 | Aviva (AV.) chairman Sir Adrian Montague has quit the insurer and pensions provider a month after it emerged that a boardroom row had erupted over a radical break-up plan. Senior City sources told The Telegraph last month that some top directors were left frustrated after radical plans for the FTSE 100 insurer to split itself in two were rejected by the board, who chose to keep the company intact. It is not clear if Sir Adrian, who has been chairman for almost five years, ever supported the break-up plan. At an investor day in November he told shareholders he agreed with the current strategy. One person close to the company said he had “old fashioned, boardroom values and is a man of his word; he said he’ll do five years and that’s what he’s done”. |
 | Sainsbury (J) (SBRY) is poised to axe hundreds of managers in a cost-cutting drive at the supermarket chain. The grocer said the redundances will bring Argos and Sainsbury’s closer together, following its botched £10bn merger with smaller rival Asda last year. Sainsbury’s gobbled up Argos in a £1.4bn deal in 2017. Chief executive Mike Coupe, who is rumored to step down this summer, wrote to staff on Tuesday. He said: “We have to adapt to continue to meet the needs of our customers now and in the future and, while change can be hard, it’s also necessary. “We have a clear purpose and a strong and compelling set of priorities that will support us to deliver for our customers.” |
 | Dixons Carphone (DC.) was left red faced after admitting that sales fell over the festive period, after it initially reported a rise by mistake. The retailer originally said overall sales grew by 2% for the 10 weeks to Jan 4, only to rectify that a few hours later to say that sales in fact fell by 2%. It blamed the blip on a clerical error and stuck to financial guidance for the year to April, when it expects to make profits of around £210m. The company’s shares, having initially risen 5%, slumped after the correction was issued but recovered again to trade up 5% at 149p. Strong demand for supersize TVs, Apple Airpods and high-end hair dryers helped the company to a 2% increase in electrical like-for-like sales for the 10 weeks to Jan 4 in the UK, better than some of its peers including struggling John Lewis. Dyson’s £300 Supersonic hair dryer and £450 Airwrap styling tool proved major hits. |
  | TalkTalk Telecom Group (TALK) has agreed a £200m sale of the FibreNation division to ease its debt burden, in a deal that analysts fear could narrow the broadband operator’s future competitive options. FibreNation’s sale to CityFibre Infrastructure Holdings (CITY) includes a wholesale commitment that will require TalkTalk to offer its customers broadband services that use CityFibre’s network. The takeover comes as analysts question whether CityFibre will be able to match the faster pace of fibre broadband roll out at rivals such as Openreach. CityFibre has raised its target to connect 8 million UK homes and businesses after buying FibreNation, but has not set a deadline. TalkTalk maintained on Tuesday that its agreement with CityFibre would give it the flexibility to access other networks if CityFibre fails to meet its targets. |
 | The boss of easyJet (EZJ) has demanded clarity over the rescue of Flybe and warned that ministers must not hand out favours to individual airlines. Johan Lundgren said his firm is in talks with the Government over a planned overhaul of the controversial air passenger duty (APD) regime, which costs it tens of millions of pounds a year. Flybe was last week given a lifeline by the state, which allowed it to delay payment of a £10m APD bill amid fears the regional airline would otherwise go bust. The whole tax regime – which costs up to £26 per passenger – is now being reviewed. But rivals such as British Airways owner IAG and Ryanair cried foul, saying the deal was an unfair market intervention and pointing out that Flybe is part owned by billionaire Sir Richard Branson. |
 | Vodafone Group (VOD) has pulled out of Facebook’s effort to create a new global currency, adding to the growing list of companies distancing themselves from the social network’s plans. The British telecoms company said it instead planned to focus its efforts on its mobile payment system, M-Pesa. It is the latest blow to the Libra currency, a project that Facebook announced last year but which has been damaged by an exodus of backers and criticism from regulators. Vodafone’s departure adds to exits from Visa, Mastercard, Stripe, PayPal, eBay, Booking Holdings and Mercado Pago, leaving just 20 of the original 27 members of the Libra Association, the group that will govern the currency. |
 | Questor: Imperial Brands (IMB) feels like a very uncomfortable stock to hold – which is why we will do so. Questor share tip: British American looked equally cursed this time last year and its shares have gained 37%. The same could happen to Imps |
| The Australian bushfires have hit the production of climate-polluting coal, the world’s biggest mining company said. BHP Group PLC (BHP) said that output of energy coal at its New South Wales operations had been affected and risked being further constrained by the fires, which experts say have been exacerbated by global warming. “Smoke from regional bushfires and dust have reduced air quality at our operations, which has impacted December 2019 production,” it said. Machinery had to be operated more slowly amid reduced visibility and some staff had taken leave to protect their homes or to join volunteer firefighting efforts, the company said. “We are monitoring the situation and if air quality continues to deteriorate, then operations could be constrained further in the second half of the year,” it said. The irony was not lost on commentators as the bushfires intensify calls for the world’s biggest coal exporter, to scale back production. “You can’t make this stuff up!” Terry Serio, an Australian actor, tweeted. | |
| Dixons Carphone (DC.) blamed a “clerical error” yesterday for an about-turn in which the electricals retailer admitted that a reported 2% rise in its sales over the Christmas period was actually a 2% decline. Almost seven hours after publishing its trading update for the key holiday season, Dixons Carphone issued an correction to its group sales figure that briefly sent its shares down. |
| A strong Christmas trading quarter, helped by the demise of the rival Thomas Cook Airlines, has enabled easyJet (EZJ) to proclaim that this winter will not be as bad as last year’s record worst. However, the budget airline has been put on notice by Sir Stelios Haji-Ioannou, its founder and 34% shareholder, that it needs to do much better and that he may cut up rough again unless annual earnings improve sharply. Total revenues between October and December, the first trading quarter of Easyjet’s financial year, rose by nearly 10% to £1.42 billion on passenger numbers up 2.8% at 22.2 million, demonstrating that the airline has been able to force through profitable fare increases. |
 | Camellia (CAM) said that it faces allegations of serious assault and sexual misconduct against its staff in Africa. Camellia revealed the allegations as it warned that profits would be lower than expected because of sinking tea prices, hurricane damage in the Caribbean and a high tax bill. Employees in two of its African subsidiaries are facing allegations of assault, harassment and sexual misconduct. The company said that it had “received notification of claims to be made in the UK relating to allegations made by multiple individuals”, and added: “The company and its wider group takes any complaint of criminality, misconduct, illegality, or unethical behaviour extremely seriously. “The allegations are being urgently investigated. We have incurred legal costs during 2019 relating to this and further expenses are expected in 2020.” |
| TalkTalk Telecom Group (TALK) has agreed the delayed sale of its fledgling fibre broadband infrastructure business for £200 million to a rival backed by Goldman Sachs. The telecoms company also has agreed a long-term wholesale agreement with CityFibre Infrastructure Holdings (CITY), the buyer, to access its emerging full-fibre network. The sale of Talktalk’s Fibre Nation venture was expected last year, but it was postponed after Labour’s general election pledges to nationalise Openreach, BT’s broadband infrastructure division, and to provide “free” full-fibre broadband. |
 | Long-serving chief financial officer of BP (BP.) is to retire this year after missing out on the top job. Brian Gilvary, 57, will leave BP at the end of June and will be replaced by Murray Auchincloss, 49, as the changing of the guard at the top of the group continues. Mr Auchincloss has worked closely with Bernard Looney, 49, BP’s incoming chief executive, who takes over from Bob Dudley, 64, in February. The departure of Mr Gilvary means that the company will have an all-new team at the top within the space of only 18 months, after Helge Lund, 57, replaced Carl-Henric Svanberg, 67, as chairman at the start of last year. |
| Hundreds of management jobs at Sainsbury (J) (SBRY) are being axed in the latest round of cutbacks by the company. It said that the job cuts were driven by its motivation to unite its supermarket with Argos, which it bought four years ago as part of attempts to tap into how modern shoppers buy online. Sainsbury’s refused to say how many jobs would go in this latest cull, but it said that it had cut one in five jobs across its senior leadership team since March last year. It added that plans to bring together teams in its commercial, retail, finance, digital, technology and HR functions would lead to a reduction of “hundreds of management roles”. |
 | Setbacks on several fronts forced Joules Group (JOUL) to report an 82% fall in half-year pre-tax profit to £1.7 million, from £9.3 million last year. The retailer partly blamed a late Black Friday, but also had to pay out £6.7 million to close stores that were underperforming and to relocate its head office. Extending its distribution centre lease cost it £700,000. Revenue fell by 1.4% to £111.6 million in the half-year to November 24. |
| Sensyne Health (SENS) is considering potential acquisitions to accelerate its growth and arrest a slump in its share price. Sensyne Health said that it was “exploring a small number of strategic [mergers and acquisitions] opportunities that have the potential to scale our business more quickly to achieve a leadership position in the clinical artificial intelligence market and create value for shareholders”. The update was made alongside Sensyne’s half-year results, which showed a loss before tax of £9.9 million in the six months to the end of October, down from £10.3 million a year earlier. | |
 | Lloyds Banking Group (LLOY) has been accused of relying on contractual clauses to try to “evade” regulations governing the fair treatment of customers. A dispute in the High Court starting in June will examine whether Lloyds is entitled to use small print in its loan contracts to avoid rules designed to protect borrowers. Jason Schofield, a property developer, is seeking “consequential loss” damages of £6 million, which he claims arise from mis-sold interest rate swaps. Under a compensation scheme ordered by the Financial Conduct Authority, Mr Schofield, 57, received an undisclosed redress payment from Lloyds for direct costs associated with three swaps sold to him alongside loans from Bank of Scotland, part of Lloyds. However, when he sued the bank for the alleged knock-on effects of the swaps, it noted contractual clauses that meant Mr Schofield effectively had agreed that the bank was not offering him any advice on the merits of the swaps. It also claimed that it had not breached any regulatory requirements. He has pointed to financial regulations, which he claims mean that a bank cannot contractually exclude itself from regulatory obligations to private customers, including a requirement to clearly explain the nature of products. |
 | The boss of Royal Bank of Scotland Group (RBS) is planning a clearout of several senior managers, with the head of the digital bank set to follow the leadership of the investment bank out of the door. The changes orchestrated by Alison Rose, who took on the top job last November, include the likely departure of Mark Bailie, 46, who runs Bo, RBS’s digital lender. RBS is also searching for a new head of its retail bank, while its marketing boss is likely to retire. Sky News first reported the changes. The departures are expected to take place within a few months and come after the chief executive and finance boss of Natwest Markets, RBS’s investment bank, left in December. |
| The chairman of Aviva (AV.) is to step down as the insurer wrestles with shareholder dissatisfaction over its strategy. Sir Adrian Montague, 71, the City grandee who has chaired the company since April 2015, will retire this year once a replacement has been found. The move marks further change at the top of the business after Maurice Tulloch, 50, took over as chief executive last March and Andy Briggs, 53, a senior executive who had been a contender for the top job, abruptly quit a month later. Jason Windsor, 47, replaced Tom Stoddard, 53, as Aviva’s finance chief last year, while there also has been a reshuffle of its non-executives. |
 | The struggling foam mattress retailer that has tried to sell itself as a “sleep wellness brand” has sharply narrowed its losses after slashing the amount it spends on marketing. Eve Sleep PLC (EVE) has had its shares almost wiped out by profit warnings. In September, Eve called off merger talks with Simba, a rival, after cautioning that its sales would be below expectations. The company, valued at £5.6 million, said yesterday that its turnaround strategy had led to a 43% fall in full-year losses to £10.8 million and that it had halved its “cash burn”. Sales fell by a fifth to £23.8 million in the year to the end of December 2018 as the company said that it was focusing on “prioritising long-term profitability and cash-generation over short-term sales growth”. |
| Shares in Quilter PLC (QLT) jumped yesterday amid rumours that Warburg Pincus, the American private equity firm, was mulling a takeover bid. Both the British wealth manager and its possible suitor declined to comment, but many in the City seemed to think that such a tie-up could make sense. It is understood that Warburg Pincus is looking to sell its stake in Reiss, the fashion retailer, freeing up money to invest elsewhere. The initial talk was for a bid of £3.1 billion, although that is unlikely to be enough to win the backing of shareholders. | |
 | Legal & General Group (LGEN) rose 5½p to 307½p thanks to a gushing “buy” note from Bank of America. “We see L&G as a quality business, leading in each of its key markets, with an attractive (and growing) dividend yield,” Andrew Sinclair, an analyst at the bank, said. |
 | Learning Technologies Group (LTG) re-established itself as one of the few billion-pound stocks on Aim after its shares rose 19½ to 157p. The online learning group, which provides tools to help businesses such as Glaxosmithkline and the BBC to train staff, lifted its profit forecasts again and expects adjusted underlying profit of at least £41 million in 2019. |
 | Shares in Lekoil Ltd (DI) (LEK) jumped by a fifth yesterday after it secured extra time to find crucial funding to replace a $184 million loan that turned out to be fake. The oil producer believed that it had a deal with the Qatar Investment Authority to fund its share of development on its most promising asset, the Ogo field off the coast of Nigeria. It owed Optimum, its partner in the field, $10 million by the end of February and had to prove that it could raise a further $28 million or else risk losing the asset altogether. Lekoil said yesterday that Optimum had agreed to defer its obligations, so Lekoil must pay $2 million by March 20 and a further $7.6 million by May 2. It will have until July 2020 to show that it can raise the $28 million. Olalekan Akinyanmi, Lekoil’s chief executive, said: “We are focused on securing the necessary funding under the revised schedule.” |
 | Tempus – Whitbread (WTB): Avoid. Frailties in the British and German economies make predicting stronger sales gains highly difficult |
 | Tempus – Gamma Communications (GAMA): Buy. Quality, high-growth business with lots of overseas potential |
 | Department for Transport officials did not tell the then transport secretary about a plan that could have prevented a costly legal dispute between rail operators and the government, the high court has heard. Stagecoach Group (SGC) and other rail firms are seeking tens of millions of pounds in compensation in a claim that could have far-reaching implications for a privatised rail system that lawyers acting for the firms said was “in crisis”. The rail company Arriva settled with the government over the East Midlands franchise on the eve of the trial but the case went ahead on Monday. A court heard that the DfT was responsible for a “long series of missteps and mistakes” when it was run by Chris Grayling between July 2016 and July 2019. Stagecoach had been bidding for the Southeastern, East Midlands and West Coast franchises, the latter in partnership with Virgin and the French state rail firm, SNCF. The lawsuit revolves around the department’s decision to exclude the bids last year because the rail companies would not promise to fund enough of any future increase in the railways pension scheme deficit, currently estimated at £7.5bn. |
 | Shares in Intu Properties (INTU) fell sharply after the indebted shopping centre owner confirmed it would push ahead with a cash call thought to be worth as much as £1bn. Intu, which owns shopping centres including the Trafford Centre in Manchester and Lakeside in Essex, said it would attempt to tap investors for funds alongside its full-year results at the end of the February, confirming reports. The company has been hit by the weak backdrop for high street retailers, with struggling groups including Arcadia and Debenhams occupying a lot of space in its centres. While Intu did not confirm how much it planned to raise, the figure is thought to be around the £1bn mark. |
 | Fevertree Drinks (FEVR) has warned on profits and cut its sales forecast for the second time in two months, blaming a slowdown in consumer spending. The maker of premium tonic and mixers said it faced tough trading conditions in the UK over Christmas caused by general belt-tightening among consumers. Shares plunged 24% after the company said it expected full-year profits to be about 5% lower in 2019 than in 2018, when Fever-Tree reported a 34% jump in pre-tax profits to£76m. Its shares were trading at £15.05 on Monday, the lowest level for the former stock market darling since April 2017. Nicholas Hyett, an equity analyst at Hargreaves Lansdown, said Fever-Tree’s trading update made for “ugly reading”. “Falling sales in the UK will inevitably spark fears the gin boom has turned to bust, while guidance for weaker sales in the US and lower margins undermine Fever-Tree’s long-term pitch that it can replicate its success across the pond,” he said. |
| Lloyds Banking Group (LLOY) vows to halve emissions linked to its loan book. Bank to work with customers to cut exposure over next decade |
| Lekoil Ltd (DI) (LEK) fake loan probe puts focus on Bahamas broker. Scam by people pretending to be from the QIA leaves oil explorer’s future in balance |
 | Lex – M&C Saatchi (SAA): it isn’t working. Big ideas and bigger specs are no longer enough to preserve a dying business model |
 | Lex – BAE Systems (BA.)/Collins GPS: on-target takeover. Deal shows UK defence group has renewed sense of direction |
| Fevertree Drinks (FEVR) shares fall 25% as UK sales shrink. Premium tonic maker joins list of companies under pressure from weak Christmas trade |
  | Sirius Minerals (SXX) urges shareholders to back Anglo American (AAL) £524m rescue bid. Chairman warns struggling miner risks collapse if deal is not approved |
| Shopping centre owner Intu Properties (INTU) in talks to raise fresh funds. UK group has sustained heavy blow from retail troubles |
| BAE Systems (BA.) to buy Collins’ GPS business for $1.9bn. UK defence group in biggest acquisition for more than a decade |
| BAE Systems (BA.) has spent £1.7 billion on two defence businesses that will help it expand in the US. The British defence group will spend almost £1.5 billion buying Collins Aerospace’s military GPS division, which makes technology that helps guide missiles to their targets. And it will spend another £210m on a unit of American rival Raytheon, which makes airborne radios and communications systems for customers that include the US Department of Defence. Both firms have to sell some of their divisions so that the deal, which was announced last June, can get approval from regulators. BAE’s takeovers, however, depend on the Raytheon-UTC merger going through, as well as also getting the green light from regulators. |
| Fevertree Drinks (FEVR) value crashed £629m yesterday as it issued its second warning about sales within three months. The tonic water company said UK sales fell over the Christmas period, triggering a sell-off that sent shares plunging more than 27%. The business blamed the lacklustre performance on ‘consumer belt-tightening’ and said it expected conditions to remain challenging in 2020. There are signs that the gin boom – which Fever-Tree has ridden to huge success – could be losing its fizz as drinkers increasingly turn to spiced rums. |
 | The focus of crop science on protecting plants from seed to harvest is changing as it faces environmental and regulatory challenges. Key among them is the issue of polymer-based coatings used to preserve and protect seeds that are adding to the microplastics problem. Two years ago, the European Union initiated restrictions on the use of these tiny pollutants in cosmetics and most experts believe the agri-sector has no more than five years before it is subject to similar strictures. Eden Research (EDEN) sustaine encapsulation technology is free from plastics, is derived from a natural source, and is suitable for use with both sustainable biopesticides and conventional synthetic pesticides. Indeed, it is this technology that has enabled the commercialisation of Eden’s own biopesticides, which are used to protect grapevines and various other crops. On January 8, Eden revealed it had signed a one-year exclusive evaluation agreement with Corteva – the former’s first foray into the seed market. While the exact details of the evaluation haven’t been released, Eden chief executive Sean Smith confirmed Sustaine would be used on a ‘significant crop’. |
| Intu Properties (INTU) went public with its desire to raise funds to shore up its rickety balance sheet. The shares shed 2.5% in early trading after it confirmed it is in ‘constructive discussions’ with shareholders and potential new investors who are being asked to back the cash call. According to one weekend report, Intu is looking for £1 billion of emergency cash. While it is an eye-watering sum, it may not cut the mustard. According to City broker Peel Hunt, an injection of the order talked about would leave Intu ‘arguably still over-levered’. Fundamental changes in shopping habits resulted in the first fall in retail sales in more than a quarter of a century last year, according to the British Retail Consortium. |
    | Goldman Sachs took a forensic look at the media sector, which it said is primed for earnings growth coupled with merger and acquisition activity. Upgraded to ‘buy’ was used car listings site Auto Trader Group (AUTO), while Relx plc (REL), the publisher formerly known as Reed Elsevier, was among Goldman’s top picks. WPP (WPP), meanwhile, was downgraded to ‘neutral’ with the risk and reward of investing in the advertising group now ‘more balanced’. Among those stocks rated ‘sell’ by Goldman was the struggling school and college books firm Pearson (PSON). It ended the day flat at 588.6p, supported by whispers that it may be the subject of a break-up bid. |
 | Convatec Group (CTEC), the wound care specialist and maker of stoma bags, fell to 205.5p on a downgrade to ‘underweight’ by JP Morgan Cazenove to reflect the potential failure risks allied to the company’s turnaround plans. |
| More than 1,000 EU financial services companies plan to open UK offices after Brexit in a bid to continue serving customers in Britain. An influx of companies opening offices, hiring staff and renting office space could help to mitigate the economic blow dealt to the City by British institutions moving some of their assets and operations to European financial centres such as Paris and Frankfurt. A total of 1,441 EU companies had applied to the Financial Conduct Authority by October 2019 for temporary permission to continue operating in the UK after Brexit, according to figures obtained by consultancy Bovill under a freedom of information request. Temporary clearance will allow banks, insurers and asset managers to carry on serving customers in Britain if the UK and EU do not agree to preserve unfettered access between their financial markets after the Brexit transition period expires at the end of 2020. | |
 | One of Portugal’s richest men has attacked huge payouts handed to the bosses of vodka maker Stock Spirits Group (STCK) as a row between the pair intensifies. Western Gate, the investment firm of retail tycoon Luis Amaral, has written to investors in Stock Spirits urging them to back an unprecedented demand for the firm to pay a special dividend to shareholders. Mr Amaral claims that profits are not being fairly shared around. The three-and-a-half page letter, a copy of which has been seen by The Daily Telegraph, says Stock Spirits is blighted by a “culture which seeks to reward management without recognising the modest performance of the underlying business”. Stock Spirits is recommending investors reject the non-binding resolution put forward by Western Gate, which owns 10pc of the company. |
| Fevertree Drinks (FEVR) is being tipped as a takeover target after a warning over weak Christmas trading in the UK sent shares plunging by a quarter. The high-end tonic maker company said it expects profits to be 5% lower in 2019 than during the previous 12 months, sending its shares down 25.6% to £14.83. The stock was worth £32 at the beginning of May last year. Analysts at Jefferies said the firm could be an attractive target for global soft drink titans. They said:”The debate on whether ‘big soda’ may look to add Fever-Tree to strengthen the portfolio offering within the premium mixers sub-category may start to resurface. “Any potential acquisition needs to be considered within the context of expanding sales of [Fever-Tree] internationally.” |
| Intu Properties (INTU) is gearing up for an emergency rights issue next month as it looks to raise as much as £1bn in cash. In a bid to shore up its finances, the troubled Trafford Centre owner confirmed this morning that it is targeting an equity raise alongside its full-year results at the end of February. Intu’s share price has plummeted in value by roughly 80pc during the last 12 months, with the landlord’s rental income taking a hit from tenants closing stores or restructuring their businesses. The equity raise, which involves Intu tapping up existing investors for cash by offering them shares at a cheaper price, is part of the group’s strategy to pay down its £4.7bn debt pile. |
| The beleagured operator of Northern Rail has struck a secret last-minute deal with ministers ahead of a High Court battle over franchising rules. Arriva withdrew its claim against the Department for Transport just hours before a civil trial began to consider whether ministers acted unlawfully by disqualifying four companies from bidding to run train lines. The landmark case, which also includes Stagecoach Group (SGC), Virgin Trains and France’s SNCF, kicked off on Monday. Arriva pulled out at the last moment after reaching a settlement, details of which remain private. The lawsuit had been expected to lift the lid on the commercially sensitive and opaque world of rail franchising for the first time since privatisation in the mid-Nineties. It comes after the four firms shied away from taking on responsibility for a massive railway industry pension scheme. |
 | Countryside Properties (CSP) is braced for a pay showdown at this week’s shareholder meeting. Shareholder advisory group ISS says a £100,000 rise in two years for finance chief Mike Scott is not justified and it raised concerns about unequal pension contributions of bosses and staff. Both ISS and peer Glass Lewis recommend shareholders reject Countryside’s pay report for last year. ISS also recommends only qualified support for the new pay policy. Mr Scott’s salary rose by 17% to £350,000 in October; another 14% rise to £400,000 is proposed from this October. With bonuses, he was paid £915,000 last year; Ian Sutcliffe, who quit as chief executive on Jan 1, earned £2.6m. The firm says it sets starting salaries below market level and raises them subject to performance. Glass Lewis said this did not justify the rise. |
| Sirius Minerals (SXX) has advised its shareholders to accept a £405 million takeover by Anglo American (AAL), calling it the “only feasible option” to save its North Yorkshire mining project. Sirius said that it deeply regretted being unable to fund the mine itself, but it warned that if Anglo’s offer was not accepted there was “a high probability” that it would fall into administration. The proposed deal, which requires the approval of 75% of shareholders, should save hundreds of jobs at Sirius Minerals’s North Yorkshire mine and its processing site on Teesside. Mark Cutifani, Anglo’s chief executive, said that its intentions were “preserving and creating jobs, not cutting them”. Chris Fraser, Sirius’s chief executive, and other senior management will move to Anglo for at least 12 months. |
| BAE Systems (BA.) has bought two American businesses for a combined $2.2 billion in its biggest deal for more than a decade. The British defence company has agreed to acquire a military global positioning system business from Collins Aerospace for $1.9 billion and a tactical radios division from Raytheon for $275 million. The two are being offloaded as part of a $120 billion merger between United Technologies Corporation, which owns Collins Aerospace, and Raytheon. Analysts said that the acquisitions were expensive and opportunistic, but were of a high quality and would boost earnings and cash. |
| Fevertree Drinks (FEVR) was being tipped as a potential bid target last night after a warning over poor Christmas trading sent its shares tumbling by more than a quarter. After five years of beating City expectations, followed by one modest downgrade last November, the premium tonic maker issued its first fully fledged profit warning and the resulting 542p slump in its shares to £14.53 wiped £630 million from its market value. Analysts mulled over the possibility that it could become attractive to the big soft drinks groups. Edward Mundy at Jefferies, the investment bank, said: “The debate on whether ‘big soda’ may look to add Fevertree to strengthen the portfolio offering within the premium mixers sub-category may start to resurface.” |
| Robert Bonnier, 50, made a name for himself as the former chief executive of Scoot, an online directory valued at more than £2.5 billion during the dotcom boom. It has emerged that he has links with , until recently listed on the Nex exchange, which has been buying shares in Sentiance, an automated intelligence company based in Antwerp. It was planning to take a majority stake and to submit a draft prospectus to the Financial Conduct Authority to seek admission to the London Stock Exchange’s main market, but missed a deal deadline. Mr Bonnier does not appear to be directly involved in Mesh, but Nashida Islam Bonnier, his wife, is the largest shareholder, with a stake of almost 10%. Other investors include Chris Akers, who sold Sports Internet Group to Sky for £300 million in 2000. He holds 3%. Mr Akers worked with Mr Bonnier at Swiss Bank Corporation and introduced him to Scoot’s founder. | |
| Housebuilders have been warned they could be stripped of their right to sell Help to Buy homes if they use advertising to make buyers feel time pressured to complete purchases before the current scheme ends next year. Homes England, the government’s housing agency, has written to developers to tell them that advertising “must not use any form of wording that might make potential customers think there is a reason to feel time pressured into making their first home purchase.” A spokeswoman said: “We have always had adherence to advertising guidelines included as a condition of the equity loan funding agreement and all developers are aware that failure to comply with this — and with advertising regulations under the Consumer Credit Act — risks them being suspended from the scheme.” She said housebuilders have been reminded that advertising, marketing and promoting of Help to Buy must be “clear, fair and not misleading” at all times. | |
| Intu Properties (INTU) the debt-laden owner of the Trafford Centre in Manchester and Lakeside in Essex is in talks to raise emergency cash next month in what will be a big test of investors’ appetite for retail property. Intu Properties said that it was discussing with shareholders and potential investors how it might secure new funds by the end of next month. The announcement was prompted by a report in The Sunday Times. Intu did not confirm how much it was seeking to raise, but analysts expect that it will be at least £1 billion. |
 | Analysts at Morgan Stankley issued a gloomy note on ASOS (ASC) yesterday, saying that expectations for a quick recovery from a bad year were too optimistic. Asos’s challenges were greater than many realised, they said, driven by the eye-watering rate of returns that bedevil lots of online retailers, as well as slowing growth in buying clothing over the internet. Shares in Asos should trade at about £20, according to Morgan Stanley, a big discount to the £30.35 at which they closed last night. Its team said that Asos was expected to deliver healthy growth in its most recent quarter when it reports on Thursday, but that didn’t change the picture that it would fall short of present growth expectations for the next few years. |
| M&C Saatchi (SAA) has tried to reassure investors by saying that it had a net cash position of at least £15 million at the end of last year. The advertising group said in a statement yesterday that this was ahead of expectations after the “implementation of improved cash collection processes”. M&C Saatchi said that pre-tax profit was in line with previous forecasts. That is likely to mean a drop of up to 27% year-on-year. New non-executive directors would be announced soon, it said. Analysts at Peel Hunt said that the cash update was encouraging, but they wanted to see evidence of the board being rebuilt. |
 | Tempus – Worldwide Healthcare Trust (WWH): Hold. High-quality investor in a dynamic market sector but made less attractive by its low yield |
 | Tempus – XP Power Ltd. (DI) (XPP): Avoid. Solid business with growth prospects but the shares are well priced |
| Intu Properties (INTU) could seek to raise as much as £1bn to shore up its precarious finances. The heavily indebted firm’s share price has collapsed after high-street groups including Arcadia and Debenhams, – which occupy a lot of space in its buildings, last year resorted to emergency financial restructurings to close shops and cut their rent. It is thought Intu could launch the cash call alongside its full-year results at the end of next month, the Sunday Times suggested. The group is hobbled by a near £5bn debt pile and is trying to whittle it down by selling off properties. Last month the sale of one of its Spanish shopping centres raised €237.7m (£203m). At the end of last year Intu’s chief executive, Matthew Roberts, signalled that a cash call was on the cards but did not give any details about its size or timing. He said: “Our number one priority is to fix the balance sheet. We have a clear plan to do this … these options include disposing of assets through to raising equity, which is also likely to form part of the solution.” |
| A high court battle pitting rail operators against the government is due to start on Monday, with Stagecoach Group (SGC) and others seeking tens of millions of pounds in compensation in a case that could have far-reaching implications for the privatised rail system. Stagecoach is suing the Department for Transport after being disqualified from bidding for three rail franchises last year for failing to comply with demands on pension liabilities. It is expected to argue that the DfT mismanaged the bid process with regards to the Railway Pension Scheme, where a £7.5bn deficit has been identified by the regulator, and was attempting to shift too onerous a responsibility on to private firms. The litigants, which also include Stagecoach’s bid partners Virgin and SNCF, and the rival firm Arriva, claim that franchising contracts, which make the operators responsible for pension liabilities, pose an unacceptable level of risk, whether through strikes or financial collapse. |
| Stagecoach Group (SGC) and Arriva sue over rail franchise bids. Operators say government breached statutory duties on pension liability change |
| Pearson (PSON) latest profit warning is a teachable moment. UK-based education company is still more value trap than takeover candidate |
 | Capita (CPI) is mulling the sale of a clutch of businesses as chief executive Jon Lewis ploughs ahead with a strategy to simplify the company. Lewis is planning to sell the recently restructured specialist services division, which includes an events management arm and translation services, according to reports. Lewis took over at Capita, which has around 63,000 employees, in December 2017 when the company had been buffeted by a string of profit warnings. He wants it to move away from low-value, labour-intensive contracts to focus on hi-tech work, such as IT and providing other services to businesses, so that it stands out against competitors. Capita declined to comment. |
| Intu Properties (INTU) is planning to raise as much as £1billion in cash as early as next month. Intu, which owns Manchester’s Trafford Centre and Lakeside in Essex, wants to kick off a huge rights issue alongside its annual results at the end of February or soon after. Intu has told the City it is considering a number of ‘self-help’ measures. In a trading statement last year it said it was ‘likely’ to raise more cash to balance its books – which are weighed down by a £4.7billion debt pile. |
 | One of Saudi Arabia’s richest families has become a major shareholder in Burford Capital (BUR), the litigation funder under attack from American short seller Muddy Waters. City sources said the Al Rajhi family is backing Mithaq Capital, which late last year bought a 5.1% shareholding in Burford Capital, one of the largest firms on London’s junior stock market AIM. Public documents show Faisal Al Rajhi sits on the board of Riyadh-based Mithaq Holding which, sources told The Mail on Sunday, is linked to Mithaq Capital. Faisal Al Rajhi is in turn believed to be linked to Sheikh Sulaiman Al Rajhi, who is considered the richest Saudi Arabian not a member of the kingdom’s royal family. Forbes estimates Sheikh Al Rajhi, who reportedly has 23 children, is worth $7.7 billion (£5.9 billion). |
 | Britvic (BVIC) will overhaul its executive pay policy after being criticised for excessive bonuses ahead of its annual meeting. Chief executive Simon Litherland was paid £3.45million over the year to September 29, 2019, while new finance chief Joanne Wilson earned £732,000 after working at the company for just three weeks. Wilson’s payout was largely a £706,300 ‘golden hello’ to compensate for the loss of incentives she would have received from Tesco, where she was chief financial officer at its customer data arm Dunnhumby. Litherland’s £623,500 base salary was boosted by £2.66million of ‘performance related pay’, plus a £153,400 pension contribution and other benefits. Shareholder advisory firm Glass Lewis said it has ‘severe reservations’ and urged shareholders to vote against the firm’s remuneration report at its AGM on January 31. It said: ‘Our concerns are heightened by the generous incentive arrangement… with remuneration running consistently in advance of corresponding levels at the company’s peers.’ |
 | The Gym Group (GYM) has revealed membership numbers jumped 9.7% in 2019. The group now plans to expand into smaller towns where a full-sized gym isn’t feasible with between five and eight of these smaller gyms planned for 2020. The low-cost chain, which already has 175 gyms across the country, said that, by December 31 2019, membership had risen to 794,000, from 724,000 in 2018. The group said the aim is to open more sites in towns that may not be economically viable for a full-sized 15,500 sq ft Gym Group outlet, but could work with smaller premises. In addition, Gym Group plans to open 15 to 20 standard-sized gyms in 2020. Gym Group revenues are up 23.6% to £153.1 million, this includes average revenue per member per month – a key measure for the business – up 7.6% to £16.02 in December. Bosses put this down to increased sign-up to the company’s Live It membership programme which includes multi-site access and a bring-a-friend initiative. |
 | GVC Holdings (GVC) has announced ‘excellent’ trading over 2019 despite the impact of new restrictions on fixed-odds betting terminals (FOBTs). The betting giant said earnings before tax and interest for the year to December 31 were at the top end of its expectations of between £670million and £680million. Despite posting lower sales from its high street bookmakers, the firm said trends in its UK retail arm are currently performing ahead of its forecasts. In April, the Government reduced the maximum stake on the terminals from £100 to £2 in a bid to help address problem gambling. Gambling firms including GVC announced significant high street closures as a result, with Ladbrokes ploughing ahead with plans to close 900 shops by April 2021. |
| Dixons Carphone (DC.) will update the market on its performance over the key Christmas period with a trading statement on Tuesday January 21. Investors will be hoping the chain has outperformed its rivals during what has turned out to be a difficult Christmas for retailers. The update comes amid a testing period for electronics retail, with some of Currys PC World’s rivals in the sector posting declining sales over the festive season. John Lewis & Partners said electronics and home technology sales dived 4% for the seven weeks to January 4, despite a jump in Black Friday sales. Meanwhile, retail analyst Nick Bubb said that Dixons Carphone shareholders may have been ‘concerned’ after Sainsbury’s claimed its Argos business ‘outperformed the market’ in consumer electronics. Nevertheless, investors in Dixons have had hopes raised by investment bank Goldman Sachs advising investors to buy shares in the company and raising its target share price from 130p to 170p ahead of the trading update. |
 | MIDAS SHARE TIPS: Property group Harworth Group (HWG) brings prestige to pit clash site of Orgreave. Midas verdict: The UK needs more homes and it needs to boost productivity. Harworth helps on both fronts and its regional focus is a further plus. The company is well managed, finances are sound and prospects are fair. At £1.54 the shares are a buy. |
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