British supermarket group WM Morrison has admitted that its sales performance over Christmas was 'disappointing' as it warned investors that full-year profits would come likely come in at the bottom end of forecasts.
Morrison, regarded as one of the 'Big Four' UK grocers behind Tesco, Sainsbury and Asda, said that total sales excluding fuel and VAT were 1.9% lower than last year in the six weeks to January 5th. Including fuel, sales fell by 3.3%.
On a like-for-like (LFL) basis, sales were down 5.6%, falling 7.1% when including fuel. That compares with Sainsbury which said this week that its LFL sales over the festive season were flat on last year, broadly better than what analysts had hoped for.
Morrison, which is currently developing an online shopping service with Ocado to compete with its rivals, labelled the key Christmas period as "very challenging" amid a slowdown in market growth.
"The difficult market conditions were intensified for Morrisons by the accelerating importance of the online and convenience channels, where Morrisons is currently under-represented, and by targeted couponing which was particularly prevalent in the market this Christmas," the firm said.
Nevertheless, Morrison did say that its online shopping service is "ready to launch".
"Whilst the sales environment continues to be very challenging, we have continued to manage our business very tightly. The board expects that our full-year underlying profit performance will be towards the bottom of the range of current market expectations."
Current forecasts have pencilled in an underlying profit of between £783m and £853m for the year ending February 3rd 2014, down from £901m last year. The consensus estimate is £812m.
Rathbone Brothers grew funds under management last year by more than many analysts had forecast and the company is eyeing potential opportunities for accelerating growth.
Total funds under management (FuM) rose 22.2% over the calendar year to £22bn, up 5.8% in the last quarter, as the smaller Unit Trust arm enjoyed stronger organic growth than anticipated, on top of the robust gains from the core Investment Management division.
Management said in a statement that: "Our outlook remains positive as we start 2014, in line with the current sentiment in investment markets.
"Rathbones remains well positioned to take advantage of growth opportunities as they arise and continues to consolidate its position as a leading provider of high-quality, personalised investment and wealth management services."
The FTSE 250 group saw a total rate of net inflows in FuM into Investment Management of 9.0% over the year, slowing to 8.5% on an annualised basis in the fourth quarter as market growth slowed in December. The division acquired £600m of FuM during 2013.
The Unit Trust division saw FuM rise 38.5% to £1.8bn by year end, with total net fund inflows of £170m in the fourth quarter and £327m for the full year.
Brokers Numis and Canaccord both admitted their forecasts had been surpassed.
Canaccord said the Unit Trust growth was especially significant as this growth should lift the division's margins and the momentum should continue into 2014. Strong net inflows suggest it might raise our 2014 and 2015 forecasts.
Numis analyst David McCann said: "We regard Rathbones as one of the quality names in the wealth management sector and thus we believe it merits a slight premium rating, due to its consistent net inflow record, consistent circa-30% operating margin and significant bias towards recurring fee income."