Companies roundup: M&S, Greggs and B&M

Marks & Spencer (MKS) reported strong Christmas trading, with a 6.4 per cent uplift in like-for-like sales powered by its food arm. Food sales for the quarter ending in December rose by 8.9 per cent on the prior year, while clothing, home and beauty sales were up 1.9 per cent – both ahead of the wider marketplace.

The retailer’s shares dropped by 6 per cent in early trading, though. The company’s downbeat outlook statement, in which it described conditions as “challenging”, with both cost and economic headwinds to navigate, meant it was one of several retailers whose shares sold off as investors took flight.

Analysts at Peel Hunt said the share price weakness that accompanied M&S’s trading statement was “overdone”. MF

Read more: Where to find bargains (and growth) among struggling retailers

Greggs faced by lower high street footfall

The share price of Greggs (GRG) was marked down heavily in early trading after the food-on-the-go retailer revealed a marked slowdown in sales growth through the second half of 2024.

Like-for-like sales in company-managed shops increased 5.5 per cent through the year, but the rate of increase slowed dramatically in the second half as consumer confidence waned. 

The group’s outlets depend on passing trade to varying degrees, so any general reduction of punters on the high street presents a challenge. Management will have to contend with increased employment costs going forward, and the expected growth in disposable income in the UK will be constrained by stickier-than-anticipated inflation, which stands as an impediment to further rate cuts by the Bank of England. All this comes as the group expands production capacity after hitting a record store roll-out through the year. MR

Read more: How long can Greggs be a growth stock?

Boohoo’s board urges shareholders to back founder

The second round of Boohoo’s (BOO) battle with Mike Ashley’s Frasers Group has begun, with Boohoo’s board urging shareholders to vote against a proposal to have its co-founder Mahmud Kamani removed as a director.

Boohoo won the first round of this dispute last month, when shareholders voted against Ashley’s bid to insert himself and another Frasers nominee onto the company’s board.

Boohoo’s independent committee said Kamani was “an integral part” of its leadership team, saying he had built the business from the ground up.

It also highlighted his “entrepreneurial spirit, industry expertise and unwavering commitment” to the company, saying that Frasers’ proposal to remove him was part of a campaign aimed at destabilising Boohoo.

In previous correspondence with shareholders, Frasers had accused Kamani of presiding over an “abysmal” trading performance that had seen its share price collapse by more than 90 per cent since its lockdown highs, as well as corporate governance failures and “related party cronyism”.

A meeting to vote on Frasers’ proposal is scheduled for 21 January. MF

Mears raises profit expectations

One company provided some positivity in a sea of gloom this morning. Mears Group’s (MER) share price rose 7.5 per cent after it told the market that it expected results to be “marginally ahead” of current market expectations. 

The housing services company added that it was “increasingly confident” of delivering against market expectations for the 2025 financial year. Mears had a strong year for bidding, retaining 100 per cent of contracts that were subject to rebidding as well as securing a £12mn agreement with Moat Homes. The company said it had only one “material contract” subject to re-bid which could have an impact on the 2025 financial year. 

Mears’ asylum accommodation contract remains important. It said that it had utilised its balance sheet strength to fund property acquisitions, purchasing £21.6mn of properties in 2023, all of which have now been sold and leased back. This will generate £16.3mn in cash on completion. NV

Things are ticking along at Assura 

As the government grapples with how to fix the NHS, Assura (AGR) delivered a fairly average trading update this morning. 

The real estate investment trust (Reit) confirmed that it had made good progress with leasing, with around 59 lease reviews completed at 7.9 per cent above previous passing rents. 

Net debt has also decreased by £46mn, with disposal proceeds used to reduce its drawn revolving credit facility. Reported net debt is now £1,529mn, compared to £1,575mn in September 2024. 

However, there is still some way to go, said Andrew Saunders, research analyst at Shore Capital. “Higher debt and LTV remain a concern for us with Assura although this is beginning to come down and will fall further over the next two years from disposals…although selling good income producing assets is, perhaps, not an ideal scenario,” he said. NV

Read more: The Reits set to benefit from a booming healthcare market