BUSINESS LIVE: Bloomsbury lifted by fantasy boom; Games Workshop hands cash to employees; Frasers profits up

The boss of a company involved in a counterfeit aircraft parts scandal has been arrested as part of a major criminal fraud investigation.

Police arrested Jose Alejandro Zamora Yrala, director of aircraft parts supplier AOG Technics, at his home in London yesterday morning.

London-listed shares are trading lower this morning as a strengthening pound weighs on the export-heavy FTSE 100, while high government bond yields also dampen risk appetite.

The personal goods sector is leading an early decline, with a decline of 2.2 percent.

The pound is up 0.2 percent against the dollar, while UK government bond yields have also edged higher, in line with their global counterparts.

Among individual shares, DS Smith fell 1.4 percent after the cardboard manufacturer announced the retirement of its CEO Miles Roberts and posted a 15 percent fall in its half-year pre-tax profit.

Future is down 15.8 percent after the publication of its annual results.

Smart Metering Systems has risen 41.9 percent after the energy infrastructure company said a company owned by funds advised by KKR and its subsidiaries will acquire it in an all-cash deal worth around £1.3 billion.

Morrisons and M&S have pledged to stop using illegal agreements to stop rivals from opening stores in the area.

The Competition and Markets Authority (CMA) condemned both companies after discovering a total of 65 agreements restricting competition.

Landowners agreed with retailers to restrict their land from being used by a competing supermarket – contrary to legislation introduced in 2010.

DS Smith CEO Miles Roberts is retiring after thirteen years at the British cardboard manufacturer and will step down no later than November 30 next year.

The company, which provides packaging, paper and recycling services, posted a 15 percent drop in its half-year pre-tax profit as volumes faltered and consumers spent more on services than goods.

British energy infrastructure company Smart Metering Systems has agreed to a £1.3 billion takeover led by private equity group KKR.

The offer of 955 pence per share represents a premium of 40.4 percent compared to Wednesday's closing price on the London stock exchange.

SMS said its directors intend to unanimously recommend that shareholders vote in favor of the deal.

“KKR believes that SMS, under private ownership, will be able to accelerate its growth and continue its transition from a grid-scale meter supplier and battery storage operator to a fully integrated, end-to-end energy infrastructure company,” it said in US based company. Investment firm reports this in a joint statement.

SMS, headquartered in Glasgow, is listed on the London junior market and employs around 1,500 people, mainly in the UK.

SMS shares are up about 41.3 percent at the open.

Aarin Chiekrie, equity analyst at Hargreaves Lansdown:

'Sports Direct's owner, Frasers, started the financial year well. The revenue growth was largely driven by some of the businesses acquired last year – a key part of the company's growth plan.

“Sports Direct remains the Frasers' flagship event, accounting for more than half of the group's turnover. There is significant momentum here, with the long-term goal of expanding its presence across Europe and becoming the number one sports retailer in the region.

'In the meantime, the group's elevation strategy is in full swing. It calls for new flagship stores to display products in a more flattering and digitally integrated environment, which has led to a material improvement in relationships with key global brands.

'Companies such as Nike and Adidas have gone so far as to appoint the group's Sports Direct business as a key partner, telling you everything you need to know about their position in the global sporting goods market. That has helped Sports Directs' ability to get hold of some of the latest products from these brands, which can be used to attract more customers into stores.

“Progress on this front has been impressive so far, but many more stores need to be upgraded before the new format can make a more meaningful contribution. Given the first half performance, full year profit targets appear well within reach, especially with the Christmas trading frenzy just around the corner.”

The story of Microsoft's multibillion-dollar takeover of Call Of Duty maker Activision Blizzard has taken a new twist.

US antitrust watchdogs argued in a California court yesterday that an earlier ruling by a federal judge in July that the £60 billion merger was legal under competition law was incorrect.

The Federal Trade Commission (FTC) filed a lawsuit in December 2022, claiming that the acquisition would allow Microsoft to stifle competition by taking ownership of Activision's library of popular games.

Games Workshop will hand every employee £2,500 in cash before Christmas, after the Warhammer maker saw solid profit growth in the first half.

The group told investors it expects to report core revenues of £235 million and pre-tax profits of around £94 million for the six months to November 26, up from £212.3 million and £83.6 million respectively last year year.

Games Workshop's profit-sharing scheme will see each employee receive £2,500 in December, for a total payout of £7.5 million, up from £4.5 million last year.

Frasers says it is on track to meet full-year profit expectations after first-half profits rose 12.6 percent, reflecting the success of a plan to take the group to the next level.

The FTSE 100-listed group, controlled by Mike Ashley, will make adjusted pre-tax profits of £500m to £550m in the year to April 2024, up from £478m a year earlier.

In the first half of the year the company earned £303.8 million, while sales rose 4.4 percent to £2.77 billion.

Michael Murray, CEO of Frasers Group, said:

'We delivered a strong performance in the first half of the year, with great momentum as we enter the Christmas trading period. The elevation strategy continues to drive strong trading performance across the business, with good growth at Sports Direct, supported by our brand partners.

'Our long-term ambitions for our Premium Lifestyle business remain unchanged, although it is likely that progress will remain muted in the short to medium term in the face of a softer luxury market. However, we continue to invest in our unique proposition with confidence.

“During the period, we have opened new, high-quality stores and further strengthened brand partnerships to deliver the best consumer experience. I am also excited about the potential of our strategic investments, which we expect will unlock further opportunities for the Group. We have a clear ambition to be the leading sports retailer in EMEA and we are making progress in broadening our footprint through a focused international M&A strategy.”

Borrowing costs fell as investors increased their bets on rate cuts next year, despite attempts by the Bank of England to quash such talks.

The yield on 10-year government bonds – a measure of how much the government pays to borrow – fell below 4 percent for the first time since May.

The drop came as financial markets indicated a just over 50 percent chance that the first rate cut would take place in May.

Bloomsbury Publishing has raised profit and revenue expectations for this year, as the Harry Potter publisher continues to be buoyed by 'phenomenal demand' for fantasy fiction.

The group told investors that full-year profits would be 'comfortably ahead' of forecasts of £274.2 million and that pre-tax profits would be 'materially ahead' of expectations of £32.9 million.

Nigel Newton, CEO, said:

'I'm pleased to report a strong period of trading, driven primarily by continued phenomenal demand for fantasy fiction.

“Bloomsbury has consistently built its success on the immense talent of our authors and the exceptional hard work of our teams who support them.”