Takeover is a happy end to publisher’s poor start

A TAKEOVER bid diverted attention away from another terrible set of results at ailing publisher

Quarto Group yesterday. Quarto, which publishes controversial books such as ‘The Cannabis Cookbook’ alongside more traditional titles, saw £3.8m added to its value after it revealed an undisclosed takeover bid it deems ‘worthy of due consideration’.

Despite Quarto refusing to identify the bidder and claiming there was no certainty yet that any deal will be made, its mere mention was enough to convince punters it was trying to turn over a new leaf from a weak set of results for the first half of 2017.

Quarto, which has sunk 47.3pc so far this year following the departure of its boss and the sale of its New Zealand business, said 2017 has been ‘ extremely challenging’ so far due to low order numbers and fewer reprints.

The firm also booked a loss of nearly £5.9m over the six months, down from a decline of just £309,000 in the first half of 2016, and announced that it will not pay investors an interim dividend.

Although it expects the soft trading conditions to continue throughout the rest of the year, Quarto said it has already secured its strongest autumn and Christmas publishing programme in years. Shares rose 14pc, or 19.5p, to 159p. After being hit by weakness among miners on the back of poor trading data from China in the morning, the

FTSE closed up 0.14pc, or 10.79 points, to 7542.73, a few points short of its all-time high.

Office firm IWG struggled to convince investors that its position as the market leader in the rental space was safe despite signifi- cantly ramping up new business spend. The Regus owner has doubled the amount it plans to spend on growth to £179.7m following an 8.5pc jump in year-on-year sales over the first half of 2017.

Despite seeing a 7.5pc drop in UK sales to £218.6m, the firm boasted of a jump in revenues across Europe, Asia, and America, its largest market, and said it was confident growth will continue in the second half.

But the slow rise of mature revenues failed to sway investors and analysts, who were left concerned by a 4pc drop in profit before tax over the period to £80.8m.

Broker Peel Hunt downgraded IWG to ‘add’ from ‘buy’ and cut its target price to 399p from 420p.

IWG’s shares fell 12pc, or 41p, to 302p, placing it at the bottom of the FTSE 350.

Construction firm Morgan Sindall refused to go the way of rival Carillion in its results for the first half of the year, reporting strong profit and revenue growth despite a drop in orders. Unlike Carillion, which tanked earlier this year after issuing a profit warning, Morgan Sindall reported strong growth in its fit- out division as well as construction and infrastructure.

This helped Morgan Sindall’s total year-on-year revenues jump 14pc to £1.3bn and profits leap 50pc to £23.1m, offsetting a 57pc decline in profits at its urban regeneration arm.

However, with Morgan Sindall already upgrading profit expectations in an update released last month, the strong results were already priced into its value, and shares fell 0.6pc, or 8p, to 1422p.

Investors fled building supplies firm SIG after it released a gloomy set of first half numbers.

Despite an 8.6pc jump in yearon-year revenues over the period to £1.4bn, the firm saw profits fall 20pc to £45.7m and earnings per share fall 23pc to 4.7p.

The firm also warned that macro uncertainty in the UK remains its biggest risk, and shares fell 2.9pc, or 5p, to 165.5p.