Ocado, M&S, Fuller’s and other recent news
Sometimes press speculation can move share prices in the absence of an official announcement from a company or companies. That proved to be the case on 28 January when shares in retailer Marks & Spencer (MKS) and online groceries play Ocado (OCDO) advanced on reports of a tie-up between the businesses.
Ocado has a long-running relationship with supermarket Waitrose which is set to end in September 2020. Although Marks & Spencer has been trying out online food deliveries in areas such as North London since 2017, it has yet to put serious resources behind the full-scale online grocery stores offered by rivals and still lacks a fully-fledged food delivery service.
Reports suggest Marks & Spencer might be interested in purchasing key distribution centres, delivery vans and lorries from Ocado. As we write neither party had confirmed or denied these rumours.
One deal which was confirmed in the past week was the surprise sale by Fuller, Smith & Turner (FSTA) of its beer business to Japan’s Asahi for £250m (25 Jan).
The divested portfolio includes the flagship beer London Pride which may feel like the end of an era for British brewing, but the company already derives 87% of its profit from its pubs and hotels business and received a good price for the beer assets of 23.6 times earnings before interest, tax, depreciation and amortisation.
Another name in focus for M&A is cross-border payments specialist Earthport (EPO:AIM) which has found itself in the enviable position of being in a tug of war between the world’s leading credit card firms MasterCard and Visa.
Visa tabled a bid of 30p per share in December and on 25 January MasterCard emerged with a 33p per share bid. Although the share price touched 80p around a decade ago, Earthport has not generated a single annual profit since listing on AIM in 2001, meaning investors were losing patience.
Specialist recruiter SThree (STHR) came up with a positive update on 28 January as results hit recently-raised guidance. The provider of staff to the science, technology and engineering sectors reported revenue up 13% in 2018 to £1.26bn as pre-tax profit advanced 20% to £53.4m.