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What to Watch: Carpetright takeover, TalkTalk results overshadowed, and Fuller profit warning

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
A Carpetright store in Leeds. Photo: Danny Lawson/PA/Getty Images

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

Carpetright takeover confirmed

Carpetright (CPR.L) has confirmed plans to be taken over by its largest shareholder in a rescue deal.

Meditor will takeover Carpetright in a deal worth £15.1m that will help the struggling retailer pay down its debts. The company’s directors unanimously recommended shareholders approve the deal.

“We believe the MHL [Meditor] offer is in the best interests of all stakeholders,” Carpetright chairman Bob Ivell.

“While we have made significant progress with our recovery plan for the Carpetright Group, our ability to invest in the future of the business has been constrained against the backdrop of limiting banking covenants and a very challenging consumer market.

“With a recapitalised business and the backing of a committed new owner with the resources to invest in Carpetright for the long term, we will be able to complete our recovery in the private arena and emerge as a stronger business."

Talal Shakerchi, Meditor director, said: “This will facilitate substantially increased investment in Carpetright's committed employees and its store estate as well as driving new initiatives and improvements.”

Carpetright shares rose 14.5%to 4.8p, just below the 5p per share offer price from Meditor.

TalkTalk results overshadowed

TalkTalk’s (TALK.L) first-half results have been overshadowed by newly announced Labour party plans to nationalise broadband.

Labour announced on Thursday night that it plans to nationalise BT’s Openreach business and offer free broadband to everyone in the UK. The plans have sent shares in stocks across the sector diving, for fear that other businesses might also be in Labour’s sights.

TalkTalk announced it is pausing the sale of its fibre broadband business FibreNation in light of Labour’s announcement. Shares were down 2.5%.

The news came as TalkTalk announced a 52% jump in fibre broadband customers over the last six months.

The telecoms business added nearly 300,000 customers in the first half of the financial year but fell to a loss of £4m. Revenue fell 3.6% over the period to £792m.

Haynes for sale

Haynes Publishing (HYNS.L), best known for producing car repair manuals in the days before the internet, has put itself up for sale.

Bosses said a successful transition to online content “data and innovative workflow solutions” had turned around its fortunes over the past five years and would be better served by “becoming part of an organisation with the financial resources to invest for future expansion”.

Shares rose 5% in early trade on hopes of a deal.

Profit warning at Fuller

Shares in pub group Fuller, Smith and Turner (FSTA.L) fell 5% after the group warned profits would be flat this year when compared to last.

Fuller sold its brewing business to Asashi earlier this year and the company warned that the cost of separating out the business has been higher than expected.

“This is a transitional year for the Company following the sale of the brewing business and subsequent separation of a highly integrated business,” chief executive Simon Emeny said.

“There have been many moving parts to navigate and we have incurred some greater than anticipated costs as a result which have had a short term impact on our financial performance.”

Despite the cost issues, the core business performed well, with comparable sales rising 2.3% in the 52 weeks to 9 November.

Markets rebound

European markets rebounded on Friday, with stocks continuing to take their cues from US-China trade war developments.

“Investors continue to hang onto every word associated with the US/China trade war,” said Russ Mould, investment director at AJ Bell.

“White House economic adviser Larry Kudlow reportedly said that current negotiations between the two countries are ‘very constructive’, which was enough to drive stock markets up across the UK, mainland Europe and most of Asia.”

The FTSE 100 (^FTSE) was up 0.2%, Germany’s DAX (^GDAXI) was up 0.3%, France’s CAC 40 (^FCHI) was up 0.6%, and the Euronext 100 (^N100) was up 0.5%.

Overnight in Asia, Japan’s Nikkei (^N225) closed up by 0.7%, the Hong Kong Hang Seng Index (^HSI) was flat, and China’s Shanghai Composite (000001.SS) closed down by 0.6%.

What to expect in the US

US stocks futures are pointing to a higher open amid trade optimism. S&P500 futures (ES=F) were up by 0.2%, Dow Jones futures (YM=F) were up 0.3%, and Nasdaq futures (NQ=F) were up 0.3%.

40 companies are reporting in the US later today, including:

  • JC Penney (JCP)

  • JD.com (JD)