Laura Ashley rocked by another profit warning
IT WAS popularised by Hollywood beauties such as Audrey Hepburn and Katharine Ross in its heyday, but homeware giant Laura Ashley seemed a shell of its former self yesterday as it put out its second profit warning in under a year.
The retailer, which is more than 50pc owned by Asian investor Mui and its owner Khoo Kay Peng, said its results for the year ended June 30 will be materially below market expectations.
The company said it has continued to struggle against ‘demanding trading conditions’ after previously complaining of commercial pressures in another profit warning issued in February for the 2016 Christmas period.
The group said it will also be hit with an exceptional £2.8m charge stemming from the re-evaluation of its freehold property.
Laura Ashley was founded in 1953 and became famous for its floral dresses in the 1980s. Yesterday, shares fell 18.2pc, or 2p, to hit a 14-year low of 9p.
The FTSE 100 rose 0.41pc, or 29.96 points, to 7,383.85. Airline stocks were among the biggest winners after Air Berlin filed for insolvency in late afternoon trading. EasyJet rose 4.5pc, or 57p, to 1322p, IAG was up 2.9pc, or 18p, at 631p, while Wizz Air gained 4.6pc, or 130p, to 2932p.
Next fell out of fashion following a savaging by analysts at Berenberg, who downgraded the high street retailer to ‘sell’ from ‘hold’.
Analysts said Next’s refusal to fully invest online despite recognising the importance of internet shopping earlier than its competitors is reminiscent of former photography giant Kodak.
Kodak was decimated in the 1990s when it held back its development of digital cameras – despite being one of the first to make them – for fear of killing its all-important film business.
Berenberg said Next continues to be burdened by its large stores, which are restricting its ability to invest in products and free home delivery, a business model which has led online rivals like ASOS to thrive in recent years.
The broker said: ‘We believe management’s current strategy is formulated to maximise shortterm returns, rather than adapting to ensure longer-term survival.’ Next shares fell 2.8pc, or 124p, to 4271p.
Drug firm Shire was on a high yesterday after announcing a major step towards getting its treatment for dry eye disease in adults on the European market.
The group’s marketing application for Lifitegrast has been validated by the UK after the firm carried out five clinical trials. With most of the trials improving symptoms, Shire will now seek European-wide approval for the drug’s sale.
Lifitegrast is sold in the US with an awareness programme headed up by actress and dry eye diseasesufferer Jennifer Aniston. Shares rose 1.3pc, or 50.5p, to 3843.5p.
The investment giant formed by the merger of Standard Life and Aberdeen enjoyed a strong second day of trading as a combined business. Standard Life Aberdeen rose 0.9pc, or 3.7p, to 427.7p after being raised from ‘underweight’ to ‘overweight’ by analysts at Barclays, who praised estimated savings of around £200m as a result of the merger.
Pawnbroker H&T Group said strong gold prices and an 87pc jump in its personal loan book led year-on-year profits to grow by £3.3m to £28.5m over the first half of the year.
H&T has also been lifted by a drop in pawnbrokers on the High Street and its growing secondhand watch collection, which is now more than 500-strong. Shares rose 6.4pc, or 17p, to 285p.