In­di­v­ior, Cen­trica, Greggs and more big news from the past week

We ex­am­ine some of the key an­nounce­ments and the mar­ket re­ac­tion

Shares - - BIG NEWS -

Shares in In­di­v­ior (INDV) have more than halved in value since 20 Novem­ber and are now trad­ing at an all-time low of 96.52p thanks to a court in­junc­tion be­ing lifted on ri­val Dr Reddy’s Lab­o­ra­to­ries. The lat­ter is try­ing to launch a generic ver­sion of In­di­v­ior’s opi­oid treat­ment, Subox­one.

Jef­feries an­a­lyst James Vane-Tem­pest warns ‘seis­mic changes’ are needed to sal­vage In­di­v­ior’s in­tel­lec­tual prop­erty and he is wor­ried about a po­ten­tial breach of debt covenants. He says In­di­v­ior will need to sig­nif­i­cantly cut its Subox­one price, dou­ble cost sav­ings to $200m in 2019 and de­lay early-stage R&D ac­tiv­i­ties.

Bri­tish Gas owner Cen­trica’s (CNA) third quar­ter up­date re­vealed it was still los­ing cus­tomers, just not at the rate it was a year ear­lier. This ‘achieve­ment’ did not im­press the mar­ket.

BET­TER NEWS IN THE FOOD SEC­TOR

A trad­ing up­date from food-on-the-go out­let

Greggs (GRG) showed strong sales mo­men­tum un­der­pin­ning profit up­grades. Like-for-like sales were up 4.5% in the eight weeks to 24 Novem­ber. Cake sell­ing fran­chise Cake Box (CBOX:AIM) re­ported 44% rev­enue growth to £8.28m in the six months to 30 Septem­ber de­spite the pe­riod en­com­pass­ing the kind of warm weather which you might ex­pect to de­press de­mand for its egg­less and fresh cream per­son­alised cel­e­bra­tion cakes.

There was more bad news from the trou­bled out­sourc­ing sec­tor as Bab­cock (BAB) and In­ter­serve (IRV) served up poorly re­ceived up­dates. Both com­pa­nies re­vealed big ad­just­ments and one-off items.

BLACK FRI­DAY FEARS

Early re­ports sug­gest this year’s Black Fri­day re­tail event (23 Nov) may have proved more dif­fi­cult for UK re­tail­ers than ex­pected, with in-store foot­fall down and the growth in on­line sales fail­ing to make up the bal­ance.

Bar­clay­card says shop­pers were buy­ing more items but spend­ing less on the big day, with the em­pha­sis on smaller treats rather than big ticket items. Shop­per mon­i­tor Spring­board re­ported a 6% drop in shop­ping cen­tre, town cen­tre and re­tail park foot­fall.

Hard-pressed re­tail­ers kick-started their dis­count­ing ear­lier this year, en­abling bar­gain­hunt­ing con­sumers to spread their spend­ing over a longer pe­riod. How­ever, UK shop­pers are fore­cast to spend over £2,000 each on­line alone in Novem­ber and De­cem­ber, ac­cord­ing to Adobe re­search, while de­part­ment store John Lewis has re­ported record sales in Black Fri­day week.

By Lisa-Marie Janes with Tom Sieber and James Crux

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