Struggling fashion firm Superdry (SDRY) is considering swinging the axe on up to 200 jobs as it seeks to cut costs. Staff were informed earlier this week of the possible job losses, which will primarily impact workers at the firm’s headquarters in Cheltenham. It comes as the company, which hires around 4,500 people, looks to slash its costs by £50million by 2022. A spokeswoman said: ‘As announced at our interim results in December, we have embarked on a cost transformation programme. As part of that, we have started a process of consultation with colleagues about how it will impact our central head office functions.’ While the final number of job losses is yet unknown, it is expected to be no more than 200.
Shares in troubled retailer Debenhams (DEB) tumbled 12% on Tuesday morning to less than 3 pence per share, as the firm issued a fresh profit warning. The department store chain scrapped its full-year earnings forecasts, as sales continue to dwindle – down 5.3% in the last six months – and it remains locked in refinancing talks with lenders. In an unscheduled update, Debenhams said: ‘The group’s statement made on 10 January that we were ‘on track to deliver current year profits in line with market expectations is no longer valid.’ The firm blamed ‘trading headwinds’ and ‘macroeconomic uncertainties’ for the sales decay and the more negative outlook. It also said the ongoing restructuring process – aimed at putting the firm on a more secure financial footing – was likely to hamper its performance as it now faces higher financing costs. In the last eight weeks, Debehnams’ sales have picked up a touch but remain in negative territory.
Gambling firm GVC Holdings (GVC) said 2018 was a ‘transformational’ year thanks to its acquisition of Ladbrokes and its joint venture with MGM resorts in the US as it posted rising full-year sales and profits. But the group, which also owns Bwin and Party Poker, reiterated it will close around 1,000 shops in the UK due to the new £2 limit on fixed-odds betting terminals, down from £100, which takes effect in April. GVC said net gaming revenues increased 9% to £3.6billion on a pro-forma basis, as strong growth in its online gambling business offset declines in UK shops. Underlying cash profits came in slightly ahead of the guidance range at £755.3million, and the group says 2019 has started well. Online net revenue saw strong growth at 19%, thanks to a ‘particularly pleasing’ performance in its Ladbrokes Coral UK online brands – although UK retail sales fell 3%.
Direct Line Insurance Group (DLG) has slashed payouts to shareholders and warned it could receive a ‘disruptive and potentially material’ hit from a no-deal Brexit as it posted falling profits. The home and motor insurance group, which also owns Churchill, said that although it does business mostly in the UK, it still has exposure to financial markets as it imports goods and services in order to fulfil insurance claims. Direct Line announced a 2.9% increase in the final dividend to 14p, but slashed the special dividend nearly in half to 8.3p. It comes as it posted a 6.4% decline in operating profit to £601.7million for 2018 and blamed the decline on lower reserve releases and investment returns, as well as a £75million impact in claims related to last year’s extreme weather. Gross written premiums – or the revenue an insurer expects to receive from its contracts – dropped 5.3% to £3.2billion. The group’s written premiums were knocked by the end of a key home insurance partnership deals for Nationwide and Sainsbury’s. But Direct Line’s own brands gross written premium increased by 1.8% in the period.
Mike Ashley is accused of ‘mischief making’ by Debenhams (DEB) directors and putting the interests of first. Debenhams has accused Mike Ashley of ‘pure mischief making’ in a fresh attack on the Sports Direct tycoon. The department store claimed in a letter to MPs that Ashley’s offer of a £40m interest-free loan to revive the business was an attempt to ‘apply further pressure’ on its directors. The comments came after Ashley – who has a 29.9% stake in Debenhams and is the retailer’s largest shareholder – lashed out at the company for rejecting the loan, telling a committee of MPs ‘it makes you want to blow your brains out’.
Aviva hires insider Maurice Tulloch on a bumper £6m deal after former boss was forced out by the board. Aviva (AV.) has appointed insider Maurice Tulloch as chief executive on a £6 million pay deal, after its former boss was ousted in a boardroom coup. Tulloch, 49, has worked for the insurer since 1992 and has been running its international arm for the past two years. He replaces Mark Wilson, who was forced out by the board in October following a string of mishaps. Tulloch will get a £975,000 base salary and up to £4.9 million a year in bonuses. He will be paid £137,000 a year towards his pension, equal to 14pc of his base salary in line with all the firm’s employees. This is a cut from the 28% paid towards Wilson’s pension, and comes after pressure from investors for firms to cut back their lucrative retirement schemes for bosses.
Ted Baker founder Ray Kelvin, 63, finally quits as boss over culture of ‘forced hugging’. The founder of Ted Baker (TED) has been forced to quit after he was accused of harassing staff and overseeing a culture of ‘forced hugs’. Ray Kelvin, who was paid £1.3 million last year, said the past few months ‘have been deeply distressing’ amid a wave of allegations over his behaviour. The 63-year-old has been on a leave of absence from the fashion firm since December and denies the accusations. But he said it was the ‘right thing to do, to step away from Ted’. He added the business has been his ‘life and soul’ since establishing it in 1988 from a single shop in Glasgow.
Interserve’s biggest shareholder tables a rescue plan for the contractor as it struggles under £631m of debt. New York-based hedge fund Coltrane Asset Management has written to Interserve (IRV) with a proposal that could see shareholders hold on to as much as 45% of the firm, compared with just 5% under a rescue package Interserve has agreed with its lenders. Interserve, which is struggling under £631 million of debt, confirmed it had received an updated proposal from Coltrane, which owns 27% of shares, and said it would make another announcement soon.
Metro founder Vernon Hill buys £752k of bank’s shares to show his faith in the firm after its value crashes 59%. Metro Bank (MTRO) founder Vernon Hill has spent more than £750,000 on shares in the lender after its value crashed over an accounting error. Hill’s investment follows an abysmal run for Metro, which has seen its value plunge by almost 59% after unveiling the mistake earlier this year. The American, 73, who serves as chairman, snapped up 82,000 shares for £752,000 on Friday, according to stock market filings. Chief executive Craig Donaldson spent £100,000 on 11,100 shares.
Anglo American mining chief doubles his pay to £14.7m off the back of his long-term share award. Anglo American (AAL) chief executive more than doubled his pay in 2018 – taking home a whopping £14.7 million. Mark Cutifani’s earnings at the FTSE 100 miner were inflated by a £10.9 million long-term share award. He has raked in around £38 million since he took over from Cynthia Carroll in 2013 to lead the world’s biggest platinum producer. In 2017 he took home £7 million. His base salary in 2018 was £1.3 million, 2% up from the year before. Anglo will be hoping to avoid a shareholder rebellion over the payout at its AGM next month. The share award was set up in 2016, giving Australian father-of-seven Cutifani almost 1m shares at a time when Anglo American’s stock had plummeted on the back of a slump in commodity prices.
Plexus Holdings (POS) shares surged after it bagged a contract to supply gas exploration equipment to Gazprom. The Aberdeen-based engineer will supply a wellhead, which will be used to drill a well exploring for gas in the Kara Sea Shelf in the Arctic Ocean, and other tools to Gazprom, which is majority-owned by the Russian government. Plexus chief executive Ben van Bilderbeek said it was a ‘breakthrough’ order.
Shares in British Airways parent International Consolidated Airlines Group SA (CDI) (IAG) nose-dived after the group told investors its free cash flow would fall this year. The firm was the worst performer on the FTSE 100 yesterday after bosses issued the ‘clarification’ following finance chief Enrique Dupuy de Lome’s mistaken claim the figure would grow. But in a letter sent to investors and analysts, IAG said it actually predicted its cash flow would be ‘lower in 2019 than in 2018’ because spending was set to go up and profits to stay flat. IAG reported an operating profit of £2.8 billion and more than £1.5 billion in free cash last year. It expects spending on one-off projects this year to rise to as much as £2.3 billion. City broker Goodbody said the confusion about the figures arose in an analyst call on Thursday, partly because of a change in accounting methods. Analysts had challenged de Lome’s calculations but he had insisted that ‘at the end of the day, we are foreseeing an improvement in free cash flow’.
Flybe Group (FLYB) shareholders were busy voting for a deal that will see the smaller airline cease trading on the London Stock Exchange from March 11. They waved through a cut-price £2.2 million takeover deal despite the struggling company’s board previously saying the 1p per share offer was ‘disappointingly low’. The approval means its holding company and assets are controlled by a Virgin and Stobart Group Ltd. (STOB) consortium called Connect Airways. There were attempts by some shareholders to disrupt the takeover and oust Flybe’s chairman but these ultimately came to nothing. One industry source said: ‘Shareholders weren’t given much of an option – either take 1p per share or liquidate the company.’
Blue-chip cigarette maker British American Tobacco (BATS) hit turbulence after revealing it had lost an appeal against long-running claims for customer compensation in Canada. BAT’s Canadian subsidiary, along with the Canadian subsidiaries of Philip Morris International and Japan Tobacco, faces having to pay billions of pounds to smokers who say it failed to warn them properly that its products caused cancer and other illnesses. Their lawsuit was first brought in 1998. BAT had appealed against a decision awarding damages but the ruling has now been upheld by the Court of Appeal of Quebec. The company stressed that only its subsidiary was affected, with analysts saying they expected the legal battle to escalate further to Canada’s Supreme Court.
Property website Rightmove (RMV) shares were given a boost as analysts sounded more positive notes about the falling number of estate agents using its service. The figure prompted concern in the City last week, sending the company’s shares lower despite it revealing record profits of more than £198 million. Yesterday they bounced back after analysts at Exane played down the agency fears. ‘While risks to Rightmove’s model from a disruptive No Deal Brexit are very real we see fears over [agency numbers] as overdone,’ they told investors.
