The sportswear and clothing retailer issued a full year trading update this morning and despite the challenging economic backdrop, 8.4% sales growth was recorded and pre-tax profits are on track to print in line with the previously offered guidance. 215 new store openings have helped underpin the uptick in revenue and market share gains, but even on a like-for-like basis the company still saw revenues up 4.2% on the year. Admittedly Q4 was less encouraging and UK & Ireland trade proved to be the biggest drag, but with early FY25 guidance looking upbeat the market is supporting the stock, which sat as much as 8% higher in early trade.
Spirent hit the headlines earlier in the month after a US company, Viavi, tabled a sizable acquisition offer that saw directors recommending the proposal to shareholders. However this morning it’s been announced that Keysight Technologies has served up an enhanced offer at a 15% premium to the previous bid. The directors of Spirent have noted that this is a superior offer and the shares are up by more than 10% as a result. The question now is whether a wholesale bidding war breaks out, with Viavi making a counter-offer or indeed another party entering the fray. Coming on the back of the DS Smith news yesterday, the quarter is ending with a flurry of M&A activity.
The FTSE-250 white goods retailer AO World issued a full year trading statement this morning, noting that full year profits would be - at a minimum – at the top end of previously issued guidance, whilst revenues would be in excess of £1bn. Furthermore, management added that they were confident in delivering an additional 10-20% of revenue growth in the year ahead along with medium term profit guidance of 5% adjusted PBT margin. The broader economic news may be downbeat especially in light of today’s UK Q3 GDP print but this offers some hope that the retail sector is rebounding.
