Provident fights £1.3bn hostile bid with fresh plea to backers. Provident Financial (PFG) launched a surprise counter-attack to fend off a hostile bid on Wednesday by calling on shareholders who back the £1.3 billion deal to “think again”. The sub-prime lender, which owns Vanquis Bank, said the nil-premium offer from smaller rival Non-Standard Finance (NSF) was fraught with risks and could damage the company’s ability to borrow and pay dividends. Provident also revealed it had found new management for Vanquis Bank, a key concern for shareholders, and bonuses would start again for doorstep lending agents. The withdrawal of bonuses has dragged performance.
Legal & General becomes UK’s first £1 trillion fund manager. Legal & General Group (LGEN) became Britain’s first £1 trillion fund manager after seeing off a stock market downturn. The insurer’s fund arm, Legal & General Investment Management, added £42.6 billion last year despite the worst market conditions for a decade. The company said it had taken advantage of the “globalisation of asset management” to reach the figure. More workers saving into pensions —LGIM controls nearly a fifth of the £338 billion defined contribution market — also contributed to the milestone figure. Assets under management for the year ending December rose 3% to £1.02 trillion.
Just Eat (JE.) interim boss won’t be going for top job. Just Eat’s interim boss Peter Duffy on Wednesday said he doesn’t want the top job permanently. Duffy, seen as the front-runner after chief executive Peter Plumb was ousted in January, said: “I am not a candidate in that process. I decided I don’t want to be a candidate in that process… for personal reasons.” Duffy, who joined Just Eat in May last year as chief customer officer, has been credited with a recent improvement in profit margins. Revenues increased 43% to £778 million for the year to the end of December, with underlying profits up 6% to £174 million. But its operating costs increased to almost £600 million from £382 million a year ago, ahead of revenue growth.
Shepherd Neame commits to UK brewing as rivals sell up. Shepherd Neame (SHEP), the pubs landlord and Britain’s old brewer, on Wednesday vowed not to sell-out amid a number of rivals offloading their beer arms. Chief executive Jonathan Neame, whose family founded the firm in Kent in 1698, said: “We see a great future as one of the few remaining independent brewers [in the UK].” The company is behind brands such as Spitfire and Bishops Finger. His comments come weeks after Fuller’s announced a shock £250 million sale of its beer division to Japan’s Asahi. Beer volumes at Shepherd Neame fell in the 26 weeks to December 29 after a contract to brew and distribute Asahi goods under licence expired in early 2018. Comparable sales rose 4.1% at managed pubs, and tenanted pubs had a robust underlying performance.
Superdry co-founder Dunkerton saddened by ‘human cost of a failing strategy’. Julian Dunkerton, the co-founder of Superdry (SDRY), on Wednesday said he was “devastated” by the imminent job cuts at the fashion chain, amid a war with its top brass. Superdry will slash up to 200 jobs, mainly at its HQ in Cheltenham, over the next six weeks to save cash, the Evening Standard revealed yesterday. Dunkerton, who stepped down from the board last March and is trying to be reappointed, said: “We are now seeing the human cost of a failing strategy at Superdry. Talented people will be losing their jobs. The haemorrhaging of skills will be a disaster.” He added: “The leadership team clearly lacks any strategic vision. They are now trying to cost cut their way back to profitable growth, which is doomed to fail.”
Warehouse firm Tritax Big Box lifted as Brexit stockpiling spreads to hairspray. Warehouse owners are experiencing the “favourable dynamics” of Brexit, according to sheds firm Tritax Big Box Reit (BBOX) which on Wednesday said customers are stockpiling car parts, drugs and even hairspray. Colin Godfrey, a partner at the FTSE 250 property firm, said demand for space is high as manufacturers prepare for potential no-deal border delays. Godfrey added that the company expects more overspill work at its Erith site used by Ocado while the online grocer grapples with the aftermath of a fire at its Andover warehouse. Tritax Big Box, which counts Unilever and Morrisons as customers, saw rental income jump 28% to £161.1 million in 2018. It upped the dividend by 4.7%.
Gymbox plots London expansion after beefing up sales. London fitness chain Gymbox, known for its unorthodox class names such as anger management and ‘brexfit’, on Wednesday outlined expansion plans despite losses widening. The 15-year-old firm behind 10 clubs will open branches in Finsbury Park and Ealing this year, and it has a “healthy pipeline” of new sites planned for 2020-21. Chief executive Marc Diaper said 15 new classes will also be launched over the next 12 months. Current sessions include brexfit, where gym bunnies can ease political rage by hitting punchbags emblazoned with Boris Johnson’s face, or by taking part in a Theresa May sack race.
Big tobacco investors were having a party on Wednesday after the industry’s number one adversary Scott Gottlieb said he would be stepping down next month as head of the all-powerful US Food and Drug Administration. Gottlieb — himself a cancer survivor — is no fan of cigarette sellers. It marks a sharp turnaround in luck for British American Tobacco (BATS) and Imperial Brands (IMB) who only two days ago fell sharply as BAT said it would take a £436 million hit after a legal ruling in Canada which awarded billions in damages to smokers. This session BAT rose 119.5p to 3020p and Imps climbed 43p to 2621p as Gottlieb goes to spend more time with his family.
Smith (DS) (SMDS) sold its plastics division to private equity firm Olympus Partners for $585 million (£445 million). The funds from the deal will be used to pay down debt and shares in the company — which is a supplier to Amazon — were up 12p to 361p.
Burberry Group (BRBY) was in reverse — down 72p at 1881p — as analysts at Goldman Sachs slapped a Sell rating on the stock. Goldman says Burberry needs to invest more in its website to drive online sales, adding that the share price might be boosted if it were to buy a rival business.
Mark Dixon’s IWG (IWG) serviced offices group saw a big 55% spike in net debt to £460.8 million after changes to lease-accounting rules. Brokers at Peel Hunt said “investors cannot simply ignore it” and the shares sank 10.1p, or 4%, to 221.5p.
There was better news for Ultra Electronics Holdings (ULE), which makes torpedo defence systems for submarines, despite its posting a 30% drop in profits. New boss Simon Pryce — who joined last month — promised to tackle mounting costs at its US defence contractor business. Investors were prepared to give Pryce a chance and shares jumped 166p, or 14%, to 1400p.
