TUI AG Reg Shs (DI) (TUI) shares flashed red on Friday morning after the travel operator warned that the grounding of Boeing 737 Max planes earlier this month will take a huge chunk out of its profits. It downgraded its annual forecasts for the second time in as many months and told investors it now expects earnings to be down at least 17% on last year’s £1billion. Boeing 737 Max planes – of which Tui has 15 – were grounded in multiple countries in the wake of the Ethiopian Airlines crash which killed 157 people. Tui said the disruption could cost it as much as £259million in replacement aircraft, higher fuel charges, disruption and the impact on trading if it continues until the end of the peak summer season. If flights of the aircraft resume by July however its costs will be closer to £172million.
‘If there were any justice in the world, the majority of the advisers would be put in prison,’ thundered an impassioned Mike Ashley today as the billionaire tycoon appeared to concede defeat in his battle for Debenhams (DEB). The long-running saga between the struggling department store chain and Ashley’s – its biggest shareholder – came to a head this week after Debenhams snubbed Ashley’s previous takeover advances in favour of a £200million refinancing. On Thursday, the retailer said it had received approval from the majority of its bondholders to press ahead with the restructuring plan, and later on Friday it said the process was completed. Debenhams hopes the plan will secure the future of the chain, which employs 25,000 people. However, it could result in a pre-pack administration, which will wipe out existing shareholders including Ashley who holds a near-30% stake. Chairman Terry Duddy said: ‘We are pleased to have agreed this comprehensive funding package which secures the future of the Debenhams business and provides reassurance for Debenhams’ employees, pension holders, suppliers, lenders and other stakeholders.’
It’s all change at Wickes owner Travis Perkins (TPK) as John Carter, its veteran boss, revealed plan to step down after a 40-year stint at the firm. Carter, who was a director of the building group for 18 years and chief executive for five, will be replaced this summer by Nick Roberts, who is currently boss of engineering firm Atkins. His departure comes at a difficult time for Travis Perkins, which has suffered steep sales declines at its DIY chain Wickes as cautious shoppers cut down spending on major home improvement projects and the housing market slows. Roberts will take up the helm on July 1 but Carter will remain with the group until the end of the year to ensure a ‘smooth handover’. Roberts will join Travis on a base salary of £630,000 per year, with a pension contribution of 10% and an annual bonus of up to 180%.
Broker lights up growth at tobacco firms Imperial brands and rival British American Tobacco. A glowing broker circular from Citi in which it upgraded both Imperial Brands (IMB) and rival British American Tobacco (BATS) to ‘Buy’ status. Analyst Adam Spielman and his team reckon the regulatory dark clouds over the sector are starting to dissipate, as are worries over the debt these groups carry. More to the point, Citi is bullish on the prospects for ‘next generation products’, or NGPs. That’s vape and tobacco heating products to you and me. ‘The shares could still rise a long way because we think the environment will continue to look less threatening,’ the American bank told its clients. ‘We expect organic growth will pick up this year as NGP sales accelerate and we think the regulatory threat will probably move away from cigarettes.’
It wasn’t the best of starts for Ferro-Alloy Resources Limited (FAR), Kazakhstan-focused vanadium producer, which made its London Stock Exchange debut yesterday. Shares were placed at 70p each with investors, helping to raise £5.2million of new funds. They ended the day at 56.5p.
Music download platform 7digital (7DIG) hit the right note with investors, rising 12.2%, or 0.12p, to 1.15p after inking partnership agreements with connected device firm Access and copyright technology group Dubset.
Leak-detection firm Water Intelligence (WATR) surged up 14p, to 295p after it ‘re-acquired’ its franchise in Orlando, Florida – an area it is targeting for accelerated business growth.
Investors in Diurnal Group (DNL) caught a break yesterday after the pharma firm signed a marketing and distribution deal for its Alkindi treatment covering the Nordics. Shares in the firm, which specialises in hormonal diseases, were £2 each last March but had dropped to a low of 21.5p by January. They rose 2.1%, or 0.5p, to 24p yesterday as the tie-up with Sweden’s Anthrop Pharmaceuticals will allow it to sell the children’s treatment in Iceland, Norway, Denmark, Sweden and Finland.
RBS targeted over pensions as boss is handed contributions of £350,000 a year – equal to 35% of his £1m salary. The boss of taxpayer-owned Royal Bank of Scotland Group (RBS) has been attacked by shareholders over his lucrative pension deal. Ross McEwan gets a pension of £350,000 a year, equal to 35% of his £1million base salary, while ordinary staff must typically make do with 10%. The payments contradict Investment Association guidelines which say bosses should get contributions of less than 25%. Now small investor group Sharesoc has hit out at the lucrative deal and demanded cuts to McEwan’s payments. It also revealed that RBS – which is 62.4%-owned by taxpayers following a £46billion rescue in 2008 – hands pension payments of just 10% to new finance director Katie Murray.
Ocado Group (OCDO) boss Tim Steiner has been handed £1.5m worth of shares. Steiner, 49, was awarded 214,942 shares as part of the company’s long-term incentive plan. He sold 101,266 of these at 1287p each for tax and national insurance purposes, totalling £1.3million. The remainder have been transferred to Steiner, which at last night’s prices were worth just over £1.5million. It comes just days after Ocado bagged its latest overseas deal with Australian grocer giant Coles.
