WEBVTT - Inditex Falls, Goodwin Down, Gym Group

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<v Speaker 1>Bloomberg Audio Studios. Podcasts. Radio. News. The Stock Movers Report.

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<v Speaker 1>Your roundup of companies making moves in the stock market.

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<v Speaker 1>Harnessing the power of Bloomberg data. Let's take a look

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<v Speaker 1>at some of the stocks on the move in Europe today.

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<v Speaker 1>I'm Stephen Carroll with Caroline Hepgrim. We're joined by Bloomberg's

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<v Speaker 1>breaking news editor, Louise Moon. Louise, good morning. Let's start

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<v Speaker 1>with fashion this morning and Inditex, the owners of Zara

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<v Speaker 1>and More.

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<v Speaker 2>Yeah.

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<v Speaker 3>So, they've had their first half results. Sales came in

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<v Speaker 3>pretty strong, showing that their growth is outpacing a lot

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<v Speaker 3>of their peers. Obviously, that's even as the cost of

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<v Speaker 3>living increases. But shares actually down. They were down this

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<v Speaker 3>morning as much as almost 5% in Madrid. Essentially, the

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<v Speaker 3>profit disappointed because of rising operational costs, so higher expenses there.

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<v Speaker 3>from Inditex. So, they've increased their capital expenditure by € 200 million.

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<v Speaker 3>That's to upgrade their headquarters. That's of they already laid

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<v Speaker 3>out almost € 2 billion, € 1. 8 billion for logistics facilities. That's

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<v Speaker 3>been over the past two years. What they're trying to

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<v Speaker 3>do really is elevate, particularly with Zara, the stores. So,

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<v Speaker 3>upscaling the stores, bringing in high-profile collaborations. And that is

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<v Speaker 3>costing them money and so that is uh you know

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<v Speaker 3>rising operational costs those higher expenses and that is dragging

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<v Speaker 3>down the shares despite those quite strong sales there.

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<v Speaker 2>Yeah absolutely even though it was hot weather you know

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<v Speaker 2>that they managed to sell even when there were heat

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<v Speaker 2>waves and a lot of people was you know not

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<v Speaker 2>wanting to shop maybe all that was the kind of

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<v Speaker 2>common wisdom okay let's get to industrials goodwin in advanced

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<v Speaker 2>talks for a new sale how are investors reacting.

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<v Speaker 3>Well actually a bit of breaking news they have just

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<v Speaker 3>actually uh reached an agreement to for that sale so

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<v Speaker 3>they've sold the bulk of their mechanical engineering unit That's

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<v Speaker 3>to a U.S. private equity firm, Cerberus Capital Management, for

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<v Speaker 3>about £ 1. 1 billion. So, this has been up for sale

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<v Speaker 3>for a while. They said, I think it was last week,

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<v Speaker 3>that they had multiple bidders. And this has now come through,

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<v Speaker 3>expected to complete in the first quarter. of next year.

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<v Speaker 3>And then Goodwin intends to pay a chunk of those

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<v Speaker 3>proceeds to shareholders. Shares have been on a bit of

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<v Speaker 3>a wild ride, I guess you could say, in the

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<v Speaker 3>past few days in reaction to this. And they're actually

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<v Speaker 3>lower this morning, potentially because that price tag had kind

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<v Speaker 3>of been floated, potentially not a high enough price tag.

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<v Speaker 1>It's a bit unclear.

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<v Speaker 3>As I say, this has just come through. But shares

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<v Speaker 3>actually falling on that news.

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<v Speaker 1>Yeah, down 5.8% at the moment. Finally, to some numbers

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<v Speaker 1>from Gym Group. Are they working out?

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<v Speaker 3>They're working out very well. Shares up about 6% on

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<v Speaker 3>the back of their first half results this morning. Essentially,

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<v Speaker 3>they're continuing to benefit from people snapping up relatively cheaper

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<v Speaker 3>gym memberships. So, pre-tax profit rose 31% against the same

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<v Speaker 3>period last year. They expect to hit the top end

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<v Speaker 3>of their guidance range for their full-year numbers. They started

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<v Speaker 3>a £ 10 million buyback and they plan to open 20

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<v Speaker 3>sites this year. So, benefiting from more members and more

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<v Speaker 3>member spending. Also, costs are coming in lower than expected.

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<v Speaker 3>And they are slightly raising their prices. They've benefited from that.

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<v Speaker 3>They say there's more space to do that without damaging

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<v Speaker 3>their competitive edge in that kind of mid-market gym space.

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<v Speaker 3>There is still, obviously, competition from the very budget end.

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<v Speaker 3>But within their space, they're performing very well. So, shares

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<v Speaker 3>up about 6% in morning trading.

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