Royal Bank of Scotland Group (RBS) saw its profits more than double last year, providing shareholders with a dividend for the first time in a decade. The majority-state owned lender announced an annual dividend of 3.5p a share and a special dividend of 7.5p a share, taking total payouts, including an earlier interim dividend, to 13p per share. But, the bank’s chief executive, Ross McEwan, warned it faced a difficult economic environment amid a ‘heightened level of uncertainty related to ongoing Brexit negotiations.’ The lender said political turmoil meant it could struggle to hit its target of slashing its cost to income ratio to less than 50 percent as planned by 2020. RBS said it was seeing large corporate customers ‘delay investment decisions until they have more detail on the outcome of the Brexit process.’
Humbled entrepreneur Luke Johnson has suffered a £183m loss after his scandal-hit cake chain Patisserie Holdings (CAKE) was rescued by an Irish private equity firm. The company, left reeling after an alleged fraud by its former finance director, was sold by administrator KPMG to Causeway Capital following talks that lasted until 3am yesterday. Around 2,000 jobs have been saved, and 96 Patisserie Valerie cafes will stay open. But it is a devastating blow for executive chairman Johnson, 57, most of whose £260m fortune was tied up in Patisserie Valerie. He had a stake worth £170m on the day the fraud was revealed to the market in October, leading to an immediate suspension of trading in its shares. Chris Marsh, who was finance director at Patisserie Valerie at the time the scandal erupted, was arrested shortly after and subsequently released on bail. The value of Johnson’s stake has now been wiped out, rendering stock worthless. He also ploughed £10m into the business to keep it afloat, and an extra £3m to pay staff their January wages after it had to call in administrators. It is thought little of this money will be recovered. The wipeout means Johnson may have lost almost two-thirds of his wealth.
Traders wiped nearly £92m off the value of Restaurant Group (RTN) after its chief executive revealed he is stepping down for personal reasons. Andy McCue, 45, joined from Paddy Power to head TRG in September 2016, and has just steered through a controversial £559m takeover of noodle chain Wagamama. But investors were dismayed by his departure, sending shares down 11.1%, or 16.2p, to 129.8p last night. McCue said: ‘In recent years, we have achieved much in a challenging market. While I recognise that this decision is untimely, it is the right one for me and my family. We have a strong team in the business and a clear plan which we are focused on delivering.’ Shareholders had expressed concerns over the Wagamama takeover, warning that TRG needs to turn around the core business first. The Restaurant Group also owns Frankie & Benny’s, Garfunkel’s and Chiquito. It has struggled to grow sales amid a slowdown in spending on the High Street and stiff competition from online delivery sales such as Deliveroo and Just Eat.
AstraZeneca’s sales of cancer drugs increased by 50% in the last year, the group’s latest results reveal. Cancer drug sales surged to £4.7billion, with a new drug for metastatic non-small cell lung cancer called Tagrisso seeing sales rise by 95% over the period. Within the last three months of the year, strong sales of new medicines and growth in emerging markets gave drugmaker AstraZeneca (AZN) a further balance sheet boost. While other companies are fretting over Brexit, with some suggesting a shortage of medicines could be on the cards, AstraZeneca is confident it is well prepared. The group said: ‘All guidance and indications provided assume that the UK’s anticipated forthcoming exit from the European Union, even in the event of no deal, proceeds in an orderly manner such that the impact is within the range expected, following the Company’s extensive preparations for such eventuality.’
Concerns over the power balance at investment firm Ashmore Group (ASHM) have flushed out one of the Square Mile’s most low-key billionaires. Mark Coombs said he will cash in part of his £1 billion holding in Ashmore to appease worries over his ‘creeping control’ of the fund management group he founded over two decades ago. The Cambridge-educated lawyer, a pro-Remain Tory donor, has agreed to offload around 4 percentage points from his 39% stake a year in order to reduce his shareholding to a more appropriate level. The shares fell 15.4p, to 398p. Ashmore, which invests in emerging markets, also updated on its financial progress: underlying profits rose 8% to £98.8m in the six months to December 31.
The big riser yesterday was Micro Focus International (MCRO) up 12.3%, or 186p, to 1703.5p. Having endured a significant bout of indigestion in the wake of the £6.8 billion acquisition of Hewlett Packard’s enterprise software division two year ago, the technology group appears to be well on the road to recovery. So much so that it has extended its share buyback programme for the second time in three months, increasing it to just under £400m.
Morgan Stanley downgraded its rating on Royal Mail (RMG) to ‘equal-weight’ from ‘overweight’ after cutting its price target and earnings estimates for the postal delivery firm. The American broker is assuming the dividend payment will be lower than it had originally pencilled in, while the competitive landscape will remain tough.
Convatec Group (CTEC) shares tumbled 18.9%, or 28.05p, to 120.2p after it said a £117m investment programme is expected to crimp profits for the next three years.
Motif Bio (MTFB) shares fell 73%, or 29.18p, to 10.82p after it revealed the US Food & Drug Administration had failed to approve skin infection treatment, Iclaprim. This wasn’t a straight ‘no’ , as the agency wants more data on the drug. So there may still be some hope. The news had a significant knock-on impact on Amphion Innovations (AMP), down 77%, or 1.43p, to 0.42p, which is sitting on an 8.5% stake in Motif that has crumbled in value.
The resignation of the boss of technology group Tungsten Corporation (TUNG) received a positive response. The stock jumped 27.3%, or 6p, to 28p as it said it is looking for a replacement for departing Richard Hurwitz.
Former star stock WANdisco (WAND) was back in the limelight. Shares in the software group shot up 38%, or 190p to 690p, after it received advanced technology partner status with Amazon Web Services. It also revealed investors had subscribed for £14m-worth of shares.
NetScientific (NSCI) rose 88.2%, or 3.75p, to 8p after a portfolio company received the first tranche of investment from a Chinese backer.
Accesso Technology Group (ACSO), which has endured a difficult week since announcing the departure of its long-serving chairman Tom Burnet, found some love as buyers emerged for the shares which rose 80p, to 900p.
