MARKET REPORT: Rottweiler sinks teeth into feeble Ted Baker just days after profit warning

An aggressive activist hedge fund has raised its stake in Ted Baker days after the ailing retailer put out a profit warning.

Toscafund, founded by Martin Hughes who is known in the City as ‘the Rottweiler’, has bumped up its holding from 5.9 per cent to 11.9 per cent.

While activist investors are often something other shareholders fear, Ted Baker’s stock lifted 5.5 per cent, or 19.6p, to 372.8p on the news.

Ted Baker this week revealed that its annual profits could sink as low as £5m this year

The fashion retailer revealed on Tuesday that its annual profits could sink as low as £5million this year, compared with £51million the year before. Its share price has fallen by 76 per cent this year, meaning groups such as Toscafund that are buying in now are doing so on the cheap.

Toscafund has not yet said if it has any plans in store for Ted Baker. But in the wake of the profit warning, a sexual harassment scandal, the departure of senior staff such as chief executive Lindsay Page, and an accounting error, some investors could be hoping for an activist investor with bite as well as bark to turn the ship around.

The FTSE 100 and FTSE 250 both rallied after the Conservatives won an 80-seat majority in the General Election.

The FTSE 100 closed up 1.1 per cent, or 79.97 points, at 7353.44, while the FTSE 250, which is more exposed to events that happen in the UK, surged 3.4 per cent, or 714.76 points, to 21507.79.

Across the pond, stock markets in the US had a mixed reaction to President Trump announcing the country has struck a preliminary trade deal with China and will start negotiations immediately for a ‘phase two’ agreement.

Some analysts speculated that the deal fell short of what traders had hoped for. In the wake of the election result, analysts at HSBC upgraded British Airways-owner IAG (up 13 per cent, or 72.8p, to 629.4p) and Dublin-listed Ryanair (from ‘hold’ to ‘buy’, saying the Tory majority will boost consumer and business spending.

BT shares jumped as it dodged potential nationalisation from a Labour government.

It was also on the up on reports it has struck a deal to split its business in Spain into two parts over the next few months – according to local newspapers. Shares rose 6.5 per cent, or 12.37p, to 201.65p.

Top directors and senior managers at investment platform AJ Bell, along with their partners, have landed an £11million pre-Christmas windfall.

Five board members and two senior managers sold 2.2million shares for 400p apiece, bagging £8.7million. The wives of five directors sold a further 577,398 shares, pocketing £2.3million.

BT shares jumped as it dodged potential nationalisation from a Labour government

BT shares jumped as it dodged potential nationalisation from a Labour government

The sales occurred earlier this week when AJ Bell employees became able to dispose of their shares for the first time since the company floated on the stock market last December. In total, employees sold shares worth £25.7million. AJ Bell closed up 3.7 per cent, or 15p, at 420p.

Centamin promoted finance boss Ross Jerrard to a temporary chief executive role and brought in mining investor Jim Rutherford as deputy chairman, with an eye to replacing founder Josef El-Raghy as chairman next year.

But enthusiasm about the shake-up, which comes in the wake of a takeover approach from Canadian group Endeavour Mining, was muted, with shares falling 1.8 per cent, or 2.15p, to 119.7p.

Student accommodation provider Unite Group advanced after the Competition and Markets Authority chose not to refer its £1.4billion takeover of Liberty Living to an in-depth, second-stage merger investigation. Shares rose 2.1 per cent, or 25p, to 1200p.

On AIM, retail investor favourite Hurricane Energy surged 9.9 per cent, or 3p, to 33.2p after it said it expects to make annual revenues of £123million. This was higher than the £115million analysts had forecast.

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