FTSE 250 movers: WoS tanks on revenue warning; Ferrexpo up on divi

FTSE 250: 18,983.94, +0.63%

Shares in Watches of Switzerland tanked by more than a third on Thursday as the luxury timepiece seller slashed its annual revenue guidance on the back of slumping demand for its luxury products and forecast of volatile trading conditions for the rest of the fiscal year.

Full-year 2024 revenue was now expected to be between £1.53bn - £1.55bn, compared with an earlier forecast of £1.65bn - £1.70bn, the company said. Shares were down more than 30% in London trade.

“Despite a positive start to the early part of the third quarter, WOSG then experienced a volatile trading performance in the run-up to and beyond Christmas, as the challenging macro-economic conditions impacted consumer spending in the luxury retail sector,” the company said in a trading update on Thursday.

“We now expect these challenging conditions to remain for the balance of our fiscal year.”

“Sales in the US remained strong with continued double-digit growth. The UK was more challenged, and this impacted a broad range of luxury watch brands and non-branded jewellery. There was an unusually high level of promotional activity in non-branded jewellery.”

Chief executive Brian Duffy said the Christmas period was particularly volatile this year for the luxury sector, with consumers allocating spend to other categories such as fashion, beauty, hospitality and travel.

Finance costs were also revised upwards to £6m from £5m.

Hargreaves Lansdown head of equity funds Steve Clayton said: "The luxury watch market has enjoyed extraordinary growth in recent years, with watch prices pushing ever higher, despite supply being limited purely by the manufacturers’ own decisions. Is the sound of a bubble bursting? Time will tell."

Ferrexpo rallied on Thursday as it declared an interim dividend of 3.3 US cents a share after exceeding its expectations in 2023.

The iron ore pellet producer said it performed well in the second half of the year, with production optimisation and an improved pricing environment allowing the board to consider an interim dividend.

Executive chair Lucio Genovese said: "We exceeded our expectations in 2023 thanks to improved demand, production optimisation and higher iron ore prices. After paying taxes, maintenance and expansion capital, our year-end financial position is stronger than at the start of the year.

"The new year has also started well for the iron ore industry with signs of an increase in pellet demand, providing the confidence to restart a second pellet line to meet export demand."

Swiss-based Ferrexpo has three iron ore mines and an iron ore pellet production facility in central Ukraine.

Electricals retailer Currys said on Thursday that full-year profit was set to be ahead of consensus expectations despite reporting a drop in sales.

In an update for the 10 weeks to 6 January, the retailer said group sales declined by 4%, with sales in the UK and Ireland down 3%, while the international segment saw a 6% fall. The Nordics and Greece saw sales fall 6% and 4%, respectively.

Peak like-for-like revenue in the UK and Ireland declined 3%. Currys said "robust" profits were delivered through stable gross margin and continued cost savings. Sales were strong in mobile, but this was offset by weaker trends in TV and computing.

The company now expects adjusted pre-tax profit for the year of between £105m and £115m, above consensus expectations of £104m.

Chief executive Alex Baldock said: "We've had a successful peak trading period, for customers who are more satisfied than ever, and for profits and cashflow. Our markets may be no easier, but we now expect full-year profits to be above consensus expectations.

"In the UK&I, we've kept up our encouraging momentum, in particular selling more of the services that boost margins and build customers for life. We're also getting the Nordics back on track, after a disciplined peak on margins and costs. In all markets, we've taken big strides in customer satisfaction, through the hard work and expertise of our more engaged colleagues."

Travis Perkins shares rose strongly on Thursday after the builders' merchant and home improvement retailer reported a stabilisation of pricing in the fourth quarter and announced plans to ramp-up its cost-savings programme.

While volumes remained "challenging", trading was in line with management expectations and full-year adjusted operating profits are expected to be £180m for 2023, towards the low end of the £175m to £195m guidance range given in October.

Looking ahead, Travis Perkins said that with market conditions predicted to remain "subdued" in 2024, "management has accelerated plans to continue the transformation of the business".

The company said it has already made cuts to central and regional headcount alongside efficiencies in the supply chain, which will deliver annualised savings of around £35m and result in a one-off restructuring charge of around £15m in 2023.

"These initiatives represent the first steps in a programme of planned changes to the group’s operating model, which will focus on simplifying how its businesses interact with each other, reviewing the impact of loss-making activities and maximising the benefit of the group’s collective scale."

Investment platform operator AJ Bell said on Thursday that assets under administration had hit record levels in the three months ended 31 December, driven by increased customer numbers and a "significant" year-on-year increase in gross and net inflows.

AJ Bell said total advised customers in its platform business were up 8% year-on-year at 161,000, while total direct-to-consumer customers shot up 13% in the first quarter to 323,000.

The FTSE 250-listed its platform unit also delivered record assets under administration of £76.2bn, up 15% in the last year, while gross inflows rose from £1.9bn to £2.7bn and net inflows improved to £1.3bn from £800,000.

AJ Bell Investments saw assets under management surge 53% year-on-year to £5.2bn, while net inflows were flat year-on-year at £400,000.

Chief executive Michael Summersgill said: "Some of the macroeconomic headwinds experienced throughout 2023 showed signs of improving in the quarter, driving global equity markets higher and easing some of the pressure on household finances.

"As we look ahead, our platform will continue to appeal to both current and potential customers and advisers. We continue to invest in enhancing our propositions, with a strong focus on ease of use, whilst also investing in our pricing to ensure we continue to deliver great value to customers."

Market Movers

FTSE 250 - Risers

Ferrexpo (FXPO) 85.40p 17.96%
Syncona Limited NPV (SYNC) 121.40p 7.62%
Currys (CURY) 48.82p 7.39%
Travis Perkins (TPK) 784.60p 6.06%
Elementis (ELM) 124.60p 5.95%
AJ Bell (AJB) 314.60p 5.85%
Trainline (TRN) 322.20p 4.95%
Hargreaves Lansdown (HL.) 752.00p 4.01%
SDCL Energy Efficiency Income Trust (SEIT) 57.80p 3.96%
TUI AG Reg Shs (DI) (TUI) 544.00p 3.82%

FTSE 250 - Fallers

Watches of Switzerland Group (WOSG) 385.40p -34.34%
Harbour Energy (HBR) 286.70p -9.50%
Drax Group (DRX) 466.20p -6.31%
Dr. Martens (DOCS) 74.95p -3.29%
Future (FUTR) 742.00p -2.75%
NB Private Equity Partners Ltd. (NBPE) 1,590.00p -2.45%
Big Yellow Group (BYG) 1,085.00p -1.99%
Mobico Group (MCG) 82.90p -1.78%
OSB Group (OSB) 404.80p -1.56%
Tritax Eurobox (GBP) (EBOX) 52.50p -1.50%