BUSINESS LIVE: Bloomsbury lifted by fantasy boom; Games Workshop hands cash to employees; Frasers profits up

The FTSE 100 is down 0.3 per cent in early trading. Among the companies with reports and trading updates today are Bloomsbury, Games Workshop, Frasers, Balfour Beatty, Smart Metering Systems and Vertu Motors. Read the Thursday 7 December Business Live blog below.

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As gold prices reach an all-time high, here’s how you can invest in it

The price of the precious metal surged to $2,111.39 (£1,677.63) an ounce this week before falling back.

Games Workshop to hand £2,500 bonus to staff ahead of Christmas

Games Workshop employees will each receive a £2,500 cash bonus in time for Christmas, as part of the group’s profit share scheme.

The company said trading since September had been ‘in line with expectations’, with group on track to post solid half-year profit growth.

MAGGIE PAGANO: Stop overseas buyers snapping up UK firms on the cheap

British companies are crashing out of the London Stock Exchange like ten pins being knocked down in a bowling alley. Quite literally.

Ten Entertainment is the latest listed mid-cap to be bowled over with a knockout strike from US private equity firm Trive Capital Partners.

Frasers shares have rallied nearly 28% this year ‘but it is still looking fairly cheap’

Mark Crouch, analyst at eToro:

‘This is a strong update from Frasers, which remains on course to meet full-year guidance despite challenging conditions.

‘UK retail revenue was flat in the first six months of the year, although the strong performance of Frasers’ international arm has led to a respectable uptick in group revenue.

‘Profit growth is strong, the balance sheet remains very robust, and the firm is generating cash, all the things that shareholders want to see from any business, but especially one in a sector as volatile as retail.

‘The retailer’s shares have rallied nearly 28% this year but it is still looking fairly cheap on a price-to-earnings basis compared with the rest of the FTSE 100.

‘Given its recent performance, that suggests there is some mileage left in its share price yet.’

Bloomsbury Publishing shares rise as Rowling sales help group lift forecasts

Bloomsbury Publishing shares surged on Thursday after the group upped its annual forecasts on the back of ‘phenomenal demand’ for fantasy fiction.

The Harry Potter publisher forecast annual profit and revenue ahead of market expectations, encouraged by readers picking up more fantasy fiction novels by authors like Sarah J. Maas and J.K. Rowling.

Demand for several books including Harry Potter Wizarding Almanac, the official companion to J.K. Rowling’s books, and children’s’ Christmas book We’re Going on a Sleigh Ride has been on the rise in recent months, the London-listed publisher said.

SFO arrests company boss as it launches probe into jet engine scam

The boss of a firm at the centre of a fake plane parts scandal has been arrested as part of a major criminal fraud probe.

Police arrested Jose Alejandro Zamora Yrala, director of aircraft parts supplier AOG Technics, at his London home yesterday morning.

Market open: FTSE 100 down 0.4%; FTSE 250 off 0.7%5

London-listed stocks are trading lower this morning, as a strengthening pound weighs on the exporter-heavy FTSE 100, while elevated government bond yields also dampen risk appetite.

The personal goods sector leads declines early on, falling 2.2 per cent.

The pound is up 0.2 per cent against the dollar, while British government bond yields also edged higher, in line with their global counterparts.

Among individual stocks, DS Smith is down 1.4 per cent after the cardboard maker said its CEO Miles Roberts will retire and recorded a 15 per cent slump in its half-year profit before tax.

Future is down 15.8 per cent after reporting full-year results.

Smart Metering Systems has jumped 41.9 per cent after the energy infrastructure firm said a company owned by funds advised by KKR and its affiliates will acquire it in an all-cash deal of about £1.3billion.

CMA blasts Morrisons and M&S for stopping rivals from opening nearby shops

Morrisons and M&S have promised to stop using unlawful agreements that prevent rivals from opening nearby shops.

The Competition and Markets Authority (CMA) slammed both firms after discovering a total of 65 agreements which limited competition.

Landowners agreed with the retailers they would restrict their land being used by a rival supermarket – breaching legislation introduced in 2010.

DS Smith boss to retire

DS Smith CEO Miles Roberts will retire after 13 years with the British cardboard maker, and will step down no later than 30 November next year.

The company, which provides packaging, paper and recycling services, recorded a 15 per cent slump in its half-year profit before tax as volumes staggered with consumers spending more on services over goods.

SMS agrees £1.3bn private equity takeover

British energy infrastructure firm Smart Metering Systems has agreed to a £1.3billion takeover led by private equity group KKR.

The 955p-per-share offer represents a premium of 40.4 per cent to the London-listed stock’s Wednesday close.

SMS said its directors intend to unanimously recommend that the shareholders vote in favour of the deal.

‘KKR believes that SMS, under private ownership, will be able to accelerate its growth and continued transition from a metering provider and grid-scale battery storage operator to a fully integrated, end-to-end energy infrastructure company,’ the US-based investment firm said in a joint statement.

Glasgow-headquartered SMS is listed in London’s junior market and employs about 1,500 people, primarily in the UK.

SMS shares are up by around 41.3 per cent at the open.

Frasers awaits ‘Christmas trading frenzy’

Aarin Chiekrie, equity analyst at Hargreaves Lansdown:

‘The Sports Direct owner, Frasers, started its financial year off on the front foot. Revenue growth was largely due to some of the businesses acquired last year – a key part of the business’s growth plan.

‘Sports Direct remains the main event at the Frasers, accounting for more than half the group’s revenue. There’s significant momentum here, with the long-term goal to expand its presence across Europe and become the number one sports retailer in the region.

‘In the meantime, the group’s elevation strategy is well underway. It calls for new flagship stores to display products in a more flattering and digitally integrated environment, which has led to a material improvement in relationships with key global brands.

‘The likes of Nike and Adidas have even gone as far as to name the group’s Sports Direct business as a key partner, which tells you all you need to know about its position in the global sporting goods market. That’s aided Sports Directs’ ability to secure some of the latest products from these brands, which can be used to lure more customers into stores.

‘Progress on this front has been impressive so far, but many more stores still need upgrading before the new format is going to contribute more meaningfully. Given the first-half performance, full-year profit targets look well within reach, especially with the Christmas trading frenzy just around the corner.’

Microsoft’s Call of Duty takeover on pause as US regulators probe £60bn deal

The saga of Microsoft’s multi-billion-pound takeover of Call Of Duty maker Activision Blizzard has taken another twist.

US anti-trust watchdogs argued in a California court yesterday that a previous ruling by a federal judge in July that the £60billion merger was legal under competition law was incorrect.

The Federal Trade Commission (FTC) filed a lawsuit in December 2022 claiming the takeover would allow Microsoft to suppress competition by taking ownership of Activision’s library of popular games.

Games Workshop hands £2,500 cash to employees

Games Workshop will hand each employee £2,500 in cash ahead of Christmas, after the Warhammer maker saw solid profit growth in the first half.

The group told investors it expects to report core recenues of £235million and pre-tax profits of around £94million for the six months to 26 November, up from £212.3million and £83.6million last year, respectively.

Games Workshop’s profit share scheme will see each employee handed £2,500 this December in a payout toally £7.5million, up from £4.5million last year.

Frasers profits up

Frasers has said it is on track to meet full-year profit guidance after first-half earnings rose 12.6 per cent, reflecting the success of a plan to take the group upmarket.

The FTSE 100-listed group controlled by Mike Ashley is set to achieve adjusted pretax profit of £500million to £550million in the year to April 2024, up from £478 million a year before.

It made £303.8million in its first half on revenue that rose 4.4 per cent to £2.77billion.

Michael Murray, CEO of Frasers Group, said:

‘We have delivered a strong performance in the first half of the year, with great momentum as we head into the Christmas trading period. The elevation strategy continues to drive strong trading performance across the business with good growth in Sports Direct supported by our brand partners.

‘Our long-term ambitions for our Premium Lifestyle business remain unchanged although it is likely that progress will remain subdued for the short to medium term in the face of a softer luxury market however, we continue to invest with confidence in our unique proposition.

‘During the period, we have opened new elevated stores, and further strengthened brand partnerships to allow us to deliver the best consumer experience. I am also excited about the potential of our strategic investments which we expect to unlock further opportunities for the Group. We have a clear ambition to be the leading sports retailer in EMEA and we are making progress on broadening our footprint through a focused international M&A strategy.’

Gilt yields fall as investors ramp up bets on interest rate cuts next year

Borrowing costs fell as investors ramped up bets on interest rate cuts next year despite efforts by the Bank of England to quash such talk.

The yield on ten-year gilts – a benchmark measure of how much the Government pays to borrow – dropped below 4 per cent for the first time since May.

The slide came as financial markets indicated a just over 50 per cent chance that the first rate cut will come in May.

Bloomsbury lifted by fantasy boom

Bloomsbury Publishing has lifted profit and revenue expectations for the year as the Harry Potter publisher continues to be buoyed by ‘phenomenal demand’ for fantasy fiction.

The group told investors full-year profits would be ‘comfortably ahead’ of forecasts of £274.2million and pre-tax profits would be ‘materially ahead’ of eexpectations of £32.9million.

Nigel Newton, chief executive, said:

‘I am delighted to report a strong period of trading which is principally driven by the continued phenomenal demand for fantasy fiction.

‘Bloomsbury has consistently built its success on the immense talent of our authors and the exceptional hard work of our teams who support them.’