Drax in £700m Scottish power deal to boost earnings in shift away from coal. Drax Group (DRX) has bought a clutch of power plants from Scottish Power owner Iberdrola for £702 million in a further shift away from coal. The portfolio, which includes the famous Cruachan plant in Scotland known as “hollow mountain” and featured in James Bond films, will boost Drax’s low carbon push. The earnings from the portfolio are expected to be between £90 million and £110 million in 2019. Chief executive Will Gardiner said: “This acquisition makes great financial and strategic sense, delivering material value to our shareholders through long-term earnings and attractive returns.”
McAlpine gets £350m boost as it wins contract to build Deutsche’s new home. Sir Robert McAlpine has landed London’s biggest building deal of the year, overseeing the construction of Deutsche Bank’s new headquarters above Moorgate Tube station. McAlpine — behind iconic projects in the capital such as the 2012 Olympic stadium — has landed the 21 Moorfields project from developer Land Securities Group (LAND). The construction deal, worth an estimated £350 million, is a boost for the privately owned contractor, which made losses of more than £20 million last year. Deutsche Bank, which employs around 8000 staff in London, committed itself to the scheme last year in a morale-booster for the City after Brexit.
Merlin Entertainment dented as Legoland parks’ growth falters. Attractions operator Merlin Entertainments (MERL) had less than awesome news for investors on Tuesday as sales growth at its Legoland parks slipped into reverse. The update for the first 40 weeks of the year, including the crucial July and August summer months, saw like-for-like revenues slip 0.3%. The lack of a Lego movie this year meant no tailwind for visitor numbers, although a film will be released early next year. Chief executive Nick Varney said he had been braced for a weaker performance after several years of very strong growth, driven by investment in the parks and popular films. Problems at one park in Shanghai, which was closed, meant profits were short of previous expectations.
Footasylum trips up as it swings to £4 million loss. Sportswear seller Footasylum (FOOT) punishing start to life as a listed company took another tough turn on Tuesday as it slumped into the red. The retailer, which floated on London’s junior AIM market in November, posted a loss of £4 million for the six months to August 25, compared with pre-tax profits of £2.3 million the year before. Footasylum was forced to slash prices to shift its wares and continued to invest in the business, it said. It will now open two shops a year, down from four, in the next few years “to conserve cash” and focus on refurbishing and expanding some of its existing 66 stores.
Big Four supermarkets ailing as Christmas food battle hots up. The UK’s biggest supermarkets are struggling to keep up with rivals as they enter the key Christmas trading period, it emerged on Tuesday. Three of the Big Four grocers — Tesco (TSCO), Sainsbury (J) (SBRY) and Asda — lost shoppers to rivals in the 12 weeks to October 7, according to the latest industry data from Kantar. Tesco’s market share fell from 28% to 27.4%, Sainsbury’s was down from 15.8% to 15.4% and Asda’s decreased from 15.5% to 15.3% compared with this time last year. Morrison (Wm) Supermarkets (MRW) was flat at 10.3%. Discounter Aldi continued to snap at their heels. Its growing number of stores helped it increase its market share by 0.8% to 7.6% and sales rose by 15.1% — the fastest growth since January for the German chain.
Personal hygiene firm Venture Life Group (VLG) is ripe for takeover. Chris Donnellan said: “We believe Venture Life is set to deliver strong revenue and earnings growth on an organic basis, which alongside the current valuation makes this an attractive opportunity in our view. “The recent fundraising and acquisition of Dentyl will deliver additional revenue growth and exploit the operational capacity management has built, enhancing growth expectations, reducing debt levels and highlighting the value within the business.” But in a highly competitive market others believe Venture Life will struggle to go it alone. One source said: “The company does have a unique selling point but competing in the pharmaceutical market is hard. Bigger firms spend tens of millions marketing products, something Venture Life just cannot do.” Potential suitors include fellow AIM-listed rival Alliance Pharma. Procter & Gamble, GlaxoSmithKline, and Johnson and Johnson’s consumer divisions have also been touted as possible options. Venture Life already manufactures products for Alliance Pharma. There can be no guarantee it’ll be snapped up but then how many Whitbread investors foresaw Coca-Cola buying Costa at the start of the year?
