Defence contractor Babcock International Group (BAB) has appointed its first female chairman. Ruth Cairnie, 65, will take over when Mike Turner leaves after its AGM in July. She has already joined the board of Babcock, which works on Britain’s fleet of submarines. Cairnie, a former Royal Dutch Shell executive, is a senior independent director of Associated British Foods, and a non-executive director at Rolls-Royce and energy firm Contour Global. Turner, 70, has been Babcock chairman for 11 years. He said: ‘She is a strategic thinker and strong leader, and we look forward to her bringing her in-depth experience, gained from a broad range of executive and non-executive roles at leading industrial companies.’
Profits plunged at the AA (AA.) last year as the breakdown service ploughed more money into road patrols and a digital turnaround plan. It is banking on drivers willing to pay higher fees than its rivals for a more extensive service that will include plug-in technology to diagnose problems, predict breakdowns and tell patrols where the customer’s car is if it runs into trouble. The Smart Breakdown service has already been launched to new members and will be extended to existing customers next year. The overhaul is the brainchild of the AA’s tech-savvy chief executive Simon Breakwell, who co-founded Microsoft spin-off Expedia. Higher spending on its smart systems shake-up, and more patrols and staff, cost it £26m last year, and were part of the reason why profits dived 62% to £53m. Revenues rose from £960m to £979m, but the number of drivers with AA accounts fell by 80,000 to 3.21m. The average time it took to arrive at a call-out fell from 50 minutes to 43 minutes. The AA is also expanding its insurance arm, with the number of motor policies sold rising 16% to 731,000. It expects the splurge on technology to keep customer numbers stable this year with a rise in 2020. Breakwell said: ‘We have spent the past year stabilising the operations – this year is about launching new services.’
Investors jumped aboard Stagecoach Group (SGC) after the train and bus operator raised its profit forecasts. In a trading update, the company said sales were up across almost all its divisions in the second half of the financial year. This included strong growth from its UK bus operations and the Virgin Rail Group, in which it has a 49% stake. Its wider rail business is set to be boosted by a settlement with the Government and Network Rail over disruption at Waterloo station in London two years ago. Analysts at RBC Capital estimate Stagecoach will get up to £7m for the problems, which caused severe delays on South West services it formerly ran. It was welcome news for investors after the company posted a £22.6m half-year loss in December.
Burberry Group (BRBY) was the third biggest blue-chip faller after it was hit by two glum analyst notes, dipping 2%, or 40p, to 1934p. Researchers at JP Morgan slashed their profit forecasts for the luxury retailer over Brexit concerns, while Bank of America Merrill Lynch has downgraded it from ‘neutral’ to ‘underperform’. Lynch’s rating change came after its analysts raised doubts about the speed of Burberry’s turnaround plans. Since the arrival of new creative director Riccardo Tisci, the company has been trying to attract younger customers and take the brand more upmarket to revitalise sales. But Lynch analysts said: ‘While we have no doubt management will remain confident in tone, we think there are few signs of a turnaround.’
Iron ore pellet maker Ferrexpo (FXPO) was down 9.7p, to 278.3p after an analyst downgrade. JP Morgan cut its rating from ‘overweight’ to ‘neutral’ just days after Ferrexpo announced it would delay the publication of full-year results to the end of April, over an investigation into the possible misuse of charitable donations. The FTSE 250 firm is probing ‘unexplained discrepancies’ in bank statements related to Blooming Land, a charity it set up in Ukraine.
Photo-Me International (PHTM) was a big faller after blaming a profit warning on Brexit woes. The Surrey company, which operates photo booths, amusement machines and laundry machines, said full-year profits would be lower than expected after a ‘challenging’ second half. For the year ending April, it is now expecting to bring in ‘slightly’ less than its previous £44m forecast. Last year Photo-Me generated £50.2m in profit after revenues of £229.8m.
The founders of Superdry (SDRY) have seen the value of their holdings fall more than £20m in just two days after staging a boardroom coup. Julian Dunkerton and James Holder, who still own 28.1% of the fashion chain they set up in 2003, were hammered as shares fell 8.8% on Tuesday and another 7.8% yesterday. The sell-off came as the pair led a shareholder revolt that saw Dunkerton and former Boohoo chairman Peter Williams elected to the board in a knife-edge vote. Having left last year, Dunkerton watched as sales and profits fell under Euan Sutherland, his successor as chief executive. But the 54-year-old’s return on Tuesday triggered a board exodus, with eight of nine directors quitting. The fall in share price saw Dunkerton’s 18.4% stake plunge in value by £13.2m to £70m. Holder, 47, took a £6.9m hit on his 9.7% stake, which is now worth just under £37m. Dunkerton, who is married to designer Jade Holland Cooper, 32, has promised to restore Superdry to its ‘former glory’.
