Michael O’Leary out of the cockpit in revamp of troubled Ryanair. Ryanair Holdings (RYA) chief executive Michael O’Leary unveiled plans to step back from the controls of the budget airline on Monday, 25 years after slipping into the cockpit. The major overhaul sees the motor-mouthed multi-millionaire step upstairs to become chief executive of a group holding company and the creation of four subsidiaries, including Ryanair UK, each with its own CEO and management team. Ryanair said the decision would “deliver cost and operating efficiencies” as well as allowing the airline to look at small-scale M&A. Although O’Leary is still committed to the group until 2024, the restructuring will also help form a breeding ground for an eventual successor to the 57-year-old Irishman
MC Mining’s turnaround story looks to be justified. Investors should be sceptical of chief executives selling a company turnaround story — more often than not they are a lame excuse for sustained underperformance. But in Mc Mining Limited (MCM) case the T-word might be justified. The miner was going through a torrid time just a few years ago, short on cash and owing money to the banks and Rio Tinto. The company now has breathing space to focus on its major project, a large coking and thermal coal development called Makhado Lite in Soutpansberg in northern South Africa, which has secured all necessary permits to begin digging. If financing discussions are completed, then it is expected the company could break ground in the final quarter this year, with full capacity being hit by the end of next year. It has a coal purchase agreement with China’s Huadong Coal Trading Center for the hard coking coal it plans to produce at Makhado. Under the deal Huadong Coal Trading Center will buy 400,000 tonnes of coking coal per year. It still needs to find a buyer for the other 400,000 tonnes as the project is expected to produce 800,000 tonnes in total. Chief executive David Brown believes he can sell the rest domestically. “South Africa currently has no significant hard coking coal which results in producers having to import the commodity. Makhado’s coking coal can replace some of these imports,” he said. Peel Hunt has a Buy rating and a target price of 75p on the stock.
Private bank Julius Baer to cut jobs to save £80m amid UK expansion. Wealthy private bank Julius Baer said UK expansion was going well despite having to cut jobs globally as part of a Swfr100 million (£77 million) cost-saving drive. The firm, which opened new offices in Manchester, Leeds and Edinburgh last year, pointed to “very solid” flows of cash from customers in the UK and said that revenues had grown after hiring more relationship managers. However, performance was disappointing and group profits fell 1% to Swfr 977 million because of rising costs. The company will shave off 2%, or 134 staff, of its 6693-strong workforce by the end of this year. Chief executive Bernard Hodler said the firm would “slow down the pace with regard to hiring” and confirmed there would be redundancies. “I cannot give you the exact number because we also want to grow in certain areas,” he added.
Opioid treatment firm Indivior sells rights to China drug for $123m. Indivior (INDV) on Monday sold off the rights to an opioid withdrawal drug in China for up to $122.5 million (£93.6 million). The group will sell the Sai Bo Song tablets to Hangzhou-based vaccine maker Pukang Biotechnology. China has an estimated 7.3 million people dependent on opioids, according to the latest figures. Indivior will get $17.5 million up front and up to $105 million more depending on certain sales targets being met over the next decade. Indivior chief executive Shaun Thaxter said offloading the tablets was “consistent with Indivior’s efforts” to focus on its other well-known drugs, Sublocade and Perseris. “With its knowledge of the local environment and scientific heritage, we believe Pukang is well suited to advance the science of addiction treatment in China,” he added.
City warns of worse to come as EU rules squeeze UK brokers. Tough new rules imposed on the City by the EU are making it harder for small and medium-sized companies to raise funds, hitting a key area of growth for the economy, says a new study of fund managers. The survey of investors by Peel Hunt and the Quoted Companies Alliance warns the quality of the research by brokers is getting worse, making it harder for fund managers to justify buying into potential growth stocks. The study comes after the Standard revealed that broker Daniel Stewart is on the brink of going out of business. Other similar firms are expected to merge or seek a bigger parent as they struggle for fees. MiFID II, European rules that force brokers to charge for research rather than wrap it up in banking fees, have been devastating for much of the old-style City. Today’s survey says two thirds of investors (62%) report since MiFID II was introduced, less research is being produced on mid and small-cap companies, with a third expecting further reductions in the volume and quality of research. Meanwhile 70% of fund managers said their access to research has decreased as a direct result of MiFID II. Of the UK quoted companies surveyed in the report, 25% said that MiFID II has had a negative impact on their business.
IGas Energy (IGAS) disappointed shareholders today as it said it expected this year’s net production to be between 2100 and 2300 barrels of oil per day — same as last year. The gas explorer, with assets across southern England, also said that chief operating officer John Blaymires will retire.
Frontier IP Group (FIPP) said it had won a £1.2 million UK government contract to develop a new antibiotic to tackle MRSA and other superbugs. The firm, which commercialises university technology, said the contract comes shortly after the UK’s Health Secretary Matt Hancock unveiled a five-year plan to tackle drug-resistant superbugs and encourage firms to develop new treatments.
Turbulence at Flybe Group (FLYB) continued on Monday as the embattled airline agreed to hold a vote on ousting its chairman and said it has received a proposal that could muddy a planned takeover deal. The regional carrier said that after a request from its biggest shareholder — Hosking Partners which has a 19% stake — it will call a general meeting to consider replacing chairman Simon Laffin with aviation expert Eric Kohn. Hosking wants Kohn to be made a director to investigate the cut-price sale of Flybe agreed last month. Flybe is set to be taken over by a consortium comprising Stobart Group Ltd. (STOB), Virgin Atlantic and Cyrus Capital Partners. But the rescue has come under fire: it valued the business at 1p per share, a 94% discount to a day before the sale announcement. Flybe today confirmed it has since received an alternative financing proposal from ex-Stobart boss Andrew Tinkler, who has a 5.91% stake in Southend airport-owner Stobart. The proposal by Tinkler, who also is in a spat with Stobart over his dismissal from the board, comprises a “capital injection and replacement of the funding” provided by the consortium.
Chinese New Year set to give luxury retailers in London a sales boost. A throng of tourists in town to see in the year of the pig will help West End businesses boost sales, retail experts predicted on Monday on the eve of Chinese New Year. New data from Global Blue, the tax refund payment firm, forecasts that international spend in the UK will rise 4% over the next 90 days, compared with a year ago. That will be led by high-spending Chinese shoppers in London, who on average fork out £919 per transaction. Derrick Hardman, managing director UK and Ireland at Global Blue said: “Following a year of uncertainty amidst Brexit, it is comforting to see that visitors from outside the EU continue to value the UK as a great place to visit and shop.” Chinatown landlord Shaftesbury (SHB) said the celebrations this month here are the largest outside of China, and the firm will see “huge crowds” across its estate spending in shops and restaurants. Luxury brands in the capital are also preparing for an influx of new shoppers. Accessories maker Radley has created a ‘If pigs could fly’ range, including £249 handbags. Boss Justin Stead said Chinese New Year is a “significant retail and business opportunity”. He added: “ Last year we had a terrific year with Chinese consumers here.” Gucci and Louis Vuitton are also promoting pig-themed products.
