Kier boss ousted over rights issue debacle as Carillion fallout spreads. Shockwaves from the collapse of outsourcer Carillion claimed another corporate scalp on Tuesday as the chief executive of rival Kier Group (KIE) was unceremoniously ousted by the board. Carillion’s demise has thrown an uncomfortable spotlight on the fortunes of peers such as Interserve — engaged in a major restructure likely to leave lenders in control — and Kier, which was forced into a £250 million rights issue in November as banks pulled away from the sector. Kier chief executive Haydn Mursell paid the price for the sudden cash-call today as he was removed with immediate effect. His departure comes days after reports that investment guru Neil Woodford — a 16% shareholder — was pressing for the removal of Mursell or finance director Bev Drew after the rights issue and the halving of the share price in the past year.
Jupiter brings in Andrew Formica as chief executive on £445,000 salary plus bonus. Money manager Jupiter Fund Management (JUP) has hired one of the City’s biggest names, Andrew Formica, as its new chief executive just six months after he left Janus Henderson with a whopping £9.1 million severance package. Formica takes over from Maarten Slendebroek, boss for over five years but who in the past year has been battling billions of pounds of investor outflows and a 40% fall in Jupiter’s share price. Jupiter has been cutting its executive ranks and in December dismissed chief operating officer Lance DeLuca.
UK borrowing was surprisingly high last month as Europe cost the nation £1.5 billion more than last year, official figures showed today. In December 2017 the Government received a £1.2 billion rebate from the European Union as changes to its budget saw significant returns to member states. But the effect was much smaller last month, resulting in a £300 million net contribution. The one-off effects called a temporary halt to the improvement in the public finances, with net borrowing of £3 billion for the month ahead of the £2.7 billion seen a year earlier. The Office for National Statistics said it was still one of the lowest borrowing outturns for December in 18 years. Capital Economics said unless previous figures were revised, borrowing targets were in danger: “If public borrowing sustains this reduction for the rest of the fiscal year, net borrowing would come in at £30.7 billion in 2018/19, a fair bit higher than the Office for Budget Responsibility’s forecast of £25.5 billion.”
Tesco set to get rid of hundreds of jobs. Tesco (TSCO) is poised to slash hundreds of jobs from its supermarkets in the latest cost-cutting drive by boss Dave Lewis, the Standard understands. The grocer is to start consulting with staff as early as this week over potential job losses at store management level. Lewis, who has led a turnaround of the business since he arrived in 2014, has wielded the axe on more than 10,000 roles so far. He earned the moniker Drastic Dave when cutting costs at Unilever. The grocer is the latest to make job cuts, joining rivals Asda, Morrisons and Sainsbury’s in overhauling the structure of its stores. Tesco is aiming to make £1.5 billion in cost savings by 2020.
Dixons Carphone plots duel with Mike Ashley in big gaming hunt. The boss of Dixons Carphone (DC.) on Tuesday said he was banking on gaming to lure shoppers, setting up a High Street showdown with retail tycoon Mike Ashley. Chief executive Alex Baldock, who joined Dixons in April to implement a new strategy, has opened 17 “gaming arenas” within its shops, where customers compete against each other on in-store consoles, and plans to have 140 by next year. He added: “We’re pretty excited about this. Gaming makes stores a much more exciting destination. Shoppers can come in and get a feel of the tech.” The move could turn Dixons into a direct competitor to retailer Game Digital (GMD), in which Ashley owns a 25% stake. The tycoon paid £3.2 million last year for half of Game’s e-sports business Belong to set up similar gaming arenas in Sports Direct stores.
EasyJet’s sunseekers not put off by Brexit. easyJet (EZJ) passengers are shrugging off Brexit, with the budget carrier’s summer planes due to be fuller than they were this time last year. Johan Lundgren, the chief executive, said: “Second-half bookings [are] ahead of last year.” The load factor, which measures how many people are booked onto his planes for summer, is up 1%. “We don’t see a specific negative impact,” from Brexit, Lundgren added. “Clearly the uncertainty is not helpful, but the environment we’re in is solid despite of it.” Lundgren, who joked he’d seen “big traffic” between Brussels and London, said bookings for Brexit day, the 29 March, were in line with a year ago. His comments came as easyJet’s revenues rose 13.7% to £1.3 billion for the last three months of 2018, as the airline checked in 15.1% more passengers, or 21.6 million
WPP shareholder Martin Sorrell remains concerned about progress at ad giant. Adland veteran Sir Martin Sorrell on Tuesday said he still wants WPP (WPP), the firm he acrimoniously departed last year, to do well and he is “concerned” about progress there. Sorrell was in Davos for the World Economic Forum as he spoke about WPP, which he left in 2018 following an allegation of personal misconduct that he denies. “I remain a shareholder, so I’m very concerned about the progress that WPP makes too,” Sorrell, who holds 1.5% of WPP, told CNBC. He added: “Obviously it’s not been an easy period over the last six months or so in terms of major clients at WPP, but having said that we’re very focused on that progress.” The company, which he ran for 33 years, lost a decades-old creative account for Ford last October. New boss Mark Read plans to cut jobs, simplify its structure and increase investments. Sorrell, dubbed the Sage of Soho, also spoke about his new venture, digital advertising specialist S4 Capital (SFOR). He said the business, of which he is executive chairman, is focused on a smaller part of the market: “I can’t, for the life of me, believe that WPP is worried about little old S4Capital.”
