 | Stagecoach Group (SGC) investors buoyed by UK rail performance. Transport group put its US bus business up for sale in ‘competitive’ market |
 | Decision to drop Royal Bank of Scotland Group (RBS) probe faces legal challenge. Ex-head of business taken over by bank’s GRG unit seeks judicial review |
 | Aviva (AV.) to break the ‘loyalty penalty’ for home and car insurance. New product will be priced regardless of how long customer has been with the company |
  | , William Hill (WMH), GVC Holdings (GVC) – Betting adverts could be banned during live sports broadcasts as early as this month. The move follows political pressure about the amount of betting advertising on television, with more than 90 minutes of adverts shown during the World Cup. The Remote Gambling Association, which includes Bet365, Ladbrokes and Paddy Power among others, has struck a deal to agree a ‘whistle-to-whistle’ TV advertising ban. The deal is said to ensure no adverts will be broadcast for a defined period before and after a game is broadcast. It will include any game that starts prior to the 9pm watershed but ends after that time. Anti-gambling campaigners say sport’s use of adverts ‘normalises’ betting and the RGA has previously said it was ‘very mindful of public concerns’. |
 | Tesco (TSCO) – Two ex-Tesco directors have been cleared of fraud and false accounting after profits were overstated by £250million as the case against them dramatically collapsed. The retailer’s shares saw £2billion wiped off the value when it said in 2014 that it had overstated profits the previous month, amid claims it had been ‘cooking the books’. A jury at Southwark Crown Court in London were told this morning that Chris Bush, 52, and John Scouler, 50, had been acquitted at the Court of Appeal yesterday. It is a major embarrassment for the Serious Fraud Office, which is thought to have spent more than £10million on its investigation and legal fees over two trials. Bush admitted today that he was ‘delighted that my innocence has finally been established’ – but added that it was ‘troubling’ how they were ever charged. |
 | Specialist London-based insurance group Beazley (BEZ) has revealed that the recent wildfires in California will cost the firm around £35.1million ($40million) in claims. The payouts from reinsurance hit the group’s finances after fires damaged several settlements and killed dozens of people in the US’s most populous state. In the two sentence update, the group also said: ‘Investment markets continue to be volatile and our year to date investment return to 30 November 2018 is 0.5%.’ |
 | BT removing kit made by Chinese firm Huawei from its network amid fears of spying. The move comes after the governments of the US, New Zealand and Australia blocked the use of Huawei’s equipment completely in next generation 5G mobile networks. Earlier this week, the head of MI6 suggested the UK needed to decide if it was comfortable using technology owned by the Chinese. Critics have suggested that laws in China could force Huawei to hand over data or spy on other countries if it was instructed to do so. BT Group (BT.A) confirmed it was in the process of removing Huawei kit from the most sensitive parts of its mobile network. |
 | Patisserie Valerie appoints interim finance boss as it tries to steady the ship following accounting scandal. Nick Perrin, former finance head at veterinary group CVS, will take up the role while the board searches for a permanent replacement for predecessor Chris Marsh. Mr Marsh was arrested on suspicion of fraud following the discovery of a £40million black hole in Patisserie Valerie’s accounts in October, but was later released on bail. Chief executive Paul May resigned in November and was succeeded by Stephen Francis, who was chief executive of pork farmer Tulip. In a statement on Perrin’s appointment, Mr Francis said: ‘I am pleased to welcome Nick to Patisserie Holdings (CAKE). ‘He brings with him the necessary experience to help strengthen the team as the Company works tirelessly to put the events of the past months behind it and look forward to the future.’ |
 | Chairman of beleaguered Thomas Cook Group (TCG) snapped up 373,000 shares for under 21.5p each – a day before price soared 50%. In a vote of confidence for the travel firm, Frank Meysman, 66, forked out £80,441 on Tuesday, having seen the share price fall more than 50% last week following a profit warning. And yesterday the stock jumped 51.4%, or 11.68p, to 34.4p, valuing the purchase at £128,312. Non-executive director Lesley Knox also bought shares on the cheap at the same time, purchasing 208,778 shares at 22.6p each, or nearly £47,200. But despite the rally, fears persist over Thomas Cook’s debt pile, which has ballooned from £40m to £389m in 12 months. |
 | Ted Baker (TED) board branded ‘weak’ as chairman insists investigation into harassment complaints against its chief executive would be ‘impartial’. A leading investor raised doubts about the ability of directors to stand up to Ray Kelvin – but also warned that the company would be rudderless without him. With pressure mounting on bosses, the fashion chain will today unveil full details of the probe into Kelvin’s behaviour alongside a trading update which is expected to see it post disappointing sales. |
 | Joules lifts the lid on contingency plans for ‘no-deal’ Brexit as the British fashion brand ups its profit forecast. British fashion brand Joules Group (JOUL) said today it is setting up a new EU distribution hub and ordering products early as part of contingency plans for a potential hard Brexit. The group – a favourite of Kate Middleton’s – also said it is ramping up its currency hedging to help protect it against volatility in the pound as Brexit day approaches. Joules unveiled its Brexit contingency plans alongside strong half-year results. Sales jumped by 17.6% to £113.1million, defying the wider gloom on the UK High Street. |
 | Thousands of Ryanair customer compensation claims to go to court after airline refused to pay out when strikes ruined their holidays because of flight delays and cancellations. Ryanair Holdings (RYA) is today facing legal action over its ‘appalling’ treatment of passengers who were refused compensation over flight disruption caused by striking staff. Ryanair claimed the industrial action falls under ‘extraordinary circumstances’ and refused to pay out to customers. But the Civil Aviation Authority (CAA) disagreed and said compensation should be granted under EU law, and has now launched enforcement action. The news comes as a shot in the arm to some 100,000 beleaguered customers who were left stranded at airports over the summer after their flights were delayed or cancelled. |
| Shares in Stagecoach Group (SGC) have motored higher after the transport firm revealed its struggling US arm is on the block. Stagecoach, which has been testing self-driving buses between Edinburgh and Fife, is in discussions to sell all or part of the US division, including the American branch of bus operator Megabus. Investors welcomed the change in strategy, despite Stagecoach’s £22.6m loss in the six months to October compared to a £96.7m profit a year earlier. |
      | Housebuilders and banks also boosted the market as investors hoped greater parliamentary control over the Brexit process would lead to a softer withdrawal from the EU. Theresa May suffered a defeat in the House of Commons on Tuesday, which means MPs can prevent a no-deal Brexit. Many traders think a less dramatic withdrawal from the EU will be better for the UK economy – and therefore better for the companies that depend on it, such as British housebuilders and banks. On the FTSE 100, Persimmon (PSN) shot up 131.5p, to 1995.5p, Berkeley Group Holdings (The) (BKG) by 193p, to 3423p, Barratt Developments (BDEV) by 23p, to 473.8p, and Taylor Wimpey (TW.) by 5.6p, to 137p. Among mid-sized housebuilders, Redrow (RDW) leapt by 28.4p, to 496.2p and Bellway (BWY) by 143p, to 2645p. |
 | Construction equipment hire company Ashtead Group (AHT) was the biggest loser, dropping 103.5p, to 1672.5p, amid fears of a slowdown in the US economy. Laith Khalaf at Hargreaves Lansdown said: ‘We wouldn’t bet the house on gains being sustained. There’s still a wide range of outcomes from the parliamentary process, and more twists and turns in the tale before we have a definitive direction for Brexit.’ He said the stock market is still split into Brexit beauties – companies which make chunks of their money abroad – and beasts – such as banks and builders who are plugged into the UK economy. |
 | Car supermarket Motorpoint Group (MOTR) was driven higher by Numis. The broker recognised the motor retail sector had been heavily sold off due to Brexit fears and new emissions test rules, but said Motorpoint’s growth potential and the amount of cash it was generating warranted a positive outlook. |
 | Faron Pharmaceuticals Oy (DI) (FARN), which tanked in October after it said its treatment for acute respiratory distress syndrome wasn’t as effective as hoped, is fighting back, up 22.2%, or 14p, to 77p as it said the treatment worked well for patients with a certain genetic mutation. |
| Two former Tesco directors have been cleared of fraud in relation to the supermarket’s £263m accounting scandal after a judge ruled there was insufficient evidence, in what is being seen as a “significant defeat” for the Serious Fraud Office. Chris Bush, ex-UK managing director, and John Scouler, the then UK food commercial director, were accused of being aware that income was being wrongly included in the company’s financial records to meet targets and make Tesco (TSCO) look financially healthier than it was. When Tesco unveiled that it had overstated profits by £250m in October 2014 its shares plummeted by nearly 12%, wiping £2bn off its market value. The SFO began investigating the following month, brought charges against a trio of directors in September 2016 and a trial commenced the following year. |
 | Packaging giant Smith (DS) (SMDS) has denied plans to sell its plastics division are a response to growing controversy around the material’s environmental impact as it unveiled another set of bumper profits. Excluding the plastics business, pre-tax profits rocketed 27% to £162m in the six months to October as new acquisitions and higher prices spurred 15% growth in revenues to £3.1bn. Miles Roberts, chief executive, refuted suggestions the sell-off was a reaction to the recent backlash against plastic, insisting the division, which makes crates, foam construction blocks and bag-in-a-box packaging, was a “very nice business”. He said: “The underlying demand is very strong, the business continues to grow and is profitable. It is quite a big market, we’re a good player but we see better opportunity for us to invest in our core business of corrugated boxes.” |
| Thomas Cook Group (TCG) ‘fundamentals remain robust’, says fund management titan. Thomas Cook’s biggest shareholder has come out fighting for the 177-year-old travel giant, blasting a stock market sell-off as an “overreaction”. As fears grow over the company’s future, Invesco insisted Thomas Cook’s “fundamentals remain robust”. Almost 60% was wiped off the company’s market value in eight days after Thomas Cook last week announced its second profit warning in two months, suspended its dividends and revealed it had opened talks with its lenders in the wake of a burgeoning debt pile. But Invesco global equities fund manager Stephen Anness said: “Much of what we heard from Thomas Cook last week was a repeat from what we already knew – that trading suffered from the exceptionally hot summer. That was exaggerated by the unexpected change to accounting, a change we very much approve of as it more clearly reflects the underlying business.” |
 | Takeda and Shire Plc (SHP) shareholders approve £46bn pharmaceutical mega-merger. The £46bn merger between Shire and Takeda has won approval from shareholders, paving the way for the deal to be completed as early as January and creating one of the biggest pharmaceutical companies in the world. More than 88% of shareholders in Japanese company Takeda voted in favour of the acquisition, defying speculation that investors would reject the controversial deal. Anglo-Irish Shire, meanwhile, received the backing of more than 99% of its shareholders. The deal will be the largest ever foreign takeover by a Japanese firm and will rank among the 10 biggest acquisitions ever in the pharmaceutical sector. The tie-up will create a drugs powerhouse with close to £22bn of annual sales, roughly equivalent in size to AstraZeneca. |
| Stagecoach puts struggling US arm on the market. Stagecoach Group (SGC) insists it will not sell its troubled US coach arm “at any cost” despite swinging sharply into the red following a hefty writedown on operations across the Atlantic. The bus and rail giant announced on Wednesday that it had opened sale talks with a number of parties over the sale of all or part of its North America network. The announcement came as the company posted a £22.6m half-year pre-tax loss, principally driven by a painful £85.4m writedown of its US investment. Stagecoach also shouldered a £24.2m cost to equalise minimum pension benefits between men and women. Shares rose around 13% and the company’s valuation briefly broke through the £1bn barrier as profit margins on Stagecoach’s UK rail arm beat City expectations. |
| Joules sales rise as fashion brand braces for Brexit. Fashion brand Joules Group (JOUL), known for its brightly coloured designs, has taken early deliveries of its spring and summer ranges and set up a European warehouse as it braces for a no-deal Brexit. The company said that it was also preparing for increased paperwork that could result from stricter customs checks and had hedged its US currency requirements for the next year “to mitigate the expected disruption that could arise in the event of a hard Brexit”. Joules joins the growing list of British companies, including drugs firm AstraZeneca and drinks merchant Majestic Wine, that are scrambling to stockpile products and looking for alternative routes in fear that the ports at Dover will be thrown into chaos from increased checks. |
| Ryanair sued by airline watchdog over failure to pay strike compensation. Ryanair Holdings (RYA) faces a “watershed” legal bid by airline industry watchdogs to force the low-cost carrier to pay compensation to customers affected by a wave of strike action over summer. The Irish airline is refusing to reimburse passengers, claiming the industrial action across the continent amounted to “extraordinary circumstances” and that compensation laws do not apply. In April the European Court of Justice ruled that “wildcat strikes” by flight staff do not fall within the scope of “extraordinary circumstances”, which usually relates to bad weather or air traffic controller disruption. Ryanair was hit by unprecedented levels of industrial action this summer as pilots and cabin crew launched concerted action. This came after the industry suffered from continued air traffic controller capacity shortages. Coupled with rising fuel prices, the airline admitted in October that profits have been hurt as result. And strike action has also negatively impacted passenger confidence, with fewer forward bookings made over the school half-term and Christmas periods. |
| Patisserie Valerie hires finance chief to help steady the ship. Scandal-hit cake and coffee chain Patisserie Valerie has secured the services of a new finance chief after a hiatus of almost two months. Nick Perrin, the former finance director Aim-quoted veterinary company CVS, has been picked on an interim basis by parent company Patisserie Holdings (CAKE). He fills the void left by Chris Marsh, who was suspended on Oct 10 and resigned later in the month. Mr Marsh was interviewed by police as part of an ongoing fraud investigation. Led by serial entrepreneur Luke Johnson, Patisserie Valerie was plunged into crisis two months ago after revealing “significant, and potentially fraudulent, accounting irregularities”. A £40m black hole in its books was later unearthed. |
 | Takeover target Faroe Petroleum clinches Norwegian oil deal. Faroe Petroleum (FPM) has clinched a deal to boost its oil production in the Norwegian North Sea while battling a hostile takeover bid from its largest shareholder. Faroe told shareholders that the asset swap arrangement with Norwegian major Equinor, formerly known as Statoil, would raise its oil production by between 7,000-8,000 barrels of oil a day from next year. The Aberdeen-based producer said the output boost could allow it to return cash to shareholders and push through a sustainable dividend policy. |
 | City adviser Numis knocked by hiring spree despite riding wave of M&A. Profits at City broker Numis Corporation (NUM) plunged 17% for the year to September as a hiring spree meant it failed to cash in on a rise in M&A activity. The company, whose clients include Aston Martin and Asos, said that extra hiring costs and “a year of investment” meant profits fell to £31.6m, despite advisory fees shooting up 21% due to a boom in takeovers. The business has traditionally won work on listings but in recent years has refocused its efforts on M&A, which generates lucrative fees and is an area previously dominated by big banks or specialist boutiques. |
 | Questor – International Biotech Trust (IBT): biotech drugs are fundamentally different from traditional ones and this can make them a better investment. Buy |
| Bookmakers agree to stop advertising during live sports on TV. Some of Britain’s biggest bookmakers are poised to agree a voluntary ban on advertising during live sports broadcasts following growing concerns over their impact on children. The Remote Gambling Association (RGA), which includes Bet365, GVC Holdings (GVC) which own Ladbrokes, William Hill (WMH) and among its members, is understood to have agreed the outline of a collective move to stop advertising during live sports on TV. Although a formal deal has yet to be signed off the mooted “whistle-to-whistle” ban is a response to growing concerns that the weight of advertising on TV is “normalising” betting, contributing to problem gambling and fuelling under-age gambling. The proposal is similar to one put forward by the Labour Party and Tom Watson, the party’s deputy leader, said he was delighted at the news. “With over 430,000 problem gamblers in the country, many of them children, the number of adverts during live sports had clearly reached crisis levels,” he said. |
| Thomas Cook flies thanks to sharp change in outlook. Investors sprang to the defence of Thomas Cook Group (TCG) yesterday, sending its shares up by 51% as the travel operator shrugged off concerns about its debts. Invesco, the fund manager that owns 15.2% of Thomas Cook, dismissed the sharp fall in the company’s share price since a profit warning last week as an “overreaction”. The shares were given further votes of confidence by Frank Meysman, the company’s chairman, who bought £80,400 of shares, and by a string of stockbrokers, which issued positive research notes. The turnaround in sentiment comes after a torrid week in which the company’s second profit warning in two months sent the stock tumbling from 48½p to 22¾p over six days of trading. |
| Exodus? What exodus? City offices in demand. Remember the scare stories? Many bankers, politicians and analysts predicted that Brexit would prompt an exodus of financial services jobs and businesses, weakening the City’s dominance as a global financial centre. Yet with less than four months to go before Britain is set to leave the EU, banks and financial services companies are looking for more new office space in the City than at any time since 2015, according to JLL, the property services company. The sector is actively looking for a combined 2.4 million sq ft of office space, 37% of total demand and higher than any other sector. Many of those requirements are driven by lease expiries, but some represent an expansion. | |
 | Capita invites its workers to join board for £65,000 a year. Capita (CPI) has invited 70,000 employees to apply to join its board as non-executive directors, becoming the first FTSE company since the 1980s to appoint workers to its board. The two successful employees, who must have worked for Capita for at least two years, will be paid an additional £64,500 on top of their existing salary. They will take on full boardroom non-executive duties as well as keeping their day job. The appointment of worker-directors on big companies was one of the key ideas of Theresa May when she became prime minister in 2016. However, after a cool reception from the business community — which had not been consulted before the announcement on the steps of Downing Street — Mrs May has quietly dropped the initiative. Capita’s plan is the work of Jon Lewis, who was appointed chief executive of 12 months ago. He hopes for applications to come in “from Colwyn Bay to Cape Town”. |
| Ted Baker boss alleged to have pushed worker in wedding row. The founder of Ted Baker (TED) allegedly pushed an employee against a wall in a row because he was not invited to the staff member’s wedding. Ray Kelvin is then alleged to have reached a compromise agreement and to have paid a sum of money to the employee when he subsequently left the business after the bust-up. It is the latest allegation to be made against the entrepreneur, who has been accused in a petition by staff of “forced hugging”, making “sexual innuendos” and “stroking people’s necks”. |
| Shareholders snub Takeda family to back £46bn Shire deal. One of the biggest global pharmaceuticals mergers and acquisitions to date is set to complete next month after Takeda shareholders backed the £46 billion takeover of Shire Plc (SHP). In a general meeting in Osaka, at least 88% of voting shareholders backed the Japanese drugs company issuing new shares as part of the deal, despite opposition from some members of the founding family. The vote paves the way for Takeda to finance what will be the largest overseas takeover by a Japanese company. A group of rebel shareholders, led by members of the Takeda family, including a former chairman, had come out publicly against the deal. They had said that the cash-and-shares buyout was too risky for Takeda and that the company could expand by developing its own drugs pipeline. |
| Stagecoach considers selling US business. Stagecoach Group (SGC) has been driven into the red after writing down the value of its struggling US business amid discussions about selling its American operations. Stagecoach first moved into the American market with the $1.8 billion takeover of Coach USA in 1999. Within three years, however, the company found that it had vastly overpaid for the business, took a $550 million writedown and dismantled large parts of it. That prompted a spectacular crash in Stagecoach’s stock price to a penny share and did for its chief executive, Keith Cochrane, who left but re-emerged 15 years later at the centre of the Carillion collapse. |
 | Commodities giants accused of bribery. Three of the world’s biggest commodities traders have been accused of paying bribes to Brazil’s national oil company. Brazilian prosecutors have alleged that trading companies including Glencore (GLEN), Vitol and Trafigura paid more than $30 million to employees of Petrobras in order to obtain “more advantageous prices and sign contracts more frequently”. They alleged that senior executives at the international companies had “total and unequivocal” knowledge of the scheme and that the details being made public were the “tip of the iceberg”. Brazil has been gripped by a corruption scandal that began in 2014 with allegations that Petrobras executives had accepted bribes and defrauded the company. |
 | Debenhams passes its own stress tests. Debenhams (DEB) has conducted various stress tests that show it will operate as normal and meet its debts within the next three years. The struggling department stores chain published a “viability statement” in its annual report, in which it assessed the long-term viability of the company over a three-year period to August 28, 2021. It said that it had selected the three-year span because it covered a period where the retail industry would have to adapt to significant change and uncertainty after Brexit. Debenhams said that in the wake of the assessment, the “board is in agreement that Debenhams is a viable business” and that the directors have considered the resilience of the retailer by taking into account its “current position and historical financial performance, the principal risks facing the business in severe but theoretical scenarios, and the effectiveness of any mitigating actions”. |
| Patisserie Valerie turns to temporary finance chief. An interim finance boss has been parachuted into the company behind Patisserie Valerie after the resignation of Chris Marsh in October amid the discovery of “significant and potentially fraudulent accounting irregularities”. Patisserie Holdings (CAKE) said that Nick Perrin, until recently finance director of CVS, the veterinary group, had been appointed as interim chief financial officer pending the appointment of a permanent replacement. He will not join the board. Mr Perrin, 58, who spent almost six years at CVS, also has held finance director roles at Genting Casinos UK and the Co-operative Group’s specialist retail division. He trained and spent 13 years with PWC and has a degree in economics and social studies from Manchester University. |
| Faroe Petroleum plans asset swap to lift production. Equinor and Faroe Petroleum (FPM) have agreed a deal to swap stakes in several Norwegian North Sea oil and gasfields, adding up to 8,000 barrels per day of production for Faroe but provoking thinly disguised scepticism from its would-be buyer. DNO, the Norwegian oil company that is Faroe’s biggest shareholder, launched a hostile £600 million takeover bid for the Aberdeen-based producer last month. Yesterday it said that it would take time to assess the merits of the transaction, but questioned if Faroe was making the right call. “We need to ask if this is good value for a company seeking growth,” DNO said. |
 | Kraken delays apply brake to EnQuest (ENQ) in North Sea. Technical problems and drilling delays at Enquest’s principal North Sea site are likely to result in the company’s oil and gas production growing by less than expected next year. Enquest said yesterday that the Kraken field, which started up in June 2017, continued to be affected by “a small number of system outages and equipment repairs”, while a drilling rig for a new well at the project also had been delayed. The company said that it was making “conservative assumptions” and that it expected to produce between 30,000 and 35,000 barrels per day from Kraken in 2019, less than analysts had expected. Despite the setback, Enquest said that it expected total production to grow to between 63,000 and 70,000 barrels of oil per day in 2019, up 20% on the 54,000 to 56,000 barrels per day expected this year, thanks to its acquisition of Magnus, Britain’s most northerly oilfield, from BP. |
| Joules jolts City with strong half. After a big fall in its share price this year, the City was probably nervous, yet Joules Group (JOUL) cheered the market with a better first half than expected. The clothing and footwear retailer said yesterday that its revenues had risen 17.6% to £113.1 million in the 26 weeks to November 25. Retail sales were up 21.2% driven by online, which accounts for nearly 50% of all retail sales. Joules expects its underlying pre-tax profit to be slightly ahead of expectations. |
 | There are plenty of people suggesting that the roof will fall in after a disorderly Brexit, but yesterday talk of a deal being agreed between Westminster and Brussels was enough to give housebuilders’ shares a much-needed boost. A no-deal Brexit may well hurt the sector as it would dampen consumer confidence, push sterling lower and increase labour and building costs. The Bank of England has warned that house prices could fall by 30% in the event of this hardest of Brexits. Yet analysts at Barclays said they thought that the recent share price weakness of the big builders had already been factored in with a house price fall of about 8% and a drop of about 30% in transactions. They expect a surge in shares if a deal is agreed. Analysts at JP Morgan increased their probability of “no Brexit” at all from 20% to 40% and decreased their expectation of a “no-deal” Brexit from 20% to 10%. This lead to a jump in shares of larger and midcap housebuilders. Persimmon (PSN) led the way in the FTSE 100, closing 131½p, or 7%, up at £19.95½. Berkeley Group Holdings (The) (BKG) rose 193p, or 6%, to £34.23, Barratt Developments (BDEV) added 23p to 473¾p and Taylor Wimpey (TW.) put on another 5½p to 137p. In the FTSE 250, Bellway (BWY) rose 143p to £26.45, Crest Nicholson Holdings (CRST) added 12p to 337p, closed 31½p stronger at 880p and Redrow (RDW) ended 28½p higher at 496¼p. Traders said there were signs that hedge funds were covering short positions before the vote next week, which helped to push builders’ shares higher. |
 | GlaxoSmithKline (GSK) fell 52¼p to £14.59 after Barclays downgraded its rating to “equal weight” in response to the $5.1 billion acquisition of Tesaro, an American cancer drug specialist. Further pressure was added to the stock after Moody’s changed its outlook for the company to “negative” from “stable” on the back of the deal. |
 | NewRiver REIT (NRR), the FTSE 250 property investment company generally best known as a shopping centre operator, is understood to have agreed terms on the purchase of a package of about 76 tenanted pubs from Heineken in a deal worth an estimated £12 million. Its brings New River’s total pub estate to about 630. None of the parties would comment. Shares in New River Reit closed up ½p at 224½p. |
 | An Aim-quoted biotechnology company backed by Neil Woodford has agreed an all-share merger with an American rival. Mereo Biopharma Group (MPH) and the California-based Oncomed Pharmaceuticals said that the tie-up to create a $230 million company was backed by the boards of both companies. The combined group would have seven assets in its portfolio at the clinical trial stage and a cash position of $115.5 million. Mereo shareholders are set to own about three quarters of the merged business. The combined group will have a dual listing in Britain and America. Shares in Mereo closed up 6p at 196p. Oncomed shares in New York have more than halved since October. |
 | Tempus – Hiscox Limited (DI) (HSX): Hold long term. Efficient and well-run, with attractive and solid long-term growth opportunities |
 | Tempus – Monks Inv Trust (MNKS): Buy long term. Diversified portfolio well placed to perform long term |
| Shareholders give Takeda’s £46bn Shire Plc (SHP) deal green light. Takeda chief Christophe Weber clinched Japan’s largest overseas takeover on Wednesday as shareholders approved the controversial $59 billion (£46 billion) swoop on UK drugmaker Shire. The Frenchman, a former rising star at GSK, said the debt-fuelled deal would create a “more competitive, agile, highly profitable, and therefore resilient company”. Around 12% of shareholders at a general meeting in Osaka voted against the proposal, which will make Takeda among the top 10 biggest drugmakers globally. Shire shareholders were also set to approve the deal at a vote today. The takeover has come under fire from some Takeda shareholders and relatives of Takeda’s founding family over the high debt levels. |
| Stagecoach Group (SGC) tries to hitch a ride out of American bus division. Stagecoach is looking to sell its north American buses business as it took an £85 million balance sheet hit on Wednesday due to bleaker growth prospects in the division. The buses and rail operator, which also owns about half of Virgin Trains in the UK, said it was in discussion about a potential sale of the unit, which operates across 30 states through the Coach USA and Coach Canada brands. The “strategic review” will examine a full or partial sale of the division, it said. Management took a non-cash impairment charge of £85.4 million based on future cashflow forecasts in America due to more intense competition there. The company, which has faced issues growing the Megabus brand in the US, was forced to revise long-term assumptions on growth rates after trading fell below its internal budget. |
| BT Group (BT.A) closes is on sale of historic central London HQ. BT is close to completing the sale of its historic central London HQ for around £220 million, the Evening Standard understands. The struggling telecoms firm appointed agents Cushman & Wakefield to handle the sale of the Newgate Street base next to St Paul’s Cathedral in the summer as part of plans to save £1.5 billion. The current headquarters stands on the site where Guglielmo Marconi made the first public transmission of wireless signals in 1896. The move will end BT’s association with the site stretching back more than a century. Market sources said the strong sale price — rumoured to be to a private Hong Kong buyer — reflected the scarcity of sizeable development sites in the City. |
| Ted Baker (TED) feels ‘hug-gate’ squeeze as brokers divide. The City was split over Ted Baker’s prospects on Wednesday after “hug-gate” caused the fashion brand’s value to fall by £198 million in three days. Analysts at HSBC downgraded the stock to Hold from Buy saying “uncertainty over leadership distracts from the core investment case” and there was “limited visibility as to when this will be resolved”. This means that instead of seven Buys and one Hold it now has six Buys and two Holds. No one yet rates it a Sell. Founder and chief executive Ray Kelvin has been accused of inappropriate behaviour to staff and there are fears he might have to step down. Ted Baker has commissioned an external investigation. |
| Patisserie Holdings (CAKE) – The crisis-stricken cake chain has drafted in a little-known finance chief a month after its predecessor resigned as the firm nearly went bust. Nick Perrin, the ex-finance director at veterinary specialist CVS, will be interim CFO. The company found a £40 million black hole in its accounts in October. Perrin will “help strengthen the team”, the firm said. He doesn’t have a seat on the Board. Shares are still suspended. |
 | Taptica International (DI) (TAP) has also updated on its situation after its shares tumbled yesterday. This is a long story this one but investors should know the ins and outs. Yesterday it was announced chief executive Hagai Tal was stepping down after he was found liable yesterday for certain statements made in relation to the sale of Plimus in 2011 to private equity, where he was chief executive and a shareholder. Plimus was separate to Taptica which he set-up in 2014. Taptica has appointed Rivi Bloch as interim chief executive and its shares rose 6p at 197p. |
| finnCap (FCAP) – The stockbroker raised £3.8 million of new money for the company, with selling shareholders receiving another £1.3 million. After pricing its IPO at 28.00 pence per share, FinnCap was admitted to trading with 168.2 million shares in issue and a market capitalisation of £47.1 million. FinnCap was trading up 5.4% at 29.50p per share. In mid-November, FinnCap announced its intention to float in London, as part of its agreement to acquire Cavendish Corporate Finance, an independent mergers & acquisition adviser to the UK mid-market. The £3.8 million raised in the IPO will partially fund the acquisition. | |
| The country casual fashion brand Joules Group (JOUL) today joined a growing number of businesses laying down concrete plans to cope with Brexit. Chief executive Colin Porter said: “Our biggest concern is consumer sentiment in unsettled times.” “We want to control what we can control and avoid the risk that we can foresee,” added finance chief Marc Dench. It will open a warehouse on the Continent, order some of its clothes and shoes sooner and try to keep a lid on currency costs. Underlying profits for the first half to November 25 will be higher than the £10.3 million analysts expected. Revenues leapt 17.6% to £113 million. |
| Ryanair Holdings (RYA) faces legal action over refusal to compensate cancelled flights. Passenger flights grounded by strikes must be repaid under EU law, warns Civil Aviation Authority. The UK’s Civil Aviation Authority is taking legal action against Ryanair over the airline’s refusal to compensate thousands of UK customers affected by flight disruption over the summer. Ryanair was hit by its worst ever strikes in the summer, as walkouts by pilots and cabin crew over pay and conditions forced it to cancel flights, including to major holiday destinations such as Spain, Italy and Portugal. Passengers have made claims for compensation to the airline, but these have been rejected by Ryanair on the grounds that the disruption arose from “exceptional circumstances” and therefore exempt. However, the CAA says passengers are entitled to compensation under EU law. |
| Brazilian Car Wash scandal draws in Glencore (GLEN) and Trafigura. Commodity giants under investigation as police move focus to Petrobas fuel-trading deals. Oil deals by the commodity trading giants Glencore, Vitol and Trafigura are under investigation as part of the Car Wash investigation, the vast corruption scandal that has rocked the Brazilian establishment. Federal police in Brazil said they had been examining alleged bribery involving Petrobras, the huge national oil company that has been at the centre of the Car Wash affair. |
 | Barclays (BARC) customers in switch threat over tar sands investment. Up to 30,000 account holders sign petition against pipeline projects in US and Canada. Thousands of Barclays customers have threatened to switch to another bank unless it promises not to invest in pipelines for oil from tar sands, dubbed the “dirtiest fuel on the planet”. Greenpeace, which occupied a branch of Barclays on Wednesday morning and erected signs branding it “The Dirty Bank”, said 30,000 customers signed a petition calling on the lender to pledge never to fund controversial tar sands projects. Of those who signed the petition, 6,000 told the environmental group that they were ready to close their accounts if Barclays did not heed their warning, while some said they had already done so. “Moving your bank account is quite a big undertaking, so we were genuinely surprised when people started doing it without us even suggesting it,” said the Greenpeace oil campaigner Hannah Martin. “This new information shows that the opposition to Barclays funding dirty tar sands projects isn’t just broad but deep. “People are prepared to put themselves through a bit of bureaucratic hassle to try to persuade their bank to do the right thing.” |
| Clothing brand Joules Group (JOUL) stocks up in case of no-deal Brexit. UK firm brings forward spring-summer orders and rents warehouse in mainland Europe. The British clothing brand Joules is stocking up early on next year’s spring and summer ranges and has rented an EU warehouse in preparation for a no-deal Brexit. The company said it was bringing forward its product orders for its spring and summer 2019 ranges, including its classic striped Breton Harbour tops, hand-drawn printed scarves and light coats and jackets. This is to ensure its deliveries will not be held up by delays at the ports if the UK crashes out of the EU without an agreement in March. |
 | Lex – IG Group Holdings (IGG)/spread betting: attuning to turbos. A regulatory clampdown should not obscure opportunities for growth |
| BT Group (BT.A) loses case over switch to cheaper pension index. Telecoms group had wanted to change inflation measure for calculating payouts |
 | Travis Perkins (TPK) narrows focus to professional builders. Builders’ merchant to keep Wickes DIY brand but review medium-term options for unit |
| Sorrell’s S4 Capital (SFOR) to buy MightyHive for $150m. US deal marks second acquisition for veteran adman since leaving WPP | |
| IG Group Holdings (IGG) warns of falling revenues and fewer punters. Number of new customers expected to drop by a fifth in first half |
| Patisserie Valerie’s parent company has hired a former boss of a veterinary firm as its new interim chief financial officer. Nick Perrin, former finance head at veterinary group CVS, will take up the role while the board searches for a permanent replacement for predecessor Chris Marsh. Mr Marsh was arrested on suspicion of fraud following the discovery of a £40million black hole in Patisserie Valerie’s accounts in October, but was later released on bail. Chief executive Paul May resigned in November and was succeeded by Stephen Francis, who was chief executive of pork farmer Tulip. In a statement on Perrin’s appointment, Mr Francis said: ‘I am pleased to welcome Nick to Patisserie Holdings (CAKE).’He brings with him the necessary experience to help strengthen the team as the Company works tirelessly to put the events of the past months behind it and look forward to the future.’ |
| Joules Group (JOUL) said today it is setting up a new EU distribution hub and ordering products early as part of contingency plans for a potential hard Brexit. The group – a favourite of Kate Middleton’s – also said it is ramping up its currency hedging to help protect it against volatility in the pound as Brexit day approaches. Joules unveiled its Brexit contingency plans alongside strong half-year results. Sales jumped by 17.6% to £113.1million, defying the wider gloom on the UK High Street. Given the performance, boosted by strong sales in its international markets, Joules expects annual profits to come in slightly ahead of expectations. Businesses across the country are putting plans in place to help mitigate a ‘no-deal’ Brexit scenario, which would see imports and exports delayed, ports and roads gridlocked and the pound come under extreme pressure. |
| Ryanair Holdings (RYA) is today facing legal action over its ‘appalling’ treatment of passengers who were refused compensation over flight disruption caused by striking staff. Ryanair claimed the industrial action falls under ‘extraordinary circumstances’ and refused to pay out to customers. But the Civil Aviation Authority (CAA) disagreed and said compensation should be granted under EU law, and has now launched enforcement action. The news comes as a shot in the arm to some 100,000 beleaguered customers who were left stranded at airports over the summer after their flights were delayed or cancelled. |
| Rare disease focused UK-listed drug firm Shire Plc (SHP) is a step closer to being snapped up by Japanese pharmaceutical giant Takeda Pharmaceutical in a £46billion deal. At an extraordinary general meeting held in Osaka on Wednesday, over 88% of Takeda’s shareholders voted in favour of the deal. The acquisition remains subject to approval by Shire’s shareholders at meetings expected to be held later today. The takeover would make Takeda one of the world’s biggest drugmakers. |
| Thomas Cook boss Peter Fankhauser rules out using rights issue to pay £389m debt. Thomas Cook Group (TCG) chief executive has ruled out using a rights issue to raise money for the travel firm’s growing debt pile. Peter Fankhauser is understood to have told shareholders that a share offering will not be pursued despite growing fears over its £389million debt mountain. Fankhauser, 58, said the group will instead continue with its strategy of developing the own-brand hotels division and growing its online business. Shares fell another 3.9%, or 0.9p, to 22.72p, taking losses since last week’s profit warning to 53% |
| Sir Martin Sorrell’s new firm confirms £117m merger with US firm Mightyhive following weeks of speculation. First it was a mere ‘peanut’. But Sir Martin Sorrell now says his new ad agency is morphing into ‘a coconut, growing and ripening’ after another takeover. The tycoon’s company, S4 Capital (SFOR), confirmed its £117million merger with US firm Mightyhive following weeks of speculation. It is the second major deal struck by Sorrell, 73, since he walked out of WPP amid claims he had used company money to pay for a prostitute – allegations he denied. And in a wink to his former employer, Sorrell appeared to suggest his new outfit was gaining ground. He had claimed S4 was ‘a peanut in comparison’ to WPP when asked if it posed a challenge. | |
| #MeToo movement boosts sales at mind training firm set up by friends of David Cameron. A management training firm set up by friends of David Cameron is cashing in on the wave of #MeToo protests against sexual harassment. With worried companies seeking advice on how to prevent future scandals, Lam Zyfin Global Markets UCITS ETF Lam Zyfin MSCI India Ucits ETF (MIND) said it gained 11 clients after a series of allegations emerged against high-profile figures such as Hollywood producer Harvey Weinstein. The flurry of new business helped drive sales up 13.5% to £19.4million in the six months to the end of September. | |
| BT loses legal bid to switch to a cheaper pension rate and reduce fund’s £11bn black hole. BT Group (BT.A) has lost another legal battle to cut payouts for thousands of pensioners, dealing a blow to the company’s plans to shrink the black hole in its retirement fund. The telecoms giant wants to change the way it calculates pension rises for 83,000 current and former workers, switching the measure of inflation from the retail price index (RPI) to the consumer price index (CPI). This would lead to lower payments to those members and reduce the amount of funding required for the scheme. However, the company needs court approval for the switch, with judges asked to decide if it has the power to switch to CPI. |
| Wickes owner Travis Perkins to sell plumbing and heating division and make cost cuts amid continued DIY decline. Travis Perkins (TPK) is to put its plumbing and heating division up for sale and cut costs further as it looks to shifts its focus to trade customers instead of DIY. The group, which owns DIY chain Wickes, said it is targeting cost savings of between £20million and £30million, which are expected to affect the firm’s ‘above branch’ and distribution cost base. This comes with Travis Perkins already having slashed its Wickes head office workforce by a third in May, when it launched the hefty cost-cutting programme. |
 | GTR and Southern owner Go-Ahead hit with sanctions by the Government after timetable change chaos that caused commuter misery. Go-Ahead Group (GOG) will not be stripped of its Govia Thameslink franchise, but will have to fork out £15million for service improvements and will make no profit this year after May’s disastrous timetable changes, the Government said today. The Department for Transport said it is ‘holding GTR to account’ for its role in the disruption caused by the new timetables, but was letting Go Ahead continue run the franchise as a termination would ‘cause further and undue disruption for passengers’. Train companies, including Govia Thameslink – which runs Thameslink, Southern, Great Northern and Gatwick Express services – overhauled their timetable in May. The changes caused widespread disruption and delays across the rail networks. |
| Online trading platform IG Group Holdings (IGG) warned of falling customer numbers and sliding sales as it grapples with European regulations on spread-betting. In an effort to protect inexperienced traders, who can suffer big potential losses, EU authorities introduced rules regarding how these services can be marketed and sold. IG Group said that in the four months since the changes came into force on August 1, revenue in the UK and EU region was 20% lower than the same period last year. This pulled the whole group’s revenue down by 10% |
 | Construction firm Kier Group (KIE) suffered another torrid day, after announcing last week that it was raising more money from shareholders to pay down its debt pile. Analysts at Canaccord Genuity and JP Morgan slashed their ratings on the company, with Canaccord moving from a ‘buy’ to a ‘hold’ recommendation and JP Morgan more than halving its target price from 994p to 482p. |
| Advertising business Taptica International (DI) (TAP) has plunged after sneaking out a worrying announcement on Monday evening. It said chief executive Hagai Tal had been found guilty in a US court for fraudulently concealing weaknesses in his former business Plimus when he sold it to private-equity firm Great Hill. He has stood down from Taptica’s board, and Great Hill want Tal and the other defendants to return the £90million it paid for Plimus. |
| Ted Baker (TED) shares fell further as fears grow over the future of chief executive and founder Ray Kelvin. The clothing retailer slipped 8.4%, or 130p, to 1420p, meaning shares have plummeted by almost a quarter since allegations emerged over the weekend of harassment by Kelvin, 63, to staff. Anonymous testimonies include several claims that Kelvin massaged, kissed or inappropriately touched members of staff. But for some investors, the dramatic sell-off is an overreaction. One top-five shareholder said: ‘Ted Baker is a well-established global brand. The share price does not reflect the value of that, or the investment that management has put in to it. We remain supportive of the management team.’ |
 | As the FTSE reshuffle approaches, when the value of all companies on the UK stock market is reassessed to determine which should be included in its indexes, clear winners and losers are emerging. From December 24, Royal Mail (RMG) will be relegated from the list of the UK’s most valuable public companies, the FTSE 100. Its shares dipped 3%, or 9.5p, to 305.9p as fund managers who can only invest in FTSE 100 companies sold the stock off. The firm has had a dire year, suffering a major investor revolt over fat-cat pay, seeing its chairman Peter Long step down over criticism that he had too many commitments, and posting a 57 per cent fall in half-year profits. Insurer Hiscox Limited (DI) (HSX) will take its place. Its shares were up 0.3%, or 5p, to 1684p. |
| Thomas Cook Group (TCG) ‘fundamentals remain robust’, says fund management titan. Thomas Cook’s biggest shareholder has come out fighting for the 177-year-old travel giant, blasting a stock market sell-off as an “overreaction”. As fears grow over the company’s future, Invesco insisted Thomas Cook’s “fundamentals remain robust”. Almost 60% was wiped off the company’s market value in eight days after Thomas Cook last week announced its second profit warning in two months, suspended its dividends and revealed it had opened talks with its lenders in the wake of a burgeoning debt pile. But Invesco global equities fund manager Stephen Anness said: “Much of what we heard from Thomas Cook last week was a repeat from what we already knew – that trading suffered from the exceptionally hot summer. That was exaggerated by the unexpected change to accounting, a change we very much approve of as it more clearly reflects the underlying business. “The market has taken fright but from what we see, the fundamentals remain robust. From our conversations with the company, the balance sheet and liquidity is intact. This seems an overreaction.” |
| Ryanair Holdings (RYA) faces legal action over refusal to compensate strike-hit passengers. The Civil Aviation Authority (CAA) has launched an enforcement action against Ryanair after the low-cost airline refused to pay compensation to passengers for flight disruptions caused by recent strikes. Ryanair had argued that the widespread strikes over the summer amounted to “extraordinary circumstances” and it was therefore not obliged to pay out compensation. The CAA refuted this claim and said that the low-cost airline was not exempt, meaning Ryanair customers should be compensated. Ryanair has suffered a number of strikes this year by cabin crew and pilots after the airline recognised unions for the first time in 2017. |
| Joules Group (JOUL) sales rise as fashion brand braces for Brexit. Fashion brand Joules, known for its brightly coloured designs, has taken early deliveries of its spring and summer ranges and set up European a warehouse as it braces for a no-deal Brexit. The company said that it was also preparing for increased paperwork that could result from stricter customs checks and had hedged its US currency requirements for the next year “to mitigate the expected disruption that could arise in the event of a hard Brexit”. Joules joins the growing list of British companies, including drugs firm AstraZeneca and drinks merchant Majestic Wine, that are scrambling to stockpile products and looking for alternative routes in fear that the ports at Dover will be thrown into chaos from increased checks. The fashion brand said that it anticipates trading conditions in the UK to “remain challenging over the near term, with continued macroeconomic uncertainty, rapidly changing consumer shopping behaviours and a highly competitive environment”. |
| The £46bn merger between Shire Plc (SHP) and Takeda has won approval from shareholders, paving the way for the deal to be completed as early as January and creating one of the biggest pharmaceutical companies in the world. More than 88% of shareholders in Japanese company Takeda voted in favour of the acquisition, defying speculation that investors would reject the controversial deal. Anglo-Irish Shire, meanwhile, received the backing of more than 99% of its shareholders. The deal will be the largest ever foreign takeover by a Japanese firm and will rank among the 10 biggest acquisitions ever in the pharmaceutical sector. The tie-up will create a drugs powerhouse with close to £22bn of annual sales, roughly equivalent in size to AstraZeneca. |
| Profits at City broker plunged 17% for the year to September as a hiring spree meant it failed to cash in on a rise in M&A activity. The company, whose clients include Aston Martin and Asos, said that extra hiring costs and “a year of investment” meant profits fell to £31.6m, despite advisory fees shooting up 21% due to a boom in takeovers. The business has traditionally won work on listings but in recent years has refocused its efforts on M&A, which generates lucrative fees and is an area previously dominated by big banks or specialist boutiques. Co-chief executive Alex Ham, who at 35 is among the youngest bosses in the City, said that the listing market has “got a bit tougher” and the rise in advisory fees “does reflect a slight re-emphasis from us” towards acquisitions. | |
| Stagecoach Group (SGC) insists it will not sell its troubled US coach arm “at any cost” despite swinging sharply into the red following a hefty writedown on operations across the Atlantic. The bus and rail giant announced on Wednesday that it had opened sale talks with a number of parties over the sale of all or part of its North America network. The announcement came as the company posted a £22.6m half-year pre-tax loss, principally driven by a painful £85.4m writedown of its US investment. Stagecoach also shouldered a £24.2m cost to equalise minimum pension benefits between men and women. Shares rose around 13% and the company’s valuation briefly broke through the £1bn barrier as profit margins on Stagecoach’s UK rail arm beat City expectations. |
| Faroe Petroleum (FPM) has clinched a deal to boost its oil production in the Norwegian North Sea while battling a hostile takeover bid from its largest shareholder. Faroe told shareholders that the asset swap arrangement with Norwegian major Equinor, formerly known as Statoil, would raise its oil production by between 7,000-8,000 barrels of oil a day from next year. The Aberdeen-based producer said the output boost could allow it to return cash to shareholders and push through a sustainable dividend policy. Graham Stewart, the company’s chief executive, told investors that the shareholder sweetener was not designed to see off the bid by DNO to snap up the company. |
| Scandal-hit cake and coffee chain Patisserie Valerie has secured the services of a new finance chief after a hiatus of almost two months. Nick Perrin, the former finance director Aim-quoted veterinary company CVS, has been picked on an interim basis by parent company Patisserie Holdings (CAKE). He fills the void left by Chris Marsh, who was suspended on Oct 10 and resigned later in the month. Mr Marsh was interviewed by police as part of an ongoing fraud investigation. Led by serial entrepreneur Luke Johnson, Patisserie Valerie was plunged into crisis two months ago after revealing “significant, and potentially fraudulent, accounting irregularities”. A £40m black hole in its books was later unearthed. |
| Questor – Integrafin Holdings Ltd. (IHP): is little-known IntegraFin poised to be the next Hargreaves Lansdown? Questor share tip: shares in Hargreaves have made big profits for readers. IntegraFin is similar – but trades at a much lower valuation. Buy | |
| Govia Thameslink Railway (GTR) will keep Britain’s biggest rail franchise but will pay out £15m to improve services after its “unacceptable performance” contributed to a bungled timetable roll-out earlier this year. GTR’s parent company Go-Ahead Group (GOG) announced on Tuesday that it had struck a deal with the Department for Transport (DfT) that means it will hang on to the south east rail network, but will have to fund “passenger enhancements” this year. The DfT concluded that a termination of the franchise “would cause further and undue disruption for passengers and is not an appropriate course of action”. However Go-Ahead revealed that its overall profits would not be knocked off course by the Government sanctions, sparking anger among rail users who suggested that the decision by transport secretary Chris Grayling was a “whitewash”. |
 | Greencore stockpiles frozen prawns to avert Brexit sandwich crisis. The boss of Greencore Group (GNC) has warned Britons could face fewer sandwich options in the event of a chaotic withdrawal from the European Union as the catering company begins stockpiling ingredients such as frozen prawns. Patrick Coveney, chief executive, said that the main concern was “the availability of fresh produce” if there was a “no-deal” Brexit and problems at the border. The company, which makes sandwiches for Marks & Spencer and around half of all the brands on Britain’s high street, sources around 20% of ingredients from outside the UK. It has already started stockpiling “a few weeks’ worth” of frozen prawns and tomato paste. Prawn sandwiches have regularly been voted as the UK’s favourite. |
| Travis Perkins mulls sale of Wickes chain as it focuses on trade arm. Builders merchant Travis Perkins (TPK) could offload its Wickes DIY chain as part of plans to focus on trade customers in an overhaul of the company which also includes a sale of its plumbing and heating division. In a stock market announcement ahead of an analyst meeting Travis Perkins said that it is executing a “significant cost reduction programme” at Wickes while also “looking to review the options for maximising the value of Wickes in the medium term.” It is understood one of these options is a sale. Wickes has suffered from falling sales as it has faced intense competition from rival B&Q and a steady decline in the wider DIY market which has dragged the profits for its consumer division lower. Last month the retail business posted a 7.7% slump in half-year sales as operating profits were dragged down by £14m to £29m. |
 | Ferguson plays down suggestions it could leave the UK as US sales continue to boom. Ferguson (FERG) played down suggestions it could jettison its UK business after rival Travis Perkins set out plans to sell its plumbing and heating division. The FTSE 100 giant, formerly known as Wolseley, was founded more than a century ago in the UK and is listed in London but now does the vast majority of its business across the Atlantic. While its US arm has been booming in recent years thanks to the strong economy, its home division has been going through a drawn-out restructure aimed at bolstering margins amid stagnation in the market. Analysts at Peel Hunt said Ferguson’s presence in the UK “looks increasingly circumspect” in light of Travis Perkins’ decision to sell up. |
| ‘Me Too’ scandals boost Lam Zyfin Global Markets UCITS ETF Lam Zyfin MSCI India Ucits ETF (MIND) as more companies seek out harassment training. The recent string of high-profile sexual harassment scandals helped boost revenues at executive training business Mind Gym as top employers sought out advice on how to stamp out inappropriate behaviour in the office. Octavius Black, the company’s co-founder and chief executive, said its new Respect programme had signed up 11 clients in the wake of allegations against the likes of Hollywood producer Harvey Weinstein. He said: “We’re increasingly finding that organisations are at the very least wanting to mitigate the risk and at best create an environment that we might call ‘psychologically safe’, where people can flourish without fear or intimidation. “We’re seeing global appetite among [senior directors] about how can they can get the right culture and behave in ways that are constructive and helpful, rather than putting each other at risk.” | |
| Travis Perkins mulls sale of Wickes chain as it focuses on trade arm. Builders merchant Travis Perkins (TPK) could offload its Wickes DIY chain as part of plans to focus on trade customers in an overhaul of the company which also includes a sale of its plumbing and heating division. In a stock market announcement ahead of an analyst meeting Travis Perkins said that it is executing a “significant cost reduction programme” at Wickes while also “looking to review the options for maximising the value of Wickes in the medium term.” It is understood one of these options is a sale. Wickes has suffered from falling sales as it has faced intense competition from rival B&Q and a steady decline in the wider DIY market which has dragged the profits for its consumer division lower. Last month the retail business posted a 7.7% slump in half-year sales as operating profits were dragged down by £14m to £29m. |
| Thomas Cook Group (TCG) fears spread into debt markets. Fears over Thomas Cook’s future have leached into corporate bond markets, sending the company’s shares to fresh lows as concerns reverberated about its towering debt pile. Yields on the company’s listed debt spiked to almost 20% as the cost of insuring against a Thomas Cook default hit a record high. Its share price sank more than 15% when the market opened on Tuesday leaving the 177-year-old company worth little more than £300m. With net debt of £389m, yields on Thomas Cook’s two corporate bonds – due to mature in 2022 and 2023 – rose sharply. Meanwhile, the price of credit default swaps, which pay out if Thomas Cook is unable to meet its financing obligations, doubled to around 10% |
| Bank of England needs to stay out of Brexit politics, warns Sentance. The Bank of England is jeopardising its reputation for independence by getting drawn into the political debate over Brexit, one of its former policymakers has said. The criticism from Andrew Sentance follows a coruscating intervention by Lord King of Lothbury, the former governor, who broke protocol on Tuesday to attack the Bank for warning that Brexit could plunge the UK into a catastrophic recession. Mr Sentance, a member of the monetary policy committee between 2006 and 2011, said the Bank’s independence today “doesn’t seem as strong as it was in its first ten to fifteen years”. It became independent in 1997. Its worst-case Brexit scenario, published last week, was “pretty extreme”, he told MPs on the Treasury select committee. | |
| Service sector growth weakest since EU referendum. Britain’s dominant services sector dropped sharply last month to its lowest since just after the vote to leave the European Union. Business and consumers cut back spending in the face of Brexit uncertainty, according to the closely watched IHS Markit/CIPS purchasing managers’ index. A reading of 50.4, down from 52.2 in October and well below forecasts, in the lowest since July 2016. It points to GDP growth of about 0.1% in fourth quarter. | |
| British housebuilders and domestic stocks rallied amid rising optimism that a Brexit deal will be agreed. The chances of a no-deal Brexit appeared to recede yesterday after MPs backed a proposal for parliament to be given a free hand to decide what should happen next if they reject Theresa May’s Brexit deal in a vote next week. The move effectively gives MPs the power to stop a no-deal Brexit. Berkeley Group Holdings (The) (BKG) led a rally in domestic stocks after analysts at Barclays predicted that the housebuilding sector would surge if a Brexit deal is agreed. A weakening of consumer confidence in the event of a no-deal Brexit would be expected to put pressure on the sector. Berkeley, Barratt Developments (BDEV), Persimmon (PSN) and Taylor Wimpey (TW.) all gained between 5.5% and 7% |
| Thomas Cook Group (TCG) shares rebounded from an all-time low after its chairman spent more than £80,000 buying shares. Frank Meysman bought 373,000 shares at 22p per share. The embattled company, which has fallen sharply after two profit warnings and worries over its high level of debt, was also boosted by a “buy” recommendation from Jefferies. “Whilst acknowledging concerns around leverage, we conclude that current distressed levels do not reflect intact key strategic opportunities,” analysts said. Shares gained 5¾p to 28½p. |
 | Hargreaves Lansdown (HL.) fell 75p to £19.04 after analysts at Morgan Stanley cut the stock to underweight, citing a weaker UK economic outlook which is likely to hit 2019 flows, and weaker stockbroking fees. |
| Pressure on Ted Baker (TED) boss grows. Ray Kelvin, the founder and chief executive of Ted Baker, arrived for work at the retail chain’s London headquarters yesterday as more details emerged about his alleged workplace practices. More than 200 members of staff have made complaints, accusing him of forced hugging, making sexual innuendos and stroking people’s necks. In one claim, a woman who was an employee told BBC Radio 1’s Newsbeat: “When you had to hug him . . . It was . . . intense body contact.” Ted Baker shares closed 8.4% lower at £14.20. |
| Court cuts off BT’s call on pension changes. The Court of Appeal has dealt a blow to BT’s attempts to reduce its multibillion-pound pension hole. BT Group (BT.A) had challenged a High Court ruling from January, which rejected its plans to change the measure of inflation used to calculate annual pension rises for about 83,000 present and former workers. Its appeal was dismissed yesterday when Lady Justice Asplin said that the judge had made the right conclusions. The ruling is a setback for BT, which has one of the largest private sector schemes in Britain and had estimated last year that the potential savings for the company could be between £1 billion and £2 billion. BT is a leading provider of mobile, broadband and fixed-line services. It is in the midst of a restructuring and is changing its chief executive. Philip Jansen, a former head of Worldpay, is set to succeed Gavin Patterson in February and will oversee plans to cut 13,000 jobs. |
| Job fears as DIY group gets a makeover. More than 13,000 workers at Wickes, the DIY chain, and City Plumbing Supplies and PTS, the plumbers’ warehouses, face an uncertain future after their parent company revealed plans to overhaul its businesses. In several hours of meetings with investors and analysts yesterday, Travis Perkins (TPK) outlined plans to turn its back on the household consumer and concentrate on supplying the building trade and construction contractors. It admitted that increasingly the do-it-yourself market was being replaced by “do-it-for-me”, with householders spending on repairs and improvements typically turning to tradespeople to carry out the work for them. |
| Sorrell goes nuts over his second deal. Sir Martin Sorrell has spent $150 million on a second takeover for his new venture since the summer. S4 Capital (SFOR), the former WPP chief’s new company, is acquiring Mightyhive, a Californian digital agency that helps large companies to buy adverts online. The deal comes months after he bought Mediamonks, an agency based in Amsterdam that creates online advertising companies. The €300 million purchase exacerbated tensions with his former employer, which also had been bidding for Mediamonks. Sir Martin left WPP abruptly in April after an investigation into his personal conduct and use of company money. He has denied any wrongdoing. Sir Martin, who recently described S4 Capital as a “peanut” compared with WPP, said that his latest deal would bolster his hopes of creating an advertising business fit for the digital era. “The peanut has morphed into a coconut and is growing and ripening,” Sir Martin said. | |
| ‘Profit cap won’t force GTR off the rails’. Go-Ahead Group (GOG) yesterday shrugged off a government profit cap on its struggling Thameslink and Southern Railway franchise, saying that it did not expect the intervention to hurt its earnings. The train and bus group has been operating the GTR rail franchise since 2015, alongside its junior joint venture partner Keolis, a subsidiary of SNCF, the French state railway. GTR is the superfranchise created by the Department for Transport from the merger of Thameslink, the north-south cross-London network, with Southern Railway that serves the south of England and runs the Gatwick Express. It employs 28,000 people and operates Southeastern Trains, as well as 5,000 buses around the country, with a strong presence in London, Oxford and the North East. |
| Thomas Cook falls again as debt cost rises. Thomas Cook Group (TCG) suffered yet more turbulence yesterday as its board sought to reassure its biggest investors over its ballooning debt and poor trading. Shares of the travel group, which had halved since the latest profit warning last week, fell by a further 16.7% to 19¾p at one point yesterday before closing down 3.9% at 22¾p. Fears over Thomas Cook’s debt led to the cost of insuring debt issued by the company against default hitting a record high, while the value of its bonds also fell. The 177-year-old travel group, which carries 20 million holidaymakers a year and has 22,000 employees, has been under pressure since warning last week that trading this year had been worse than expected and that its net debt had reached £389 million. Thomas Cook’s debt is now higher than its market value, which is £350 million. |
| Rule changes make costly difference for spread betting firm. New European rules have upset the odds for one of Britain’s leading spread betting companies, with IG Group Holdings (IGG) saying yesterday that it expected first-half revenue, for the six months to the end of November, to be 6% lower than the same time last year. Restrictions on the sale of binary options, a form of gambling on the movement of share prices and currency markets, came into force in July. In August there followed tougher rules governing the use of contracts for difference, where punters bet on market moves but may end up losing more than the value of their original stake. The rule changes appear to have had an immediate impact on IG’s bottom line. The company said that revenues in Britain and the European Union in the four months since the rules had come into force were 20% weaker than in the same period in 2017. This contrasted with a 9% rise in revenues from IG’s operations in Asia and other non-EU countries over the same time. |
 | Sage Group (SGE) finds new finance chief already at boardroom table. The head of Sage’s boardroom audit committee has been appointed finance chief at the embattled software developer. Jonathan Powell, a former chief financial officer of the London Stock Exchange, will start his new job on Monday. He will receive between £980,000 and £1.2 million in Sage shares to compensate him for stock he is forfeiting from Close Brothers, the merchant bank, which he left this year after a decade as its finance head. His move from an independent director’s role is the latest in a series of changes in the executive ranks at Sage, which develops accounting tools for small businesses and is one of only two software companies in the FTSE 100. Founded in 1981, it started selling CD-roms to small companies and grew through acquisitions. These days, its software is used by more than half of British enterprises. |
| Pay goes up for pilots in Ryanair Holdings (RYA) deal. Plagued by industrial disputes with flight crews for more than a year, Ryanair said yesterday that it had signed a peace deal with its German pilots. Europe’s largest short-haul airline said that the four-year agreement involved pay rises and a five-days-on, four-days-off working roster. Germany is the largest passenger airline market in Europe, into which Ryanair is expanding to take on Lufthansa and Easyjet. Michael O’Leary, Ryanair’s chief executive, has been signing off on pay deals of up to 20% since disputes erupted last year, which have weighed heavily on profitability. Ryanair reported a 7% dive in profits at its most recent results. |
| Royal Mail (RMG) is set to be sent packing from the FTSE 100 after a shocker of a profit warning this quarter sent its shares to a record low. The former state-owned provider of postal services was privatised and floated on the London stock market in 2013, with its shares priced at 330p. It reached a record high in March this year, at 631p. However, a shareholder rebellion over the chief executive’s pay and the resignation of Peter Long, its chairman, after accusations of “over-boarding” were compounded by a surprise profit warning in October, which wiped £1.2 billion off Royal Mail’s market value in two days. |
| The quarterly FTSE reshuffle is based on closing prices from today and is scheduled to go into effect from December 24. In the game of one-out, one-in, Hiscox Limited (DI) (HSX), the Bermuda-based upmarket insurer, is poised to join the top-flight index. Its shares have risen nearly 15% this year, after its half-year earnings beat expectations. However, it warned last month that its business would slow for the rest of 2018 amid a challenging claims environment. |
 | Thomas Cook Group (TCG) faces relegation from the FTSE 250 after a second profit warning in as many months last week and worries over its £389 million debts sent shares to a new low of 22¾p last night — extending its loss so far this year to 81.5%. AA (AA.) is also at risk of demotion after reporting a 65% fall in first-half pre-tax profits this quarter amid higher callouts for repairs caused by extreme weather. |
 | Neil Woodford’s Woodford Patient Capital Trust (WPCT) is expected to be readmitted to the mid-cap index after a 22 per cent rise in its share price over the past six months, driven by strong share price gains from companies it has invested in. The newly floated Aston Martin Lagonda, Funding Circle and Smithson Investment Trust are all set to enter the FTSE 250. |
  | A rise in the price of “safe haven” gold to a one-month high helped to propel Fresnillo (FRES) and Randgold Resources Ltd. (RRS), the precious metals miners, to the top of the FTSE 100. Fresnillo rose 28¾p to 800½p; Randgold Resources added 192p to £64.52. |
  | Paper and packaging companies, which tend to be bundled into the “high-growth” riskier basket of cyclical stocks, were weak. Smurfit Kappa Group (SKG) fell 112p to £21.08. Smith (DS) (SMDS), which is due to report half-year results on Thursday, tumbled 16p to 328¾p. Mondi (MNDI) edged down 32p to £17.44. |
| Kier Group (KIE), the construction and engineering group, fell sharply for a third day as Canaccord Genuity slashed its rating from “buy” to “hold” after its recently announced rights issue. It closed down 18½p at 427½p. |
      | Gyms lead the star performers. Stockpickers seeking leisure company bargains were given a series of recommendations from RBC as the bank initiated coverage of the sector. It gave “outperform” ratings to Cineworld Group (CINE), Domino’s Pizza Group (DOM), Greene King (GNK), The Gym Group (GYM), Marston’s (MARS) and Merlin Entertainments (MERL). RBC based its analysis on two key revenue drivers for the sector: new unit growth and like-for-like sales. The Gym Group edged up 3½p to 278p after the analysts said that the no-frills chain was its top growth pick, citing 10 per cent expansion. Marstons and Greene King were rated on their potential for M&A, with both stocks good value thanks to high yields. The pub operators closed up 0.2% and down 1.4%, respectively. Cineworld was highly rated on the basis that its management had the chance to use its proven track record on a larger group. The shares closed down 3½p at 277¼p. Merlin, the owner of Legoland and Alton Towers, was expected to “surprise on the upside” after a tough couple of years. Expectations that cost pressures would be addressed at its full-year results in March backed up the rating. Its shares closed down 7½p at 349¾p. |
 | Tempus – Greggs (GRG): Avoid. A retailing class act, but the shares look pricey in the present climate |
 | Tempus – Northgate (NTG): Hold. Higher hire revenues will shortly translate into profits |
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