BUSINESS LIVE: Greggs eyes further growth; US rival to buy Spirent; IWG profits soar

As Jeremy Hunt prepares to present what could be his final budget as Chancellor this week, the British pub industry remains in tremendous danger.

Closures continue to ruin the sector; Some 3,000 pubs have closed in the last six years, including 509 in 2023, according to the British Beer & Pub Association.

The battle against HIV received a boost after GSK reported data showing one of its drugs can be taken as few as three times a year.

ViiV Healthcare, the company’s HIV medicine arm, said a clinical trial of a new formulation of its long-acting treatment Cabotegravir had shown it could be taken “at least” once every four months to provide protection against infection. .

This is in stark contrast to most HIV prevention treatments, which require users to take pills every day to protect themselves from the virus.

Lloyd’s of London insurer Hiscox posted a record annual profit as rising interest rates and the strength of its trading business helped offset claims inflation and the effect of currency swings.

The London-listed company, which covers a range of risks from natural catastrophes to cyberattacks to kidnappings and art theft, said on Tuesday that pre-tax profits for 2023 rose to $625.9 million from $275. .6 million dollars from the previous year.

Net written premium from insurance contracts for 2023 increased 10.7 percent to $3.56 billion.

Hiscox said the retail outlook for 2024 was positive.

Matt Britzman, equity analyst at Hargreaves Lansdown:

‘Greggs continues to demonstrate why it is the UK’s leading takeaway brand (YouGov Brand Index). It is a company that is trying to grow, with the aim of exceeding 3,000 stores in the United Kingdom and at the same time improving its multi-channel approach to offer a better service.

‘Digital channels are booming, with delivery sales increasing by 23.6% last year following partnerships with Just Eat and Uber Eats. Greggs is expanding its opening hours to capture a greater share of the nighttime market and strengthen its brand to deepen loyalty and attract new customers.

‘Greggs is much more than just a pleasure, and its value offering puts it in a sweet spot among consumers still struggling with higher costs of living. Maintaining that price is key and, with cost inflation slowing, Greggs is ensuring customers feel the benefit too. This is likely to be a small drag on sales growth this year compared to last, but there are plenty of other growth avenues to target.

‘Investors do not have to sit and wait while the growth strategy is developed. Greggs already boasts a modest forward yield of 2.6% and today’s special dividend is further evidence that the board is willing to pay investors while it expands.

Global office rental company IWG’s annual headline profits soared 34 percent last year, driven by stronger demand for its flexible workspaces and strong pricing.

The London-listed owner of the Spaces and Regus brands said core profit amounted to £403m for the year to December 31, beating market expectations for a return of £398m.

‘We enter 2024 building on the momentum of 2023 as we continue to grow our customer base, global partnerships and best-in-class network.

‘While 2023 was a record year for both revenue and network size, we continue to see significant growth potential. With 1.2 billion white-collar workers worldwide and a potential audience valued at over $2 trillion, there is substantial room for growth and as a company we have a strong focus on capturing more of this market in the coming months and years. ‘

Bitcoin and gold hit all-time highs as investors bet on interest rate cuts this summer.

US communications equipment company Viavi Solutions has agreed to buy British telecoms testing company Spirent Communications in a deal valued at around £1bn.

Spirent shareholders will get 175 pence per share, reflecting a 61.4 per cent premium to the company’s closing share price on Monday.

Eric Updyke, CEO of Spirent, said:

‘Spirent has gone through a period of significant transformation and growth in recent years and I am proud of the significant progress we have made, thanks to the efforts and commitment of our people. We have evolved our offering and routes to market to focus more on high-quality, high-growth software-centric solutions and have become a mission-critical partner for our customers in a more complex and digitalized world.

‘However, more recently we have faced significant challenges due to the macroeconomic context and the impact of this on our main end markets. These conditions are likely to continue for some time.

‘The combination with the Viavi Group offers a highly complementary product offering that can be marketed globally. It will allow Spirent to build on the strategic progress we have made to date, with a partner that has the scale and resources to capitalize on the long-term growth opportunities ahead. The combination of the Viavi Group and the Spirent Group creates a stronger business that will be better able to compete in what remains a challenging market environment and we are confident in the opportunities this will bring for many of our stakeholders.”

KPMG has been fined £1.5m for “basic failings” in its audit of advertising firm M&C Saatchi which emerged following an accounting fiasco in 2019.

Adrian Wilcox, a partner at KPMG, was also fined £48,750 as a result of an investigation by the Financial Reporting Council (FRC), which regulates the accountancy industry.

Greggs expects further profit growth in 2024 after underlying pre-tax profits rose 13 per cent to £168m for last year, boosted by the extension of its opening hours into the evening and the expansion of the food delivery.

The group famous for its sausage rolls posted underlying sales growth of 13.7 percent for the year and said a five-year plan to double sales by 2026 was on track and that it continued to target 3,000 outlets. .

It opened 220 new stores in 2023, bringing its store to 2,473.

‘Reflecting on another year of rapid growth, I am very proud of how our teams have risen to the challenge of serving more customers through more channels.

‘Whether in our stores, our manufacturing sites, our distribution network or at Greggs House, our teams stepped up to make sure we kept pace with growing customer demand as we delivered on our strategic growth plan .

“We are on track to deliver our bold five-year growth plan to double sales by 2026 and have significantly more than 3,000 stores in the UK in the long term.”