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Despite a solid Christmas for its core food business, Sainsbury’s (SBRY) festive period was knocked by underperformance in its clothing, merchandise and Argos businesses.

The share price dropped 6 per cent after the grocer said that sales growth for the six weeks to 3 January in its clothing and Argos units came in 1 and 2.2 per cent behind last year respectively. Festive food sales rose 4.6 per cent, however.

“General merchandise is the most cyclical area of the supermarket economy to be in, so being overweight in this arena can really slow sales down when things get tough,” said Aarin Chiekrie, an equity analyst at Hargreaves Lansdown.

But despite the slowdown in its non-food segments, the supermarket chain maintained its full-year operating profit guidance of more than ÂŁ1.0bn.

Chief executive Simon Roberts said the group still expects to return over ÂŁ800mn to shareholders over the course of the financial year, through dividends and an ongoing share buyback programme.

Star manager Terry Smith has put his fund’s 2025 underperformance down to a heavily concentrated US stock market and Novo Nordisk’s (DK:NOVOB) previous management squandering its advantage in the weight-loss drug market. 

The Fundsmith Equity Fund (GB00B41YBW71) returned less than the MSCI World Index for the fifth consecutive year. 

In his annual letter to investors, Smith listed market concentration, the increase in assets held in index funds and dollar weakness as key issues.

The fund’s position in Novo Nordisk was the biggest detractor to performance. Smith said the company had lost its “market leading position in what is probably the most exciting drug development for about three decades” and “failed to prevent illegal generic competition in its core US market”.

“One of our mantras has been that we should always invest in businesses which could be run by an idiot so that performance is not heavily reliant upon management,” Smith wrote. “We have been made painfully aware that the range of businesses which can be run by an idiot is much more limited than we thought.”

The board of Herald Investment Trust (HRI) is proposing a 100% tender offer to shareholders, in a bid to persuade US activist Saba Capital to sell its position in the trust.

Boaz Weinstein’s Saba holds a circa 31 per cent stake; last year, other shareholders pushed back against its attempt to appoint its nominees to the trust’s board. However, the current board believes that Saba will eventually take control if a solution is not found. Shares in Herald rose 7.5 per cent on the news. 

Saba could in theory block the cash exit proposal. But if that happens, the board says it will launch a further tender offer “on terms which cannot be blocked by Saba alone” to make sure “shareholders can at least receive cash rather than automatically remaining in a vehicle which is likely to become in effect controlled by Saba”.

Stifel analysts said that the move from Herald has taken longer than expected, but “at least the corporate action appears to be being implemented properly, thoroughly and fairly with all shareholders having the same access to the cash exit”. They also argued it would make sense for Saba to support the tender offer.

Shares in Unite Group (UTG) rose 1 per cent in early trading after the student landlord launched a ÂŁ100mn share buyback, equivalent to 3.5 per cent of its current market cap.

Unite also released a trading update for the year ended 31 December 2025. The company says it is on track to achieve its adjusted EPS target of 47.5-48.25p. 

Less positively, Unite’s sales rate for the 2026/27 academic year is tracking 3 percentage points lower than at the same time last year, at 64 per cent. While the company has reiterated its targets of 93-96 per cent occupancy and 2-3 per cent rental income growth for 2026/27, this suggests a continued softening in the student accommodation market.

The company said its ÂŁ723mn acquisition of smaller peer Empiric (ESP) would complete at the end of this month. HM

Chancellor Rachel Reeves will announce a relief package for pubs that will see her U-turn on key policies announced in the November Budget, after an outcry from the industry.

Pubs stocks were slightly up following reports that Reeves will reverse her plan to scrap business rates relief, with shares in Fuller, Smith & Turner (FTSA), JD Wetherspoon (JDW), Marston’s (MARS), Mitchells & Butlers (MAB) and Young & Co’s Brewery (YNGA) receiving a modest boost ranging from 0.7 to 3 per cent.

The relief had helped mitigate against large cost increases from higher “rateable values”, which approximate a premises’ annual rent and are used to calculate business rates.

Intense lobbying from pub operators raised concerns that removal of the relief would add to an already heavy operating cost burden. The sector has struggled with the impact of wage rises and food inflation in recent months.

Analysis from industry body UK Hospitality suggests the average pub would face an effective 15 per cent rise in business rates next year, should Reeves’ original plans go ahead.

The British Beer and Pub Association said that a U-turn would be “potentially a huge win for pubs across the country”, and “could save locals, jobs, and mean publicans can breathe a huge sigh of relief”.

But Helen Dickinson, chief executive of the British Retail Consortium, was less optimistic. “This latest announcement looks like another sticking plaster on a broken system rather than the more fundamental reform required,” she said.

Halma (HLMA) has bought a Milan-based fire and gas safety business, Safetec, for €72.5mn (£63mn).

Safetec works in power generation, oil and gas, pharmaceutical “and other highly regulated sectors where stringent safety requirements are critical”, the company said. It generated revenue of €30mn last year and will continue to be run by its current management within Halma’s safety division.