Newspaper article The Journal (Newcastle, England)

Shares Launch Aim to Be Highlights for Investors

Newspaper article The Journal (Newcastle, England)

Shares Launch Aim to Be Highlights for Investors

Article excerpt

Byline: RETAIL Iain Laing ? 0191 201 6429 ?

THE launch of shares in insurer Direct Line Group and updates from WH Smith, Greggs and Burberry should be highlights for investors next week.

The flotation of Royal Bank of Scotland's Direct Line Group insurance arm will offer retail investors the chance to buy shares in what is set to be London's biggest stock market listing of the year.

Direct Line shares will begin trading on Thursday, priced at between 160p and 195p, according to RBS.

This would give the Churchill and Direct Line firm a mid-point valuation of PS2.66 billion, which came in at the lower end of City estimates in what was seen as an attempt to woo investors.

Demand has been strong, according to retail stockbrokers, of which 20 have been appointed to take orders from investors.

Richard Hunter, head of equities at Hargreaves Lansdown, said "thousands" of buyers had registered for shares since the pricing details were announced.

RBS is floating up to 33% of the business initially, with further tranches to come.

Bakery chain Greggs suffered in a rain-soaked first half of the year, but it may serve up an improved performance in Thursday's third quarter update.

The Newcastle-based group, which has 1,600 shops in the UK, saw sales fall 3.5% in the three months to June 30 after record rainfall meant shoppers stayed away from the high street.

Half-year profits fell 4.6% to PS16.5m, despite its efforts to keep a lid on costs.

The grim weather meant Greggs was also unable to see the benefits of its recent profile-boosting campaign, which saw it play a key part in convincing Chancellor George Osborne to overturn the Government's so-called pasty-tax. Chief executive Ken McMeikan marched on Downing Street to deliver a 300,000-strong petition against plans to charge 20% VAT on its hot pasties and sausage rolls.

Analysts are expecting Greggs to narrow sales declines in the second half, although the tough consumer spending conditions are likely to keep like-for-like results in the red.

Shore Capital retail experts forecast overall second half like-for-like sales to improve to a 1. …

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