The former boss of Stobart Group, Andrew Tinkler, is preparing a bid for the separate troubled lorry firm Eddie Stobart Logistics (ESL). Tinkler, 56, has joined private equity firm Dbay in expressing an interest for the haulage firm, which is floundering in the wake of accounting errors. He has met City investors to seek backing for a bid, but is not thought to have secured substantial funding. A cut-price sale of Eddie Stobart would be a blow for under-fire fund manager Neil Woodford, the largest shareholder with a 23% stake.
Boris Johnson’s Government faces a crucial test of its attitude towards foreign takeovers following a dramatic intervention in the £4billion battle for British defence firm Cobham (COB). Business Secretary Andrea Leadsom yesterday ordered an investigation into the deal, to determine whether it poses a threat to national security. If the Government decides it does, it has the power to block the sale to US private equity group Advent International. When Theresa May became prime minister three years ago, she said protecting British companies from foreign predators was one of her ambitions. However, no deal has ever been blocked on national security grounds by the Government.
Shares in Sirius Minerals (SXX) fell another 5% yesterday as plans to dig a giant potash mine under the North York Moors hang by a thread. The sell-off began on Monday and accelerated on Tuesday when it said it was struggling to raise enough money to keep the project afloat. Following the Government’s refusal to risk taxpayers’ money to guarantee loans of up to £804million, the future of the Woodsmith mine is looking even more precarious. Around 85,000 retail investors, including many families in villages around the moors, are now facing huge losses. Some have ploughed much of their life savings into the mine in the hope of making a handsome profit while helping to boost the local economy and create jobs.
Pendragon (PDG) is closing nearly two-thirds of its Car Store sites, leaving 300 staff out of a job. The group, which owns a string of brands including Car Store, Evans Halshaw and Stratstone, is closing 22 of its 34 Car Store sites across the country by the end of the year. The group has not revealed the locations of the sites being shut. Pendragon, which has issued a number of profit warnings, said Brexit was hampering consumer confidence and the car market remained ‘challenging.’ A strategic review by the group found 22 of its Car Stores sites were loss-making and unlikely to return to profit, and it said it was now taking ‘immediate action’ through the planned closures. The firm also revealed last month it had continued the sell-off of its US showrooms with the sale of its Chevrolet dealership in Puente Hills, California.
Cenkos Securities (CNKS) has kicked off its board a founding shareholder with close ties to the embattled fund manager Neil Woodford. Paul Hodges, head of the equity capital markets team, will remain on the executive committee but stand down as a board director with immediate effect. Cenkos said that a smaller board would bring it ‘into line with current regulatory and good corporate governance practices’. Brokers have come under increasing pressure in recent years, amid tightening regulation, increased investor uncertainty squeezing trading profits and fewer companies deciding to pursue floats on the stock market. Cenkos has also been pulled under the spotlight for its close ties with Woodford – whose flagship Equity Income fund has been shuttered since June – who has invested in a number of Cenkos clients, such as the AA and Eddie Stobart.
Kingfisher (KGF) has come clean on falling sales and profits just days before outgoing boss Veronique Laury hands over the reins. Profits in the first half of the year tumbled 12.5% to £245million as the firm ploughed ahead with a radical five-year transformation plan – One Kingfisher – which entails overhauling IT and buying systems. Without one-off costs, profits rose 3.7% to £337million. Kingfisher said the ongoing implementation of the plan has led to some disruption at B&Q stores, taking a chunk out of sales and driving some customers to defect to its rivals Homebase and Wickes as B&Q swaps out old ranges and upgrades displays. It added that its performance in the UK was ‘disappointing’ as the enduring Brexit uncertainty chips away at consumer confidence and put the stoppers on the housing market in some areas.
N4 Pharma (N4P) gained ground despite reporting its first-half loss had widened slightly. It is developing new vaccine and cancer treatments which work by sending DNA into cells to stimulate an immune response to fight back. A loss before tax of £552,160 in the six months to June 30 was up from a £526,221 loss in the same period last year. Administration costs rose by more than a third to £433,000, and it made £27,693 from the sale of an investment.
Metro Bank (MTRO) shares fell as much as 6.5% after it said in a company document – specifically, a bond prospectus – that the Financial Conduct Authority (FCA) is probing senior managers for their role in a misreporting scandal that hammered its stock in January. In addition to the FCA widening its investigation, Metro Bank warned it could cost a ‘significant expense’ to resolve investigations into the £900million accounting error. The challenger bank has struggled to rebuild investor confidence after it revealed it had under-reported the risk of its loan book, forcing it to raise £375million from shareholders in May.
Games Workshop Group (GAW) rose 142p, to 4816p on the back of a short but sweet upbeat trading update – and a shareholder protest against its chairman. Almost 27% of investors voted against Nick Donaldson’s re-election. The firm said it was probably down to worries that his time is stretched too thinly, as he is on the board of several other firms, such as Franco Manca owner The Fulham Shore, but added that it has full confidence in him and will talk to disgruntled investors.
Weir Group (WEIR) shed 51.5p, to 1508p after brokers at JP Morgan cut the stock from ‘overweight’ to ‘neutral’ and trimmed its target price from 1650p to 1500p. JP Morgan said it sees challenging times ahead for Weir’s oil and gas division, and that the group will gain only a limited boost from a short-term spike in the oil price.
Yu Group (YU.) slumped 27.5p, to 120p after it booked a deeper first-half loss of £3.3million, more than triple the £895,000 of the year before. Costs soared and it was forced to ‘reset’ in the first six months of the year following the discovery of an accounting error in October which cost it £10million.
Warpaint London (W7L) fell 1p, to 50.5p after revealing a half-year loss of £210,000 – down from pre-tax profit of £1.3million the year before – as its expenses rose. Sales increased 2.9% to £18.9million between January and June, but it has warned that the High Street slowdown and Brexit anxiety mean that trading conditions are still challenging.
Pan African Resources (PAF) swung back into profit in the year to June and has restarted its dividend payments at 0.13p per share. Helped by a surge in the price of gold ,which has rallied on the back of US-China trade tensions and worries that another global recession is on the way, revenue jumped 49% to £174million. It posted a pre-tax profit of £30million, compared with a loss of £99million last year.
