Positive News Boosted “Greggs”, “Cobham” And “First Group” Stock Performance

  • Feb 22, 2019 GMT
  • Team Kalkine
Positive News Boosted “Greggs”, “Cobham” And “First Group” Stock Performance

Can Vegan-Push Help Greggs to a New High

On 19th February, GREGGS PLC (Ticker Symbol: GRG) surged by 12.33 per cent on the back of strong sales of the company’s new Quorn-filled sausage roll. Greggs is Britain’s biggest bakery retailer, focusing on the food-on-the-go market, and has over 1,950 retail outlets throughout the country. On Tuesday strong demand for the new product prompted the company to raise its 2019 profit expectations, sending its share to a record high of £1,817.00.

Last month the company introduced the new delectable snack to take advantage of the “Veganuary” movement that has motivated Britons to reduce – or stop entirely – the consumption of meat products for health and environmental reasons. The new snack sells for just £1 and is made with meat substitute Quorn. The launch was backed by a YouTube video which helped create publicity for the much-awaited product.

The strong performance of the snack helped the company to increase sales by 14.1 per cent in the first seven weeks of 2019, the company reported, compared to the same period last year of 6.2 per cent. The company-managed shop like-for-like sales also increased by 9.6 per cent, compared with 2.9 per cent the previous year. The company’s management now expects that full year’s underlying profit before tax for 2019 will probably be more than prior guidance.

According to the Waitrose Food & Drink Report for 2018 and 2019, every eighth Briton, i.e., almost 13 per cent of the population, is either vegetarian or vegan. A further 21 per cent are cutting down on their meat consumption. According to a research by Ubamarket, vegan and vegetarian products worth over £1.3 billion were bought in the United Kingdom. The British company, which is famous for its pivot to providing healthier options, is expected to tap into this growing market, having launched a vegan Mexican Bean Wrap in June last year.

Conclusion

January is mainly a best time for people to try vegetarianism or veganism, so now it will have to be seen if the company can continue its strong sales in the coming months and deliver more vegan-friendly products in the future.

Resolution of Dispute Gives Cobham a Much-Needed Respite

COBHAM PLC (Ticker Symbol: COB), a British manufacturing company, recently saw its share price increase by 7.59 per cent, helped by an agreement with Boeing regarding the troublesome KC-46 refuelling tanker programme. The UK’s defence equipment supplier on Tuesday said it had settled “all disputed matters” with Boeing and had reached an agreement with Boeing on its claim for damages.

According to the agreement, the company will take an additional exceptional charge of £160 million, comprising of £86 million for the resolution of the dispute and £74 million for additional costs of the revised schedule based on an agreement between the two companies. The charge is in addition to the £40m non-underlying charge already announced by the UK group in July last year, leading to a 10 per cent fall in its stock value on the day.

The KC-46 tanker, an air-to-air refuelling tanker aircraft, was originally due to be in service by 2017, but various problems have beset it for a decade. The claim for quantified damages, over the delays, from Boeing, the world’s largest planemaker, emerged last July after which it had withheld payments over delays. The claim had let to a sharp drop in Cobham’s share price. The US group had itself incurred more than $3bn in pre-tax charges for cost overruns on a fixed-price programme that has already run billions over budget. The schedule for the qualification and production of Cobham’s fuel delivery system has also been reset and is now anticipated to complete around the middle of 2020, the company said.

Conclusion

The group had been in revival mode since a serious of profit warnings compelled the company into a rights issue in 2017, before the dispute with Boeing halted the recovery. The resolution will assist the company to focus on significant operational work and maximise shareholder value.

Key Takeaways from FirstGroup’s Trading Statement

FirstGroup PLC is a multi-national transport group, with a leading position in the United Kingdom, the United States and Canada. The company is a constituent of the FTSE 250 Index. Recently it announced its trading statement for the period September 2018 to January 2019. The Aberdeen-based public transport operator reported group revenue grew by 13.7% year to date, despite a fall of 1.9% in like-for-like passenger volumes.

The company said that a “subdued” Christmas on the high street hit passenger numbers on its UK buses while like-for-like passenger volumes had fallen due to network restructuring. Recently, the group has sold few of its assets – one bus depot in Manchester and 163 buses – to its rival, Go-Ahead, for £11.13 million. Further speculations are cooking up that the company is seeking to sell its bus operations in the Manchester area.

Like-for-like passenger sales pace decreased in its rail division, mainly because of critical infrastructure challenges, resulting in unsatisfactory operating performance for passengers by the end of 2018.

The company said that the business across the segments was as expected, with good growth in the company’s UK bus business and school bus division in the US. However, its Greyhound bus operations in North America still faces a harsh operating market in a few places, although initial indications of improvement from commercial and operational changes could be seen.

With Bank of England reducing the interest rates to a historic low level, the spotlight is back on diverse investment opportunities. 

Amidst this, are you getting worried about these falling interest rates and wondering where to put your money?

Well! Team Kalkine has a solution for you. You still can earn a relatively stable income by putting money in the dividend-paying stocks.

We think it is the perfect time when you should start accumulating selective dividend stocks to beat the low-interest rates, while we provide a tailored offering in view of valuable stock opportunities and any dividend cut backs to be considered amid scenarios including a prolonged market meltdown.

To know more about these dividend stocks, click here

CLICK HERE FOR YOUR FREE REPORT!
   
x
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK