Tesco's first-half profits in Europe were down by two-thirds; the Asian business is going backwards; and progress in the all-important UK operation is painfully slow. Nevertheless, there were some nuggets of good news on Wednesday for those willing to look hard enough. Refurbished stores in the UK are showing sales uplifts of 3-5 per cent. And by shifting its China business into a joint venture with a local specialist, the company has at least solved one of its more pressing international problems. Yet the overall picture is not an encouraging one.
Over on the other side of the channel, struggling Carrefour has managed to slim down the international operations and revamp the domestic stores. Carrefour shareholders are feeling the benefits, with its shares
up 80% in the 16 months since Georges Plassat became Chief. Can Tesco copy that? One day, Tesco may be a great recovery story. But on the evidence of the interim numbers, that day has not yet arrived, the Financial Times writes.
Yesterday's third quarter trading update from Domino's Pizza showed sales accelerating versus the same period last year. Year-to-date revenues are now up by 11% £438m, despite the warm weather. That should allow the company to hit its full-year pre-tax profit targets. In the company's favour is its high street presence and its successful strategy for establishing new delivery channels through the internet. The proportion of orders completed over the internet continues to grow and now represents 62.4% of the total. Sales completed over mobile devices also more than doubled in the third quarter and now represent almost a third of online sales.
However, a 2013 price-to-earnings ratio of 27.3 times profits requires rapid growth in sales and profits. Yet the company yesterday reduced its forecast for the number of UK store openings this year to just 50, from 60 previously. Domino's is undoubtedly a growing company but consensus expectations for profit growth of 20% in the year ahead looks quite a stretch, as does the rating on the share price. It is difficult to see where it can go from here. Hold, says The Daily Telegraph's Questor team.
Hochschild Mining is making a punt on the future price of silver through its $271m buy-out of two minority stakes in its Peruvian silver mines. The funding for those purchases is coming from a $340m loan and a further $72.8m by means of a placing arranged at 155p. So far this year however the price of silver has fallen by a third.
The biggest prize is the Inmaculada mine, which is being developed at a cost of $230m. This will produce 11.6m tonnes of silver at peak production in 2016; for comparison, the company as a whole has just confirmed this year's total output will be 20m tonnes. The company - 54% controlled by a member of the founding family - seems an attractive option, given the long-term fundamentals of the price of silver, although progress could be choppy if that silver price
falls further, The Times's Tempus says.
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