Mothercare and Stobart
Archived article

Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.

“The feel-good factor created by England reaching its first World Cup semi-final in nearly 30 years is reflected in a positive open for UK stocks this morning. Although trade war fears have been dialled back for now, politics is likely to dominate this week amid ongoing ructions over Brexit and Donald Trump’s visit to the UK,” says AJ Bell Investment Director Russ Mould.

Mothercare

“Mother and baby products retailer Mothercare may have nearly completed its refinancing and restructuring process – but the hard work to get to this point referenced by interim executive chairman Clive Whiley has only just begun.

“The controversial company voluntary arrangements, which have enabled the company to get its rent bill under control, have stuck for all but its Children’s World subsidiary which now goes into formal administration and the company has raised a little over £30m at 19p to provide some breathing space.

“However, the company is nearly cutting its store estate in half and trading remains weak, particularly in the UK. How long-standing shareholders must wish their board had accepted a 300p bid from US peer Destination Maternity back in 2014.

“Claims that bid undervalued the business and its ‘attractive prospects’ look pretty laughable now.”

Stobart

“The long-running boardroom battle at Stobart takes another turn after chairman Iain Ferguson was (just) re-elected as chairman at Friday’s AGM.

“Former chief executive Andrew Tinkler was voted on to the board at the same meeting, but his fellow directors have unanimously voted to kick him off. Tinkler has been at the centre of efforts to unseat Ferguson, supported by high profile fund manager Neil Woodford.

“This is unlikely to be an end to the story and the saga provides an unwelcome distraction from the business of actually running the company.

“Stobart, the operator of Southend Airport, could do with its management’s undivided attention amid legitimate questions over the company’s strategy.

“A bid for budget airline Flybe fell apart in March and the company has faced difficulties in securing new airlines to use Southend to help it hit ambitious passenger targets.”

These articles are for information purposes only and are not a personal recommendation or advice.

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The daily market update is written by Russ Mould, AJ Bell’s Investment Director and his team. The article highlights the movement in the main index, winners and losers on the day and any macro-economic announcements.