Stagecoach fury after it is barred from three rail bids. Stagecoach Group (SGC) accused ministers of putting the future of the UK rail industry in doubt on Wednesday in a stinging attack as ministers dropped a pensions bombshell on the sector. The transport firm reacted after being disqualified by the Department for Transport from bidding for three new franchises for “non-compliant” bids. Stagecoach was chasing the East Midlands franchise, the Southeastern deal with support from Alstom and the West Coast franchise in a joint bid with Virgin and SNCF. But at the 11th hour Stagecoach was told it was being dropped because of its unwillingness to bear the long-term funding risk for railway pensions during the eight-year franchise period.
Network International float off to a flyer after shares surge 25%. Payments firm gave London’s moribund IPO market a shot in the arm on Wednesday after shares popped on their £2 billion stock debut. The middle east-focused company, chaired by former Worldpay chief Ron Kalifa and advised by eight banks, saw its shares rise 25% to 544p after listing at 435p. That increased Network International’s valuation from £2.2 billion to £2.7 billion.
Rolls Royce to heighten Trent 1000 engines checks due to blade hit. Rolls-Royce Holdings (RR.) will ramp up inspections on a popular jet engine used by more than a dozen airlines after discovering turbine blades were wearing out faster than expected. Checks on the Trent 1000 Ten engine, launched in November 2017, will increase over the next few months after signs too much flying at high thrust caused the blades to wear out prematurely. The move comes after Singapore Airlines grounded two jumbos fitted with the engines last week after identifying the issue. Rolls has suffered problems with vulnerable rotor blades before on two other versions of the Trent 1000.
City chatter as Canada’s GardaWorld eyes deal for £3bn outsourcer G4S (GFS). Is G4S a takeover target? A casual look at the share price, down a little today at 184p from 280p last August, suggests it might have caught the eye of bargain hunters. A snip, you might think, with a market cap of £2.9 billion. City traders were gossiping that GardaWorld, a Canadian security firm which is rather like G4S but with less of a reputation for losing prisoners on the way to court, might be casting its eye over the company. Last month G4S reported a 63% drop in full-year profits after it was forced to compensate thousands of staff for lost meal and rest breaks. The treatment of its 570,000 staff, or ability to stop its vans being hijacked by armed gangs, might not win any awards, but City sources say that under different management it could be a cash machine.
Tesco chief Dave Lewis ‘will stick around’ as profits jump. Tesco (TSCO) boss Dave Lewis on Wednesday downplayed City suggestions he might move on as the grocer’s turnaround is near complete. He said: “We’re four years into the turnaround. We have met or we are about to meet our targets this year. There are untapped value opportunities in Tesco and there’s an awful lot more that we can do.” Lewis was parachuted into Tesco in 2014, revived the retailer in the wake of its accounting scandal and struck a £3.7 billion deal to buy cash-and-carry wholesaler Booker. He said on Wednesday he had further strategic plans, which he will outline in June, potentially including launching a share buyback.
Shares in Indivior (INDV) plunge on US drug indictment update.Indivior’s future looked uncertain on Wednesday after the US justice department charged the addiction treatment specialist with using an illicit scheme to boost prescriptions of an opioid drug. Shares in the drug-maker plunged as details of an indictment and a warning that if Indivior is convicted it could be fined up to $3 billion emerged. Indivior said “an adverse verdict may have a material adverse effect on the company and its financial position and outlook”. Its shares fell 77.4p, or 78%, to record lows of 28p. It floated at 120p in 2014 after demerging from consumer goods giant Reckitt Benckiser.
Asos pays price for being complacent as profits plunge. The boss of ASOS (ASC) on Wednesday admitted the online fashion retailer had become complacent as its profits plunged. Chief executive Nick Beighton said: “We’re not satisfied with the results. We’re capable of much, much more.” He said he regretted not introducing enough new own-brand products to its website. But “we’re on that,” he added. “I wish we would’ve done it earlier in the season. It’s a competitive market. Every month competition gets better and so it should.”
McCarthy & Stone offers sweeteners to lure retirement home customers. Retirement homes builder McCarthy & Stone (MCS) is relying more heavily on price cuts and other incentives to sell homes in a tough housing market, the firm admitted on Wednesday. The firm, catering for the UK’s growing grey army, is increasingly using tactics like part exchange to encourage sales in a much more difficult climate since the referendum, according to chief executive John Tonkiss. Tonkiss has been cost-cutting to boost margins since taking over last year, with the group shedding nearly 200 jobs. The associated costs slashed pre-tax profits by two-thirds to £3.6 million in the six months to February 28.
Hollywood Bowl is on a roll with sales growth. Hollywood Bowl Group (BOWL), which has just opened the UK’s biggest tenpin bowling centre in a decade, on Wednesday posted higher first-half sales. Shares in the tenpin bowling operator increased 6p, or 2.7%, to 226p after it cheered a “strong” start to the year. Revenues in the six months to March 31 increased 5.3% and comparable sales rose 4.4%. The update comes just weeks after Hollywood Bowl opened its new 34,000 square feet venue at Intu’s Lakeside shopping centre. Other new branches include in Watford, and the firm now has 60 sites.
