Companies roundup: Hunting, Mulberry & IHG

Oil and gas equipment specialist Hunting (HTG) has cut its cash profit expectations for the full after hiking guidance earlier in the year. A weaker US onshore market has brought on the about‑face, the company said, which has seen adjusted EBITDA guidance drop from $134mn‑$138mn to $123mn‑$126mn, below the initial 2024 forecast from the company. It sent the shares down 15 per cent, reversing most of the year’s gains.

The 2025 guidance of $160mn‑$175mn is also in doubt, while the company said its year‑end net debt would also “increase significantly” because of receivables linked to the Kuwait Oil Company order that sent sales soaring. Hunting chief executive Jim Johnson said: “Whilst the outlook for the international and offshore subsectors of the industry continues to remain firm, the slower than anticipated improvement within the US onshore has led to a deterioration in our short‑term trading expectations.”

Investec analyst Joel Spungin pointed to weaker gas prices and the upcoming election as further knocking the US onshore sector and therefore Hunting’s Titan division, which was already trading poorly as companies limited new spending. “This division is unlikely to see much pickup before 2025, despite the cost actions taken earlier in the year,” he added.

Contractor lifts guidance on booming fit‑out business

Morgan Sindall (MGNS) said profit for 2024 will be “significantly ahead” of expectations, based on the strength of performance from its fit‑out arm.

It is the second time this year that the contractor has raised guidance. The fit‑out arm has benefited from “exceptional volumes”, with its order book increasing by 15 per cent since the start of the year, to £1.3bn. Most other divisions are on track to either meet or slightly exceed revenue targets and even the underperforming Property Services arm’s overhaul is set to complete by the end of this year, with a return to profit expected in 2025. The company’s shares jumped by 14 per cent.

Broker Panmure Liberum raised its earnings per share target by 7 per cent for this year and next.

It said the fit‑out arm is likely to benefit from the recent demise of competitor ISG, whose £4.1bn pipeline “will no doubt be carved up among the remainder of the industry”.

Mulberry rejects Frasers again

Faced with the reality that a 56 per cent shareholder would be highly unlikely to sell to a 37 per cent shareholder, the board of handbag maker Mulberry (MUL) has rejected the second possible offer from Frasers (FRAS). Mike Ashley’s conglomerate offered 150p a share on 11 October, up from its original bid of 130p, in the wake of Mulberry raising cash at 100p a share to fund the new boss’s plans.

The Mulberry directors said there was no chance of a deal given the stalemate between Challice, the majority shareholder, and Frasers. “After careful consideration with its advisers and in light of the above, the board is unanimous in the view that the possible offer is untenable and that the company should focus its attention on driving the commercial performance of the business,” the Mulberry board said.

Frasers said on 11 October the £10mn raise would likely not be enough to keep the company going and that a new strategy was needed. The deadline for a deal under Takeover Code rules is 28 October, otherwise, Frasers will have to walk away for six months.

InterContinental Hotels Group’s revpar growth slows

InterContinental Hotels Group’s (IHG) third‑quarter growth was driven by trading in Europe and stronger business demand, as leisure rooms revenue came in flat and performance slumped in China.

Revenue per available room (revpar) rose 1.5 per cent in the quarter against the same period last year at the Holiday Inn and Crowne Plaza owner, an unsurprising slowdown against the 3 per cent posted in the first half given tough comparatives.

Revpar was up 4.9 per cent in Europe, the Middle East, Africa and Asia (EMEAA), and 1.7 per cent in the Americas. However, the metric tumbled 10.3 per cent in China, though the quarter was “still broadly in line” with 2019.

The group opened 17,500 rooms in the quarter, compared to 7,700 in the comparative period. Management guided for a full‑year performance in line with market expectations.

Halfords’ sales flat as Budget fears add to consumer uncertainty

Bike and auto parts retailer Halfords (HFD) warned that “the short‑term outlook remains uncertain”, as consumers have cut down on discretionary spending in the lead‑up to next week’s Budget.

Like‑for‑like sales came in flat for the first half to 27 September, as retail sales fell 0.7 per cent and autocentres revenue nudged up 0.8 per cent. The company is on track to post £30mn of cost savings this year, to mitigate around £35mn of increases linked to inflation, and it pointed to improvements in gross margin.

The shares were up 2 per cent in early trading. They are down by a quarter over the last year.

Brickability reaps benefits from variety

While trading for the six months to September remained sluggish for Brickability (BRCK), the company said that it had enjoyed some protection from “an increasingly diversified product and service offering”.

First half revenue was up 2 per cent to over £330mn, but down 7 per cent on a like‑for‑like basis. Brick and building materials sales (and brick imports) have continued to trend lower but its distribution arm has returned to growth and its contracting arm is benefitting from higher demand for fire remediation and specialist cladding work.

First‑half adjusted cash profit will be slightly ahead of last year at £27.5mn and full‑year expectations remain unchanged. The shares rose by 6 per cent.

Pinewood shares soar on Marshalls contract news

Pinewood Technologies (PINE) shares jumped 16 per cent in early trading after the software‑as‑a‑service (SaaS) automotive retail technology company announced a five‑year contract with one of the UK’s leading franchised dealers to implement its systems at their sites.

Marshalls, which is part of the Constellation Automotive Group, has around 120 dealerships. It is the first non‑associated major dealer to take on the Pinewood product range since Lithia Motors (US:LAD) bought Pendragon’s motor and leasing divisions and Pinewood became an independent entity.

Next up for Pinewood is its capital markets day on Thursday.