Daily market update: Primark, Aston Martin, Pets at Home, Wood Group

“Another day, another sell-off on the markets, marking 2025 as one of the most gruelling starts to a calendar year for investors in quite a while,” says Russ Mould, Investment Director at AJ Bell.

“It’s not all doom and gloom though as some parts of the world are still up year-to-date, including China, Germany and the UK.

“Donald Trump continues to be the key reason why markets are having a bad day. He has now threatened to target all countries importing goods into the US with tariffs, further clouding economic prospects around the world. Investors raced for protection by buying gold and defensive stocks including tobacco manufacturers and utilities.

“When things are looking bleak, it’s natural for investors to hide in certain parts of the market that either act as safe havens or industries whose demand should be unaffected by fluctuations in the economy.

“The FTSE 100 slipped 0.9% as commodity producers and banks weighed on the index, both economically sensitive sectors.”

Primark

“Comments by Associated British Foods’ Chief Executive George Weston on improper behaviour by the head of Primark implies he is furious at what’s happened.

“He makes it perfectly clear: everyone in the business needs to be treated with respect and senior managers must uphold high standards, with no exceptions.

“The situation involving Primark CEO Paul Marchant and his departure will cause some temporary disruption to the business as Finance Director Eoin Tonge will be running the show until a new CEO is appointed.

“However, Primark is a well-oiled machine and Tonge is no stranger to thinking on his feet and adapting to different roles, having previously held a range of finance and strategy positions at Marks & Spencer and Greencore.”

Aston Martin

“There are some strange goings-on at Aston Martin. First, the Yew Tree Consortium is seeking permission to avoid having to make a mandatory takeover offer for the business. Second, Aston Martin is selling the family silver to raise additional cash to relieve pressure on the balance sheet.

“A shareholder going over 29.9% normally has to make a full takeover offer under the UK City Code on Takeovers and Mergers. The Yew Tree Consortium has tabled a proposal to lift its stake to 33%, yet it is seeking an exemption from the takeover rule.

“Exemptions have been granted in the past, yet it feels like a takeover would be a better outcome as it would mean the car company would be free to pursue a turnaround strategy out of the public spotlight.

“Aston Martin’s performance as a listed company has been worse than a three-wheeled Reliant Robin on the motorway. The company wants to be in the fast lane, but it’s spent more time broken down on the hard shoulder.

“Time after time, Aston Martin has tapped investors for more money, yet the business is arguably going nowhere. Selling its stake in the Aston Martin F1 Team screams of desperation, even if it gets a good price.

“Aston Martin ended 2024 with £1.16 billion of net debt which is 1.7 times the company’s market value and 4.3 times adjusted earnings. The balance sheet is battered and bruised and taking steps to inject more cash was inevitable.”

Pets at Home

“Continued pressure on Pets at Home’s retail arm means investors were sick as the proverbial parrot with the company’s latest update, which included a damaging downgrade to profit guidance for the current financial year.

“While Britons are famously devoted to their furry friends, consumers have less disposable cash to spend on toys and treats, and are focusing more on the essentials which is making life difficult for a specialist like Pets at Home. There is also competition from larger, non-specialist rivals like the supermarkets who have more capacity to compete on price.

“Pets at Home still hopes to take market share thanks to investment in its digital platform and continued progress in getting customers to sign up to its loyalty scheme.

“It needs to generate some momentum with sales to mitigate the impact of rising costs associated with changes in last year’s Budget.

“The struggles on the retail side mean the company is increasingly leaning on its vet operation, which is performing strongly but is operating under somewhat of a cloud given an ongoing CMA probe into the sector.”

Wood Group

“The situation continues to deteriorate at energy services business Wood Group which is damaging its credibility not just with investors but crucially potential customers too and its current suitor, Sidara.

“The deadline for Sidara to formalise a takeover deal has been pushed to 17 April but whether the latest revelations cause a rethink for the Dubai-based group or complications in the timetable remains to be seen.

“While the issues revealed in a draft review of the business mainly relate to historical performance at its Projects business unit and do not relate to cash flow, they raise questions of culture given the failure to maintain robust accounting standards. The shares now face a suspension while historic accounts are restated.

“Wood Group has been dealing with legacy issues ever since its 2017 takeover of Amec Foster Wheeler as problem contracts put pressure on its balance sheet. This necessitated the 2022 sale of the built environment consulting business to reduce borrowings.

“While a price tag for any takeover of Wood Group has yet to be revealed it is sure to be way below the £1.6 billion which was on the table before Sidara walked away from a previously mooted deal last year.”

Pennon

“Water companies continue to do little to clean up their reputation with the regulator, investors, politicians and households with Pennon announcing £36 million worth of costs associated with a high-profile water contamination incident in South Devon.

“The South West Water operator expects earnings to be in line with expectations and has started a big investment programme to upgrade its infrastructure. It needs this to go smoothly and to avoid further incidents if it is to regain the confidence of the market.”

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