| Rain-sodden Boxing Day sales dampen high street mood. Fresh blow for retail sector as belt-tightening shoppers stay at home | |
| Invesco is worst-selling fund manager in a year to forget. $5.7bn Oppenheimer deal fails to spur growth while Neil Woodford casts shadow in UK |
| There was more pain for retailers on the last shopping day before Christmas as footfall declined by almost 10%. The number of people going into shops on Christmas Eve fell by 9.4% compared to the same day in 2018, according to figures by Ipsos Retail Performance. Figures from Springboard told a similar story, with the number of shoppers visiting high streets down 8.9% compared with Christmas Eve last year, while shopping centres suffered a 8.4% fall. Retail parks were down 4.7%. Books and stationery stores were the only sector to experience year-on-year growth, with footfall up by 6.9%, according to Ipsos. |
| The Aim market has had its worst year for initial public offerings. Ten businesses floated on the junior market — formerly known as the Alternative Investment Market — this year, including Loungers, the café bar chain, and Argentex, the foreign exchange group, down from 42 in 2018 and 50 in 2017. Between 2004 and 2007 more than 1,000 companies listed, at an average of 260 a year. Aim, which launched in June 1995, is seen as a more suitable market for smaller, faster-growing companies that are likely to tap the capital markets for more money further down the line. However, its popularity has waned. Not only has there been a sharp drop in companies coming to market, but several have left. | |
   | Hedge funds have placed bets worth £1.6 billion against British retailers as the industry braces for further pressure on the high street. Retailers including Morrison (Wm) Supermarkets (MRW), the B&Q owner Kingfisher (KGF) and Marks & Spencer Group (MKS) have been targeted by short-sellers as they bet that share prices in the sector will fall. Morrisons, the supermarket chain, is Britain’s most heavily shorted retailer with 6.12% of its shares, worth almost £300 million, on loan, according to data from the Financial Conduct Authority. Hedge funds including Blackrock, Citadel, Hengistbury, Pelham and Darsana Capital Partners have bet against the company. |
 | Vimto-maker Nichols (NICL) has warned profits could be hit hard next year by a tax on sugary soft drinks in Saudi Arabia and the United Arab Emirates. The Middle East is an important market for Nichols because growing numbers of Muslims break their Ramadan fast with a glass of Vimto. The 50% tax on the retail price of non-carbonated sugary drinks was brought in at the start of December. Merseyside-based Nichols, which is also behind Levi Roots and Sunkist drinks, said it would not be able to determine how badly sales would be affected by the price increase until the end of the Ramadan trading period. However, it warned the impact could result in 2020 profits falling “materially below current expectations”. |
 | The new US owner of the UK defence company Cobham (COB) has pledged to keep jobs and investment in Britain as the government faces increasing criticism for allowing the £4bn takeover to go ahead. The world-leading expert in air-to-air refuelling said its private-equity buyer, Advent International, had committed to maintaining a UK headquarters and to continue funding research and development at its Dorset offices. It has also vowed to keep using the company’s name, which references Sir Alan Cobham who founded the firm in 1934. The deal had been delayed for months after fears were raised that Advent International’s acquisition could undermine national security, because of Cobham’s sensitive military contracts. It has extensive deals with the British military and also manufactures electronic warfare and communications systems for military vehicles. |
 | Endeavour gains extension to secure Centamin (DI) (CEY) deal. UK gold producer asks Takeover Panel to move bid deadline to January 14 |
| Fears for Vimto sales after UAE and Saudi Arabia impose sugar tax. Fruit drink made by UK’s Nichols (NICL) is popular in region, especially during Ramadan |
 | Metro Bank (MTRO) brings in audit expert as another founding director leaves. UK lender takes further steps to overhaul leadership after year of turmoil |
 | Cenkos Securities (CNKS) shares leap after founder takes fresh stake. Andy Stewart left the board of the London stockbroker almost a decade ago |
 | Shares in NAHL Group (NAH) fell after it warned profits will fall by as much as 10% this year. The firm, which provides marketing services to legal firms, said a poor performance in its residential housing division would drag it down. The homes arm connects people buying houses with surveyors and other services, and has suffered a slowdown. It has also struck a £5million deal to exit a joint venture with National Law Partners. |
 | NMC Health (NMC) gave its share price a booster jab yesterday after it opened an independent review to examine claims made by an aggressive short-seller. The beleaguered firm has brought in an unnamed leading accountant to delve into its books and assess whether an attack by US hedge fund Muddy Waters has any merit. The climb came after it shed more than half of its value last week after Muddy Waters said it had taken a short position in the group and raised ‘serious doubts’ about NMC’s finances and relationship with its auditor. In a detailed rebuttal, NMC denied Muddy Waters’ claims.Yesterday Muddy Waters, which is run by short-seller Carson Block, was quick to double down on its allegations, saying such reviews ‘are usually exercises in whitewashing that provide little to no transparency or accountability’. But this did little to dent investors’ relief that the Middle East-focused group could shake off the allegations. |
| Centamin (DI) (CEY) announced after the market closed that it has requested an extension to a takeover deadline until January 14. Canadian group Endeavour approached Centamin with a £1.5billion merger offer this month but only had until December 31 to make a final offer. Both companies said they had not been able to delve into each other’s books enough to make a final decision. Endeavour then asked Centamin to arrange an extension until the end of January, with Centamin compromising by giving Endeavour a two-week reprieve. |
| The private equity firm buying defence company Cobham (COB) has given legally binding guarantees it will protect British jobs after the £4bn deal goes through. US business Advent made the pledge as part of its efforts to secure ministerial approval for the takeover, which has now been waved through by Business Secretary Andrea Leadsom. The sale has sparked fears it could put UK national security at risk because of Cobham’s sensitive military contracts, as well as erode Britain’s industrial base. Campaigners are also concerned at revelations that Cobham will be loaded up with £1bn of debt. |
  | Ryanair Holdings (RYA) has failed in its legal bid to prevent one of its former executives joining a rival airline. Justice Senan Allen ruled in the High Court in Dublin that Peter Bellew was free to join easyJet (EZJ) next month. In his judgment, he told the court that even though the non-compete clause was valid, it was overly restrictive. “I find that the covenant in this case, properly construed, would prevent the defendant from taking up employment with any European airline, including the legacy carriers, and so goes beyond what the plaintiff has shown to be justified,” Justice Allen said. |
| The maker of Vimto has warned a new sugar tax in parts of the Middle East could threaten its profits next year. Nichols (NICL) said it will have to hike the price of the purple soft drink to offset the introduction of a 50% tax on in Saudi Arabia and the United Arab Emirates. Vimto is a favourite in the region during the holy month of Ramadan. The grape, raspberry and blackcurrant-flavoured drink – invented by John Noel Nichols in Manchester during the early 20th century – is a popular choice at iftar, the evening meal at which Muslims break their fast during the period. |
| NMC Health (NMC) has staged a partial recovery after agreeing to launch an independent review. Shares in NMC Health jumped after it said that it would appoint a “leading accounting firm” to scrutinise the allegations from America’s Muddy Waters. It was the first session of positive trading after four days last week that took £2.7 billion off NMC’s market value. The shares remain well adrift of their £25.85 level before the Muddy attack. |
| Nichols (NICL) has warned that profits next year could be far lower than expected as sales are hit by sugar taxes in Saudi Arabia and the United Arab Emirates. Nichols said that a 50% tax recently imposed on the price of non-carbonated sweetened drinks would have a “negative impact” on sales in the year to the end of December 2020. Changing its recipes to avoid the levy is not an option as the tax will apply to all non-carbonated drinks containing natural or artificial sweeteners. Last year Nichols recorded a pre-tax profit of £31.8 million and revenues of £142 million globally. Sales to the Middle East came to £9.6 million, accounting for almost 40% of the group’s international sales. It has sales of about £7 million in Saudi Arabia and the UAE. |
 | Shares in BAE Systems (BA.) rose after analysts at JP Morgan undertook a bit of “year-end housekeeping” and trimmed its earnings forecasts for the next three years by 3% as a result of unfavourable currency movements and higher pension costs. But they lifted their price target to 600p, claiming that BAE was worthy of a slightly higher valuation multiple since the election. “We believe the Conservative victory in the UK election has reduced BAE’s risk profile — a Corbyn Labour government would have brought many risks, in our view — and we now apply a slightly higher target multiple to set our price target,” said David Perry, an analyst at JP Morgan. |
  | Balfour Beatty (BBY) and Galliford Try (GFRD) climbed higher after the construction groups agreed to settle claims related to the Aberdeen bypass. Construction of the Aberdeen Western Peripheral Route was supposed to be completed in the spring of last year but various delays meant that it was pushed back by almost a year, which in turn led to costs spiralling. Matters weren’t helped by the collapse of Carillion, one of the original joint-venture partners and whose demise was thought to have been hastened by failure to complete the Aberdeen project. As a result, Balfour Beatty and Galliford Try argued that the original £745 million budget was no longer accurate, and they have now struck a deal that will see each of them receive about £32 million to cover additional costs. |
| Lion Capital sold 9 million shares, equal to a 9.7% stake in , at 210p apiece. It is not the first time Lion has cashed in some of its investment in Loungers; it pocketed just over £11 million when Loungers floated on Aim in the spring. The initial public offering valued Loungers at £185 million after it sold shares at 200p and the stock hasn’t moved much since then. The shares closed flat yesterday at 210p. | |
 | Chapel Down Group plc (CDGP) shares lost their fizz as it announced the departure of the managing director of its Curious Brew beer and cider brand. After two years Gareth Bath has left to “pursue other interests”, said Chapel Down. |
 | The US private equity giant behind the Addison Lee taxi business swooped for Harwood Wealth Management Group (HW.) in another act of consolidation in the financial planning sector. Carlyle Group agreed to pay £90.7 million for Harwood, which has about £5 billion of assets under management. |
 | Anglo American (AAL) has received a crucial permit to carry on adding mining waste to a storage facility in Brazil, preventing the shutdown of one of its biggest mines. The group had been waiting months for an operating licence for the “tailings” dam at Minas-Rio in Minas Gerais state after increasing the height of the structure. Although the construction work was permitted in 2018 and completed in August, Anglo could not continue using the enlarged facility without the licence. The licence renewal was thrown into doubt in January when the Brumadinho disaster led to renewed scrutiny of tailings dams across Brazil. |
| Ryanair Holdings (RYA) is to appeal against a ruling in the Dublin high court over its attempts to delay the defection of its former chief operating officer to easyJet (EZJ). Mr Justice Senan Allen ruled that Ryanair’s attempt to enforce a “covenant” to prevent Peter Bellew from joining a rival within a year amounted to restraint of employment. Mr Bellew, 54, quit Ryanair in July with the intention of taking up a contract with Easyjet on January 1. His lawyers said that Ryanair’s attempt to enforce the non-compete covenant was “bullying”. He said that he felt like “a dead man walking” after a performance review in March after which it was decided to transfer him to Ryanair’s Austrian operation. |
  | Vodafone Group (VOD) nears full-fibre deal with Goldman-backed telecoms group. Deal would be catalyst for new investments by CityFibre Infrastructure Holdings (CITY) delayed by election campaign |
 | Tesco (TSCO) says it has suspended production at a factory in China alleged to have forced foreign prisoners to help make charity Christmas cards and also withdrawn them from sale. The allegations came to light after the Sunday Times reported that Florence Widdicombe, aged six, from Tooting, south London, opened a box of charity Christmas cards from the supermarket and discovered a plea for help inside one of them. The message read: “We are foreign prisoners in Shanghai Qinqpu prison China. Forced to work against our will. Please help us and notify human rights organization.” It also urged the reader of the message to contact Peter Humphrey, a former journalist who spent 23 months imprisoned at the same Qingpu prison. Florence’s father, Ben Widdicombe, contacted Humphrey, who took the story to the Sunday Times. |
 | Jeff Fairburn, the former chief executive of the housebuilder Persimmon (PSN), has failed to set up a charity almost two years after pledging to do so in an attempt to assuage public and political anger at his “obscene” £85m bonus. Fairburn has not registered a charity with the Charity Commission or made any inquiries about how to set one up, 22 months after he said he would donate a “substantial proportion” of his bonus to a charitable trust. He is also not named as a trustee of any charity in England or Wales. It is not known whether he has donated to any separate existing charity. The revelation that Fairburn appears not to have set up a foundation to donate any of his bonus comes days after an independent review found that Persimmon had built homes so shoddily that it left its customers exposed to an “intolerable risk” in the event of fire. |
| The government has been accused of handing control away after it approved a US private equity firm’s £4bn takeover of the UK defence company Cobham (COB) despite national security concerns. The deal had been delayed since mid-2019 after fears were raised that Advent International’s acquisition could undermine the country’s security. Cobham’s founding family criticised the decision, which was announced late on Friday, and said the government had timed it cynically before the Christmas break to avoid scrutiny. Cobham, which is based in Dorset and employs 10,000 staff, is considered a pioneering world leader in air-to-air refuelling technology. It has extensive contracts with the British military and also manufactures electronic warfare and communications systems for military vehicles. |
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