Latest news with #ModellaCapital
Yahoo
12 hours ago
- Business
- Yahoo
WH Smith closes UK high street business sale to Modella
British travel retailer WH Smith has complete offloading its UK high street business for a sale price £12m ($16.4m) less than previously disclosed. The retailer closed the sale to investment company Modella Capital to focus on expanding its global travel retail presence. The transaction, initially valued at £52m, has been revised to a maximum of £40m, including an up-front payment of £10m in the fiscal year 2025, an additional £20m tied to the business's cash flow until August 2026 and the remainder as deferred tax assets become payable. A further £10m may be realised based on the timing and realisation of tax assets. Despite the reduced sale value, transaction and separation costs are reported to remain at £27m. Post-transaction, WH Smith anticipates its headline net debt to be £425m as of 31 August 2025. As the peak summer trading period approaches, the travel divisions are expected to perform in line with market expectations. WH Smith stated: 'This transaction is consistent with the group's strategic focus on travel retail and creates a pure play global travel retailer which is well positioned to capture the substantial global growth opportunities in its key markets and drive enhanced shareholder value.' The revised terms were agreed upon after Modella Capital sought amendments due to the changed outlook and trading performance. WH Smith negotiated these terms to ensure a successful completion of the sale, since the original agreement was no longer viable. The retailer reported a 7% increase in global travel revenue on a constant currency basis for the 13 weeks leading up to 31 May 2025. "WH Smith closes UK high street business sale to Modella" was originally created and published by Retail Insight Network, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
21 hours ago
- Business
- Yahoo
1 sneaky UK growth stock to consider in July
Growth stocks come in all shares and sizes. You've obviously got the likes of Nvidia (NVDA), with its eye-popping growth rates, or Rolls-Royce (RR.L), which has positively transformed its profit margins. Then there's WH Smith (SMWH.L), which is a UK stock that may raise a few eyebrows when associated with growth. After all, many people might still associate the company with its high street stores, the first of which opened in London in 1792. But, sadly, there isn't much growth happening today on British high streets. E-commerce and high taxes are doing the irreversible damage there. In March, WH Smith announced it would sell its 480 high street shops to Modella Capital for £52m in gross cash proceeds. However, it announced today (30 June) that it now expects up to £40m. This will be made up of £10m expected in FY25, up to £20m in FY26, and £10m of deferred tax assets to be realised later. In other words, it's accepting £12m less to get the deal done, after a recent period of softer trading forced Modella to renegotiate the original deal. In response, the WH Smith share price dropped as much as 5% today, before clawing back some losses. It's now trading 2.5% lower at 1,100p. Here's why I think this FTSE 250 (^FTMC) stock is worth considering at this price. This transaction now positions WH Smith, which is keeping its brand, as a travel retailer. As the company puts it, 'This creates a pure play global travel retailer which is well positioned to capture the substantial global growth opportunities in its key markets and drive enhanced shareholder value'. Unlike the falling footfall and unappealing economics of the high street, global travel is a structural growth market. Over the next couple of decades, global airport passenger numbers are expected to double, and that will need a lot of investment in airport infrastructure. WH Smith already operates around 1,300 stores in airports, train stations, and hospitals across 32 countries worldwide. While growth at UK travel hubs is likely to remain limited due to opposition on environmental grounds, the Asia-Pacific and Middle East regions are expected to lead the charge. I like this pivot, as the challenges WH Smith faced on the high street aren't nearly as strong in travel retail. At airports and train stations, there's a captive audience with time to kill and far fewer alternatives. No one's browsing Amazon (AMZN) for a bottle of water or the neck pillow they forgot to pack! Back in FY19, WH Smith reported revenue of £1.4bn and a £106m net profit. Then the pandemic hit the business like a sledgehammer, resulting in losses and higher debt. For FY26, which starts in September, revenue is expected to be £1.74bn, with a net profit of £114m. Yet the share price is still more than 50% lower than before Covid, despite the firm bouncing back strongly. Indeed, it's gone nowhere for five years now! Looking ahead, the company expects headline net debt to increase to £425m by August, above previous expectations for £400m. So the balance sheet is a risk worth watching. However, the stock looks cheap enough to consider, in my opinion. It's trading for less than 13 times forward earnings, while offering a 3% dividend yield. The post 1 sneaky UK growth stock to consider in July appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Ben McPoland has positions in Nvidia and Rolls-Royce Plc. The Motley Fool UK has recommended Amazon, Nvidia, Rolls-Royce Plc, and WH Smith. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The Sun
a day ago
- Business
- The Sun
WH Smith slashes high street sale price by £12m in last-minute deal with Hobbycraft owner
WH SMITH has been forced to slash the price of its high street arm by a fifth in a last-minute renegotiation. The purchase by Hobbycraft owner Modella Capital was completed yesterday. But WH Smith now expects gross proceeds of only up to £40million, £12million down from the £52million it first forecast. WH Smith said: 'Following the agreement and announcement of the sale, the future of the high street business under a change of ownership has led to a more cautious outlook amongst stakeholders.' It agreed to renegotiate on the price 'given the original agreement was no longer deliverable'. The sale, signed in March, had valued the high street stores at £76million. Shares in WHSmith, now focused on travel site stores in airports and train stations in the UK and globally, closed 3 per cent lower. Modella will take over all 480 high street stores and rebrand them as TGJones. 2 Energy drop MILLIONS of household energy bills have been cut by 7 per cent after regulator Ofgem slashed its price cap today. Annual bills have dropped from £1,849 to £1,720, saving £129 a year for 22 million households on standard variable tariffs. Electricity now costs 25.73p per kWh and gas 6.33p per kWh. Uswitch urged families to lock in fixed rates now, with deals up to £145 cheaper than the July cap. Santander in TSB push SANTANDER has made a bid for TSB, which values the British retail bank at more than £2.3billion. TSB — which has £46billion in assets and £35billion in deposits — is currently owned by another Spanish lender, Sabadell, whose board could meet as early as today to decide whether to accept. 2 Barclays is also said to be in the running to buy TSB, though it has not commented. The proposed sale comes as Sabadell looks to fend off a takeover attempt by rival BBVA. Analysts believe selling TSB could be a defensive move.
The Independent
a day ago
- Business
- The Independent
WH Smith cuts sale price of high street business after weaker trading
WH Smith has been forced to slash the price of its high street business in a last-minute renegotiation after recent trading worsened. The retailer revealed that, while the sale of the high street chain to Hobbycraft owner Modella Capital completed on Monday, the cash returns from the sale would now be lower than first expected. It said it now expects to receive gross proceeds of up to £40 million, down from the £52 million it first forecast. WH Smith said investment firm Modella had sought to renegotiate the price due to 'softer' recent trading. 'Following the agreement and announcement of the sale, the future of the high street business under a change of ownership has led to a more cautious outlook amongst stakeholders,' it said. WH Smith added that it agreed to renegotiate on the price 'given the original agreement was no longer deliverable'. Shares in WH Smith – which is now purely focused on its shops based at travel sites in the UK and worldwide – fell as much as 8% at one stage, before settling around 3% lower in midday trading on Monday. The sale to Modella agreed in March – initially valuing the high street chain at £76 million – will result in the WH Smith name disappearing from British high streets and being replaced by brand TGJones. All of the approximately 480 stores and 5,000 staff working for the high street businesses will move under Modella's ownership as part of the deal. The sale comes after years of under-pressure trading at the division, while WH Smith's travel business has grown to make up the bulk of the group's sales and profits, with more than 1,200 stores across 32 countries. WH Smith's half-year results in April showed the profits at the high street chain had slumped by a quarter to just £20 million. Buyer Modella specialises in investing in retailers. It has previously put money into chains including Paperchase and Tie Rack, while in August last year it snapped up arts and crafts retailer Hobbycraft for an undisclosed sum.
The Guardian
2 days ago
- Business
- The Guardian
WH Smith cuts sale price of high street business by £12m
WH Smith has cut the sale price of its high street business by £12m, after trading at the chain deteriorated in recent weeks. The company closed the sale of its 230-year-old British high street business to the investment company Modella Capital on Monday, and revealed that the sale value terms have been revised down. WH Smith will now receive gross cash proceeds of up to £40m, not the £52m expected in March when it agreed to sell its 480 high street stores to Modella, which also owns Hobbycraft. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Shares in WH Smith fell 5% in morning trading, after the news of the revised deal terms. WH Smith told the City that the original agreement was 'no longer deliverable'. It said 'the future of the high street business under a change of ownership has led to a more cautious outlook among stakeholders,' and also blamed 'a period of softer trading' for the reduced sale price. 'It is not too surprising that Modella Capital got slightly cold feet about the deal it agreed with WH Smith back in March to buy the struggling high street business (soon to be called TG Jones), but at least it didn't pull out completely,' said the retail analyst Nick Bubb. While the high street business, which employs about 5,000 people, will be rebranded as TGJones, WH Smith is retaining its brand for its travel shops in railway stations, airports and hospitals. Modella revised down its purchase price at a time when concerns about the health of UK retail are rising. The latest official data showed retail sales volumes dropped at their fastest rate since December 2023 in May, down 2.7% month on month and 1.3% lower than a year ago. That decline was driven by a drop in sales volumes at food retailers, the Office for National Statistics said.
