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magazineThe week's big news: Saga, Debenhams and more
The big mover in the past week is over-50s travel and insurance business Saga (SAGA) which saw its shares nearly halve to 60p on the one-two punch of a big profit warning (4 Apr) and subsequent negative research report from investment bank UBS (8 Apr).
Alongside its full year results, the company cut its dividend by more thn half to 4p and guided for profit in the current financial year some 35% below previous consensus forecasts at between £105m and £120m.
This reflects a change in strategy for its insurance arm and setbacks with its holiday business, all now requiring significant investment. UBS says: ‘We find further execution risks around the new strategy, which we expect to weigh on the PE (price-to-earnings) multiple.’
Elsewhere department store Debenhams (DEB)entered administration on Tuesday (9 Apr), wiping out shareholders and frustrating the efforts of Mike Ashley to take control of the group and add it to his Sports Direct (SPD) empire.
Shares in City Pub Group (CPC:AIM) jumped nearly 5% after reporting full year results with a £2.6m pre-tax profit versus a £0.2m loss a year earlier.
City Pub aims to double the size of its estate to between 65 and 70 sites by 2021.
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