collections and getting rid of a build up of excess stock.

It also repeated guidance that it would post positive adjusted core earnings (EBITDA), positive cash generation and would return inventory to pre-Covid levels.

‘I’m excited by the performance of our new collections, while we have also made great progress in monetising inventory that built up over the pandemic and in improving the core profitability of our operations,’ Boss Jose Antonio Ramos Calamonte said.

Anthony Codling, managing director at RBC Capital Markets:

‘Bellway delivered first half results in-line with our expectations. Looking forward the messaging is its tough out there, but getting better.

‘This year is likely to be the trough year in terms of volumes and profits for Bellway, with growth of both to returning in FY2025.

‘Bellway’s activity in the land market is increasing which suggests that it can see the light at the end of the tunnel, supporting the 2025 growth thesis.

‘As ever with Bellway, the wording of its outlook statement is restrained, but we note that Bellway has a track record of under promising and over delivering. We expect the Group to quietly get on with the business of building homes and delivering value to shareholders.’

Unilever’s boss has signalled that Amsterdam is ahead of London in the race to win the stock market listing of its £15billion ice cream business.

Hein Schumacher, the Dutch chief executive of the consumer goods giant, said the Netherlands has ‘a good chance’ of hosting the division when it is spun-off.

His comments came a week after he pitched the two stock markets against each other with the announcement that Unilever will separate out its ice cream business behind household names such as Ben & Jerry’s and Magnum.

Ocado Retail revenues jumped 10.6 per cent in the most recent quarter, reflecting growth in customer numbers.

The business, a 50:50 joint venture between Ocado Group and Marks & Spencer, said on Tuesday retail revenue was £645.3million pounds in its first quarter to 3 March, as active customers rose 6.4 per cent to 1.02 million.

Volume, or total items sold, grew 8.1 per cent to 242.1 million, average orders per week were up 8.4 per cent to 414,000 and average basket value was up 2.1 per cent to £125.47.

‘Our strategy is resonating with customers and volume growth is building well,’ CEO Hannah Gibson said.

Ocado Retail stuck with guidance for full-year revenue growth in the ‘mid-high single digits’ percentage and an underlying earnings before nasties margin of about 2.5 per cent.

Revolution Bars Group could ask investors for more cash and is exploring the possibility of selling itself to a new owner, the firm told shareholders this morning

The London-listed bar company, which also owns Revolucion de Cuba, said it is exploring ‘all the strategic options available’ after what it called ‘a period of external challenges’.

Bosses said they are looking at ‘a restructuring plan for certain parts of the group, a sale of all or part of the group, and any other avenue to maximise returns for stakeholders’.

It said it is also talking to ‘key shareholders and other investors’, including Gail’s bakery chairman and entrepreneur Luke Johnson, about raising funds.

Revolution Bars added: ‘The company is not in talks with, nor in receipt of an approach from, any potential offeror relating to an acquisition of the issued and to-be-issued share capital of the company.’

Boeing has announced a clear-out of its leadership team as it grapples with a safety crisis that has left airlines furious and sent its share price plummeting.

Chief executive Dave Calhoun will step down by the end of the year with chairman Larry Kellner and commercial aircraft boss Stan Deal also bailing out.

Bellway profits slumped by almost 60 per cent year-on-year in the first half but the housebuilder has flagged an improvement in demand, fuelling hopes of improvement in the UK property sector.

The British housing market has seen signs of stability at the start of 2024 on easing mortgage rates after battling subdued demand for most of last year, but the delay by the Bank of England in lowering interest rates and incessant macro-economic concerns have tempered hopes of a better-paced recovery.

Bellway’s private reservation rate jumped 20.7 per cent to 163 per week in the six weeks since 1 February, compared with the same period a year earlier.

‘Although the economic backdrop remains uncertain, the gradual reduction in mortgage interest rates throughout the first half has helped to ease affordability constraints … encouraged by the improvement in reservations since the start of the new calendar year,’ Bellway CEO Jason Honeyman said.