GKN plc GKN The collapse of sterling was to bring a new dawn for what was left of British Industry, lied Diddy David and the rest of his old Etonian clique of rulers. Well the truth is that it hasnt, at least not yet. All it has done is help companies to mask performances which are downright unacceptable. Thus for its first quarter, sales are up by 12%, trumpets GKN. Looks great that, dunnit, until you see that two thirds of that came from acquisitions and a quarter of it from beneficial currency movements. A mere 1% came from like for like growth which means that GKN just failed to take advantage of the opportunities which a collapsing pound were supposed to bring. GKN land systems led the decline with like for like sales down 6% even after taking into account a 3% currency benefit. Headmaster comments – can do better, must do better.
Travis Perkins TPK produced good 1st quarter growth in all businesses with total sales rising by 5% and like for like sales by 4.2% or 9.5% over two years, which at least shows some long term consistency. And it is all due to the company having a clear focus on driving the maturity of the heavyside range centre network. Presumably they know what they mean, even if nobody else does.
Rentokil Initial RTO First quarter revenue grew by 11% but 9% came from acquisition and only 2.8% from like for like growth. Pest control in North America had a great three months with 54% growth but, wait a minute, most of this so called growth came from acquisitions and only 6.4% from like for like growth. Not surprisingly the company does not offer any hope of beating expectations for the full year. Management seems to think it best not to give any reasons for this.
Punch Taverns PUB The big Punch pub sale has continued apace during the 28 weeks to 5th March and it is so beneficial to the company that it is ahead of target on this front. What is a welcome change is that underlying retail profits and sales are also ahead of expectations. EBITDA is down by some 10% following 18 months of strategic disposals but average profit per pub is up by 3%. Amazing really that what was one of the countries largest pub owners was so bad at managing its estate that it had to sell a lot of it off in the hope that it could make a profit out of what was left. Obviously the buyers of all these pubs, thought they could make a better job of running them, than Punch had.
ARM Holdings ARM Poor old sterling. It can’t do right for doing wrong. Now ARM claims its first quarter results have been impacted by the weakness of sterling, whereas nearly everybody else has been cursing the pound for its continued strength over the past year or so. First quarter revenue rose by 14% in US$ terms or 22% in pounds. There was strong demand for the company;s most advanced technology and the number of chips shipped rose by 10% to 4.1 billion