World Cup woes adding to gloom at dis­trib­u­tor

Daily Mail - - City & Finance - by Paul Thomas

A Dev­as­tat­ing profit warn­ing wiped nearly £58m off the value of WH smith’s for­mer news­pa­per dis­tri­bu­tion arm and led to the de­par­ture of two di­rec­tors. in a gloomy trad­ing up­date, Con­nect Group slashed profit ex­pec­ta­tions fol­low­ing a pe­riod of ‘ex­tremely dis­ap­point­ing’ trad­ing.

the dis­tri­bu­tion firm, cre­ated via a de­merger from WH smith in 2006, was ex­pected to make £42m45m profit this year but an­a­lysts now be­lieve that fig­ure could be £10m lower.

slow sales of World Cup-re­lated prod­ucts, such as sticker books, at its news­pa­per and magazine whole­saler, smiths news, contributed to the group’s poor per­for­mance. it was com­pounded by fall­ing vol­umes and in­creased costs at its tuffnells par­cel de­liv­ery ser­vice. the swin­don-based com­pany will also close its par­cel col­lec­tion ser­vice, Pass My Par­cel, due to in­creased costs and un­der­per­for­mance.

in­vestors were warned that, at the very least, the full-year div­i­dend would be sub­stan­tially re­duced. Chief ex­ec­u­tive Mark Cash­more and fi­nance boss david Bauern­feind stepped down fol­low­ing the up­date. the shares closed down 44.8pc, or 23.3p, at 28.7p.

the FTSE 100 was as good as flat, edg­ing 0.1 point lower to 7703.71, while the FTSE 250 ended the day 0.04pc lower, or 8.77 points, at 21232.87.

Just Eat shares took a ham­mer­ing af­ter ri­val de­liv­eroo an­nounced plans to take a big­ger piece of the take­away pie by al­low­ing restau­rants that sign up to its app to use their own de­liv­ery driv­ers.

Pre­vi­ously it tar­geted in­de­pen­dent restau­rants and chains that did not have their own de­liv­ery staff. But now it will go af­ter chip shops, ke­bab houses, curry restau­rants and Chi­nese takeaways that have so far used Just eat to con­nect with cus­tomers. the an­nounce­ment took a 4.7pc bite out of Just eat’s shares, which ended the day down 40p at 810p.

global miner Glen­core set­tled a dis­pute with demo­cratic Repub­lic of Congo state miner gecamines, sav­ing a key cop­per and cobalt joint ven­ture.

glen­core will ef­fec­tively write off £4.2bn debt, but se­cur­ing the as­set is cru­cial as the dRC is by far the big­gest sup­plier of cobalt, which is key for elec­tric cars and mo­bile phones.

An­a­lysts at Credit suisse said: ‘We see this deal as an over­all pos­i­tive for the com­pany, al­beit it is cer­tainly not a win/win sce­nario for glen­core, with some con­ces­sions hav­ing to be made to put this is­sue to bed.’ glen­core shares ticked up 3.8pc, or 14.4p, to 398p.

On the Ftse 250, an­a­lysts at RBC Cap­i­tal Mar­kets jacked up car mar­ket­place Auto Trader’s tar­get price by 70p to 410p. the bro­ker said: ‘Auto trader has a dom­i­nant po­si­tion and at­trac­tive free cash flow gen­er­a­tion.’

How­ever, its tar­get price is still short of Auto trader’s shares, which ended the day flat at 422.5p. shares in sweet­ener maker Tate

& Lyle turned sour af­ter Jef­feries down­graded the firm from ‘buy’ to ‘hold’. the bro­ker raised con­cerns it would be af­fected by a rene­go­ti­a­tion of the north Amer­i­can Free trade Agree­ment be­tween the Us, Canada and Mex­ico. t&L makes high-fruc­tose corn syrup sweet­en­ers in the Us that are ex­ported to Mex­ico for use in soft drinks. its shares slid 4pc, or 27p, to 643p.

On Aim, shares in Bri­tish video game maker Team17 bolted up­wards – ris­ing 8.6pc, or 20p, to 252.5p – af­ter it re­vealed Over­cooked 2, a se­quel to its pop­u­lar game, will launch on Au­gust 7.

Fel­low Bri­tish tech firm Bango an­nounced a deal al­low­ing cus­tomers of en­tel, Chile’s largest telecom­mu­ni­ca­tions com­pany, to buy apps and mu­sic on google Play and charge them to their phone bills. its shares bumped up 0.3pc, or 0.5p, to 151.5p.

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