7 May 2019 – trading statement

A first quarter trading update has revealed that group system sales were up 4.5% in the 13 weeks to 31 March 2019.  UK & Republic of Ireland has performed well with system sales growth of 4.8%.  However, International sales were disappointing and an operating result below the prior year means the company no longer expects this segment of the business to achieve break-even this year.  The core UK and Republic of Ireland markets account for 90% of the business but it is clearly disappointing that there are issues outside these markets, where future growth is seen.  Digital expertise is said to remain a key driver of customer engagement, with online accounting for 81.7% of total sales in the UK.  The shares are still modestly rated despite the minor setback but it is difficult to see what will drive the price higher in the near term.  We therefore move our rating to HOLD for now.