The owner of the New York Knicks basketball team saw its operating profit almost double last year following its historic championship win.
Madison Square Garden Sports (US:MSGS) owns the Knicks, which earlier this summer threw New York City into celebrations after it won the NBA championship for the first time in more than 50 years.
The extra sales from the extended play-off run, higher ticket prices, and more merchandise revenue helped push annual revenue up 11 per cent to $1.15bn (£0.85bn), while its operating profit rose 95 per cent to $28.9mn.
The group also owns the Rangers NHL ice hockey team. Last year, the Rangers didn’t make the play-offs so management decided not to increase the ticket prices. It is currently seeking to spin-off the hockey team to “create two distinct publicly traded companies” so shareholders can “more clearly evaluate each company’s assets and growth prospects”.
MSGS does not own the arena of the same name, but in the past year its valuation has more than doubled to $10bn. This looks expensive for a team with few hard assets, but compared to the LA Lakers which was just sold at a $12.5bn valuation, the Knicks look cheap.
GB Group shares tank after guidance downgrade
Fraud protection business GB Group’s (GBG) shares dropped a quarter after it reported “higher than expected” attrition in its American business and lowered its full-year guidance.
Issues with a few of its largest American customers has meant growth did not improve in the second quarter and pushed back its sales opportunities. As a result, it now expects full-year group revenue growth to be between 1 per cent and 3 per cent, down from previously guided mid-single-digit.
Management says there is still a “strong” sales pipeline, but it undermined this confidence by also announcing “strong cost-control” plans to offset the lost revenue.
Last year, it had to take a £73.1mn impairment following a “few years of underperformance”, which contributed to a £68.1mn operating loss.
On the morning of the announcement, shares fell 26 per cent.
Frasers buys Harvey Nicks from administrators
Frasers (FRAS) has bought department store group Harvey Nichols out of administration.
The deal involves six Harvey Nichols stores, including the London flagship, as well as sites in Manchester, Birmingham, Bristol, Leeds and Edinburgh. It has also bought stock and store fixtures from the Dublin store and remains in talks about running that business. The deal does not include the OXO restaurant, which was sold to another buyer.
Harvey Nichols has struggled in recent years. Its parent group’s pre-tax loss widened last year to £49.2mn, from £34.1mn a year earlier, as revenue fell by 10 per cent to £185mn. Frasers said a major restructuring is needed to create a sustainable business, which could include store closures and an overhaul of its operating model.
“The turnaround will require tough choices, and we are prepared to make those decisions, even if that means a smaller business in the near term,” said chief executive Michael Murray.
Frasers has bought more luxury businesses in recent years, including the House of Fraser department store group and the Flannels boutique. It is also the biggest single shareholder in German luxury brand Hugo Boss.
Harvey Nichols was bought from administrator FTI Consulting. The amount paid was not disclosed.
Cohort wins large sonar order
Cohort ‘s (CHRT) German subsidiary Elac has been awarded a €141mn (£120mn) contract from Saab (SE:SAAB.B) to provide sonar systems for the Polish Orka submarine programme.
The contract will begin immediately and run until the 2030s. This, and other recent wins, are expected to “enhance the group’s adjusted earnings per share” from next year and beyond, management said.
This is Elac’s second major submarine sonar win following €100mn-plus of orders secured from the Italian Navy. The latest deal is “a strong seal of approval that could open further follow-on opportunities” and justifies Cohort’s £20mn investment in Elac in recent years, said RBC Capital Markets analyst Ben Pfannes-Varrow.
Cohort’s shares rose by 6 per cent.