 | Two companies with substantial interests in Hong Kong have announced figures that underline the damage being inflicted on the economy by the continuing anti-government protests. Burberry Group (BRBY) said its sales were down more than 10% and it had slashed £14m off the value of its 12 stores in the territory. Separately, the airline Cathay Pacific said it expected second-half profits to be significantly below its first half, after a 35% decline in the number of passengers arriving in Hong Kong in October. It is the second time in a month the company has cut its profits guidance. Cathay Pacific is delaying the delivery of four new Airbus A320 aircraft due to “significant pressure” on its earnings. In August, the chief executive, Rupert Hogg, resigned after the company came under pressure from Chinese authorities to rein in employees who were supporting the pro-democracy demonstrators. Burberry’s underlying operating profits slipped 4% in the first half after the one-off £14m charge. Julie Brown, the chief operating and financial officer, said Hong Kong now accounted for 5% of Burberry’s sales, down from 8%. The company temporarily closed some stores during the protests.Gross profit margins for the group will also fall – by 0.5 percentage points more than expected – due to the poor Hong Kong sales, because the company rings up some of its most profitable transactions in the former UK colony. Lower sales affect the value of the group’s properties. |
 | National Grid (NG.) has ploughed a record of almost £2bn into its booming US-based business this year as increasing political pressure raises questions over the multinational’s future in the UK. The energy network provider spent nearly £1.6bn growing its regulated US business over the first six months of the year, and also invested £200m into its US-based renewables company Geronimo. Over the same period, National Grid spent less than £650m running the gas and electricity networks in the UK, where policymakers are squeezing energy company profits and proposals to renationalise utilities have won public support. The London-listed company has built its US presence in recent years amid growing calls for UK utilities to be renationalised. It distributes gas and electricity to businesses and homes in New York, Rhode Island and Massachusetts. John Pettigrew, National Grid’s chief executive, said the record spending was in response to strong demand from north-eastern US states to transform their energy system to run on renewables. There was also healthy investor appetite for infrastructure projects, he said. |
 | Norway’s sovereign wealth fund has blacklisted shares in British security company G4S (GFS) because of the risk of human rights violations against its workforce in Qatar and the United Arab Emirates. Norway’s Council of Ethics, which monitors investments in the country’s £860bn Government Pension Fund Global (GPFG), said there was an “unacceptable risk of the company contributing to systematic human rights violations”. Up to 30,000 staff, mostly working in security and construction, could be affected. The council said it had not officially considered whether G4S had used forced labour – a form of modern slavery – but it said “the company’s practice – in the worse cases – could place workers under constraint”. At the end of 2018, the GPFG owned 2.33% of G4S’s shares, worth around £66m, but has since sold most of them. |
| Lombard – New BHP Group PLC (BHP) boss shows miners need low-carbon leaders. Mike Henry succeeds Andrew Mackenzie as the industry’s class of 2013 moves on | |
 | Lex – 3i Group (III): the heat of Action. Contrarian chief executive Simon Borrows raises the stake in Dutch discounters |
| Lex – Burberry Group (BRBY): check point. Investors should not get carried away by the luxury retailer’s numbers |
| Norway’s $1tn oil fund to sell G4S (GFS) shares after ethical review. Sovereign investor‘s decision follows investigation into group’s Qatar and UAE operations |
| Burberry Group (BRBY) sales up despite hit from Hong Kong protests. Luxury goods group cuts value of stores in territory amid months-long disturbances |
| 3i Group (III) nets huge gains from stake in retailer Action. Buyout group and investors make up to 31 times initial investment following restructuring |
| National Grid (NG.) will escape regulatory fines over power outages that plunged nearly 1m homes into darkness, the company said. Chief executive John Pettigrew said he did not expect energy watchdog Ofgem to hit the business with penalties ‘because everything operated as intended’. The August blackouts also disrupted electricity grids used by traffic lights and rail services. A report by the firm in September blamed the outages on a lightning strike, which it said triggered shutdowns at the Hornsea offshore windfarm and Little Barford gas plant in Bedfordshire. The sudden change in the grid’s energy frequency then triggered the automatic shutdown of a string of smaller generators, making the situation worse. The outages wiped out National Grid’s power reserves, prompting claims it should have been better prepared. |
 | The boss of Young & Co’s Brewery ‘A’ Shares (YNGA) has launched a scathing attack on Jeremy Corbyn, warning a Labour victory in next month’s election would ‘crucify’ the economy. Patrick Dardis, chief executive of Young’s pubs and breweries, said he was even more fearful of a Labour win under Mr Corbyn than the damaging prospect of a hung Parliament and ongoing uncertainty over Brexit. Mr Dardis said: ‘The threat of a Corbyn government is a bigger issue for business than the current uncertainty. ‘A period of a Labour government would crucify the economy and it would take decades to recover from it.’ ‘That’s my concern and it’s as much for my children as it is for me,’ he added. His comments echo what is seen as the view across much of the City, that a government led by Mr Corbyn would be more damaging to UK business than a no-deal Brexit. |
 | Card Factory (CARD) has launched a ‘festive families photocard’ service inspired by the likes of the Kardashians as it looks to offset tough high street conditions. The chain has drafted in celebrity couple Stacey Solomon and Joe Swash to help launch its new service, which will run from pop-up stores across the UK, as well as online. It comes amid a trend for annual family photoshoots set by celebrities such as reality TV stars the Kardashians and as personalised cards become increasingly popular. |
 | Eddie Stobart Logistics (ESL) last night hammered out a rescue deal with private equity firm Dbay. The haulier, best known for its forest-green lorries which traverse motorways, announced that Dbay was prepared to inject £55million of financing. And in a plan designed to revive the firm’s fortunes, William Stobart – the son of Eddie Stobart’s synonymous founder – will rejoin the company as a board director. The deal follows months of uncertainty for Eddie Stobart shareholders, after the company revealed a massive black hole in its accounts in August. It had previously been unable to put a number on how much this scandal would cost, but yesterday began to drop further hints as to the extent of the damage. |
 | More bus passengers paid with contactless and mobile apps rather than cash on FirstGroup (FGP) local bus routes for the first time in its history, the company has revealed. According to bosses, 43% of payments were made by cash, with 45% made through non-cash methods, in the latest push towards a cashless society. The remainder came from ticket sales via third parties. he detail came as FirstGroup said it sank to a £187.1 million pretax loss in the six months to September 30 due to ongoing problems in its US Greyhound coach business. On the company’s preferred underlying basis, which excludes one-off costs, it recorded a pretax profit of £28.7 million. |
| Burberry Group (BRBY) sales dropped sharply in Hong Kong in the first six months of the year, as protests continue to rock the city state. The British fashion house said that sales in the region, which accounts for 8% of its Asian revenue, declined by double digits, and warned that more was yet to come. ‘We expect sales in Hong Kong to remain under pressure,’ the company said in a statement to the market on Thursday. Yet, despite these pressures, and against what some analysts were expecting, the company still managed to increase adjusted operating profit by 14% over the period to £203 million. Meanwhile, revenue grew 5% to £1.3billion. Burberry kept its 2020 outlook broadly unchanged ‘despite incremental pressure on gross margin from the disruptions in Hong Kong’. |
| Strong demand for Italian designer Riccardo Tisci’s collections boosted profits at Burberry Group (BRBY), despite a sharp sales fall in Hong Kong amid ongoing political turmoil. Pre-tax profits rose 11% to £193m for the six months to September while revenue increased 5% to £1.28bn, beating analysts’ estimates. Marco Gobbetti, Burberry chief executive, said he was pleased with the first-half performance, which was in line with guidance despite the decline in Hong Kong. The firm was boosted by the popularity of clothes from Mr Tisci, who was unveiled as creative director last year. |
| Troubled transport company Eddie Stobart Logistics (ESL) said on Thursday night that it has asked the Takeover Panel for extra time to discuss a possible rescue deal with its former owner. The business is considering a cut-price offer from the buyout firm DBay Advisors. “The board of Eddie Stobart has requested that the panel extend the date by which DBay must either announce a firm intention to make an offer for the company … or announce that it did not intend to make an offer for the company,” the statement said. Eddie Stobart said that talks with DBay were ongoing. |
| Despite a change at the top last year, the transport company’s travails with its US Greyhound coaches division continues apace. It’s reassuring to see that months of boardroom wrangling hasn’t dented the ambition at the headquarters of FirstGroup (FGP). The transport operator has declared that it is “intent on realising value for shareholders”. It would certainly mark a change from the previous regime who seemed determined to destroy as much value as possible. The share price crashed 70% during the seven-year tenure of former boss Tim O’Toole who finally got the message and hopped off the bus last November, shortly followed by Wolfhart Hauser, the equally hapless chairman. |
| The energy network “operated as intended” during an August blackout that left more than one million customers without power and caused railway chaos, the boss of National Grid (NG.) has claimed. John Pettigrew said he was unhappy about the turmoil unleashed by Britain’s biggest power cut in a decade. However, he insisted the grid operator had behaved correctly when problems struck, leaving swathes of homes without power across England and Wales, stranding thousands of commuters and plunging Newcastle airport into darkness. The blackout is believed to have been caused by the simultaneous failure of a gas power plant and a wind farm after a suspected lightning strike. |
| The incoming chief executive of mining giant , Mike Henry, has refused to say whether the company will bow to increasing shareholder pressure and quit the Minerals Council of Australia over its position on global heating. Henry also declined to say whether he would be quitting his role as vice chair of the Minerals Council when he takes over from current chief executive Andrew Mackenzie at the end of the year. However, Henry said he endorsed the position taken on climate by the company under Mackenzie, who earlier this year described global heating as a crisis requiring “the biggest global mobilisation since World War II”. | |
 | Royal Mail (RMG) has won a high court injunction preventing the first national postal strike in a decade, which it said could have disrupted postal voting in the general election. The Communication Workers Union (CWU) said it would appeal against the injunction after it was granted in London’s high court on Wednesday. Trade union sources said strike action could still take place before Christmas – a key commercial period for Royal Mail – if members vote again and even if the legal appeal is lost. The strike cannot take place before the general election on 12 December, unless the appeal succeeds. Members of the CWU overwhelmingly backed industrial action in a dispute over job security and employment terms and conditions. Last month 97% voted in favour of action, on a turnout of almost 76%. However, Royal Mail successfully argued that there were “irregularities” in the ballot. |
 | The pugnacious founder-chairman of Wetherspoon (J.D.) (JDW) has taken up arms against the City, turning his talent for polemic away from Brexit and towards the financial establishment. In a lengthy tirade – now a customary feature of Wetherspoon’s stock exchange statements – Tim Martin dismissed UK corporate governance rules as “up the spout” and criticised two major institutions that own a chunk of the company he built. He also lashed out at the investor advisory group Pirc, which has publicly rebuked Martin for spending £95,000 of company money on pro-Brexit literature without first seeking approval from shareholders. |
 | Centrica (CNA) has won a court battle with the energy regulator after the watchdog made an 11th-hour change to price cap calculations, which dealt a £70m blow to the supplier. Britain’s biggest energy supplier pledged to take Ofgem to court last year after the regulator announced a surprise change to the methodology used to set the energy price cap. It said the late change in determining fair energy prices for 11m homes knowingly underestimated the cost of supplying energy last winter, and would lead to an unexpected one-off cost increase of £70m for British Gas. An Ofgem spokesman said the regulator was disappointed by the high court’s judgment but its energy price cap would remain fundamentally unchanged. The judicial review focused on the first phase of the energy price cap regime, which was in effect over the first three months of 2019. Ofgem said it would consider its next steps in light of the judgment. A spokesman for Centrica said the outcome underlines the importance of transparent and rigorous regulatory processes and well-designed regulation. |
 | British Land Company (BLND) has had nearly £600m wiped off the value of its retail empire over six months. It also reported a bigger half-year loss due to torrid conditions in the retail industry. The property company has written down the value of its retail investments by 10.7% to £4.8bn in its latest financial results, which cover the first half of the year. The drop comes after an 11.1% write-down in the 12 months to 31 March. The tumbling value of British Land’s retail properties helped push the company to a loss of £440m, up from last year’s loss of £42m. The firm said the last 18 months had been tough in the retail world as a number of large retailers had collapsed into administration or, like Debenhams and Arcadia Group, opted for insolvency procedures, known as a company voluntary arrangement (CVA), to shut stores and force through rent cuts with landlords. |
 | Losses at Mulberry Group (MUL) have increased by a third after widespread discounting hit sales in the UK. The handbag maker said pretax losses widened to £11m in the six months to 28 September from £8.2m a year before. Sales in the UK, which account for 65% of the business, fell 4% amid challenging conditions and subdued demand from shoppers. Sales fell despite efforts to connect with younger consumers through a series of gigs in pubs and handbags designed by the former Celine designer Johnny Coca. Thierry Andretta, Mulberry’s chief executive, said: “The consumer is more and more waiting, in the market in general, for the promotional sales period. The UK is more and more similar to what’s been happening for a long time in the US.” Mulberry is also among a number of brands affected by difficulties at department stores, which have been discounting heavily in an attempt to attract shoppers. |
 | Lex – Tullow Oil (TLW): fire and brimstone sermon. Climate change means markets need little excuse to dump shares |
| Royal Mail (RMG) wins court injunction to block strikes. Walkouts were set to cause widespread disruption ahead of UK election and Christmas |
| Lombard – British Land Company (BLND) is harder sell than £236m of shop space. Positive spin on offloaded assets does not make shares seem more appealing |
| Lex – Wetherspoon (J.D.) (JDW): Tim Martin/Threadneedle: they spilled his pint. Wetherspoons chairman is right to question the UK’s tangled governance system |
| Tullow Oil (TLW) shares tumble after warning on Guyana projects. Analysis finds discoveries contain heavy crude, making them harder to commercialise |
| Private equity group bids for control of Eddie Stobart Logistics (ESL). DouglasBay proposes injecting £55m of finance in exchange for a 51% stake |
| British Land Company (BLND) retail property loses 10th of its value. Turmoil on UK high street wipes almost £600m from portfolio in 6 months |
 | Retail energy business continues weigh on SSE (SSE) as sale progresses. Company books £489m charge as unit sheds more customers |
 | Taylor Wimpey (TW.) is on course for a £610million payout to shareholders despite tough market conditions. The firm notched up strong sales in the second half of its financial year, despite ‘increasing customer caution’ because of political uncertainty, chief executive Pete Redfern said. The £610million dividend payout would work out at about 18.6p per share. The order book for 2019 so far stood at 10,433 homes, compared to 9,843 over the same period a year ago. |
| Investors in haulier Eddie Stobart Logistics (ESL) are facing a massive loss, as private equity firm Dbay Advisors has tabled a rescue bid which would slash the company’s value. Under the proposals, troubled Eddie Stobart would be transferred to a new company in which Dbay would hold a 51% stake. In return, Dbay would provide the lorry firm with a £55million loan to keep it afloat. But the remaining investors, who together currently own 89% of Eddie Stobart, would be left with just 49% of it. Eddie Stobart said it was considering the proposal, and Dbay was supposed to have either made a firm offer or announced its intention to walk away from the deal at 5pm yesterday. |
| British Land Company (BLND) saw almost £600million slashed from the value of its retail property portfolio as it was struck by the current turmoil facing UK retailers. The shopping centre operator was weighed down by the recent flurry of shop closures and restructurings by major high street retailers in the six months to September. The value of British Land’s shopping centres, retail parks and shops slid by £599million, or 10.7%, to £4.8billion, significantly widening the company’s losses for period. A wave of Company Voluntary Arrangement (CVA) restructuring deals have resulted in a raft of rent reductions, while cost rises have also contributed to the collapse of a number of high street retailers, such as Mothercare. British Land said it expects the retail sector to remain challenging but has seen ‘early signs that some liquidity may be returning’ to some parts of the market. |
| Mulberry Group (MUL) has sunk deeper into the red as fewer shoppers visited its UK stores and it refused to slash its prices. The retailer became the latest to blame tough conditions on the High Street for its woes. The Somerset firm’s shares tumbled as much as 6% as a slowdown in the UK, together with higher investment costs for international expansion, pushed it to a £9.9million pre-tax loss for the six months to September 28. This compares with losses of £8.2million a year earlier. Its policy is not to cut prices, however, with its handbags selling for between £395 and £3,500UK sales dropped 4%, although online sales strengthened. |
| Blustery weather across the UK in the last three months has put the wind in the sails of SSE (SSE) boss Alistair Phillips-Davies, whose company generated more electricity than expected from its wind turbines. Adjusted operating profit rose 14% to £492million in the first six months of the financial year due to ‘generally wet and windy weather’. SSE swung from a £285million pre-tax loss in the first six months of 2018 to a £129million profit this year, and invested £446million in its regulated electricity networks and renewable energy. It is a good set of results for chief executive Mr Phillips-Davies, his first since the company decided to sell its power supply arm to challenger brand Ovo. It leaves SSE primarily as a generator and transmitter of power. |
 | Inspirit Energy Holdings (INSP) rose after it said it was in talks across several industries about how they could use its low-carbon boilers in the solar, renewable and refrigeration sectors. The technology they use was developed by Scottish clergyman Robert Stirling almost 200 years ago. It has also been invited to demonstrate its tech to a Swedish engine manufacturer. Design director Paul Booker said it was a ‘pivotal’ moment for Inspirit. |
 | Tullow Oil (TLW) plunged after samples tested from two wells off Guyana contained heavy crude with a high sulphur content. This type of oil is much more expensive to refine than the light, pure crude found in the US, Saudi Arabia and other hotspots. In August, the City thought Tullow and its partners – AIM-listed Eco (Atlantic) Oil & Gas NPV (DI) (ECO) and France’s Total – had hit the jackpot off Guyana, the only English-speaking country in South America that has become a new focal point for the industry. But the results cast doubt on how much money could be made from Guyana oil, though the company said it is still confident there is light oil to be found. Tullow also cut its annual output forecast for a third time this year (it now expects to make 87,000 barrels per day, compared with guidance of 89,000-93,000 before) amid problems in Ghana. |
 | Cineworld Group (CINE) tumbled after Morgan Stanley brokers started covering the cinema chain with an ‘underweight’ rating and a target price on its stock of 200p. Analysts are downbeat about how strong trading will be next year and warned that the explosion in popularity of streaming services such as Netflix challenge its business model. |
 | A court is due to rule on whether Sainsbury (J) (SBRY) broke the law when it pulled out of building a new £7m supermarket. The grocer was taken to court over claims it breached a contract when abandoning the project for the store in Whittlesey, Cambridgeshire. The retailer decided the scheme was no longer financially viable in 2015 as competition in the grocery arena heated up. The case was heard in the Chancery Division of the High Court in London last week and Judge Simon Monty QC said a verdict is expected in the next few weeks. Bruce Smith is suing the grocer over claims it failed to keep to the terms of a deal with his Whitacre Management development company. |
   | The boss of Wizz Air Holdings (WIZZ) has cast doubt on rival easyJet’s bid to fill the void left by Thomas Cook with a sweeping expansion into package holidays. Wizz chief József Váradi said he was “surprised” at his competitor’s plans, with easyJet (EZJ) poised to reveal details next week after putting its proposals on ice for a year. Thomas Cook’s collapse has triggered a scramble for market share by other players in the industry – but Mr Váradi is sceptical about its future. He said: “I don’t think this packaged holiday industry is going to flourish. I think that the model is outdated. Why should they [customers] pay a premium for pretty much nothing?” Ryanair Holdings (RYA) boss Michael O’Leary sparked anger in October by saying the packaged holiday sector was “screwed” in the wake of Thomas Cook’s collapse. |
 | Former footballers, including pundit Andy Townsend, are suing wealth manager St James’s Place (STJ) over claims it encouraged clients to invest in tax-dodging schemes. The sportsmen, who include ex-Chelsea midfielder Mr Townsend as well as England international Colin Cooper, West Brom goalkeeper Glyn “Boaz” Myhill and Portsmouth defender Linvoy Primus, claim they were wrongly urged to invest in British film projects as part of a tax avoidance plot later ruled unlawful. In a London court, lawyers claimed that half of their 14 clients were advised to invest in the schemes between 2005 and 2006 without being made aware of the relevant risks. The remaining seven are suing over pension-related investments made in small businesses. Both groups are represented by law firm Clyde & Co. |
 | Avon Rubber (AVON) is seeking fresh acquisition targets. The main-market-listed company is currently waiting security approval for its $91m August purchase of US-based body armour business Ceradyne from 3M. However, Avon chief executive Paul McDonald said he is seeking further deals as the company builds up a £200m war chest in an attempt to increase its exposure to the security sector. “We already had masks and respirators, and Ceradyne means with helmets and body armour we protect soldiers from the waist up,” he said. “We’re looking at how technology can integrate that, such as displays on visors so soldiers are better informed about their surroundings.” |
| has named industry veteran Mike Henry as its new chief executive, replacing Andrew Mackenzie who is retiring at the end of the year. The Anglo-Australian miner said Mr Henry, currently head of its iron ore, coal and copper mines in Australia, will take the helm on January 1. The Canadian-born 53-year old has worked at the firm for 16 years and in the mining industry for three decades. He will earn a base salary of $1.7m a year, consistent with that of Mackenzie’s. Ken MacKenzie, chairman, said Mr Henry’s operational and commercial experience, which spans the Americas, Europe, Asia and Australia, was “the perfect mix for our next chief executive”. | |
 | Unilever (ULVR) chairman is stepping down immediately in a surprise decision by the Anglo-Dutch consumer goods giant. Marijn Dekkers will leave after just three and a half years in the role, and is being replaced by former Carlsberg and Maersk chief executive Nils Andersen. Mr Dekkers’ departure comes a year after he scrapped plans to move Unilever’s headquarters from London to Rotterdam in the Netherlands in the wake of a huge shareholder rebellion. He said the decision to step down was a difficult one. He will remain on the board as a non-executive director and said Unilever will go from “strength to strength” under the new leadership. |
| British Land Company (BLND) has become the latest to suffer from the crisis gripping the high street after 10.7% was wiped off the value of its retail estate. The owner of the Meadowhall estate in Sheffield and Drake Circus in Plymouth has seen the value of its retail estate slashed to £4.8bn and its overall estate by 4.3% from £12.3bn to £11.7bn. The business is planning to trim retail to 30-35% of its portfolio within about five years, compared to about 40% now, because its expects online sales to rise. |
 | The Rugby World Cup and dating show Love Island helped bolster viewing figures and advertising revenue at ITV (ITV) over the past three months. The chief executive, Carolyn McCall, whose strategy is to build ITV into a digitally led media and entertainment company said on-screen and online viewing had performed well. Highlights included four of the five highest-rating new dramas this year and the Rugby World Cup, when the audience for the South Africa v England final peaked at 12.8 million. The broadcaster said it had also reached its target of 30 million registered users of its ITV Hub before its target date. |
| Royal Mail (RMG) has lost an appeal against a £50m fine from media regulator Ofcom for anti-competitive behaviour against its largest competitor, the parcels business Whistl. Confirmation of the fine came on the day that Royal Mail went to the high court in a legal bid to prevent strikes by postal workers in the run-up to Christmas. A verdict is expected on Wednesday. Ofcom handed Royal Mail a £50m penalty in August last year after it said the delivery firm “abused its position” by “discriminating” against Whistl. It said the firm had abused its dominant position by penalising wholesale customers that sought to deliver bulk mail such as bank statements and council tax demands door to door. |
| Royal Mail (RMG) loses appeal against £50m Ofcom fine. Tribunal upholds penalty levied in 2018 for price discrimination against Whistl |
| New York governor pressures National Grid (NG.) over gas supplies. Andrew Cuomo plans to revoke UK utility’s certificate to operate in some parts of the city |
 | Lombard – Vodafone Group (VOD) shares disconnect from €1bn earnings boost. Outlook brighter for group’s overall business despite $4bn hit at Indian joint venture |
 | Premier Foods (PFD) shares surge after cake sales gain momentum. First-half revenue in Mr Kipling sweet treats rise while noodles brand more than doubles |
| Rugby World Cup boosts ITV (ITV) advertising revenue. Broadcaster steadied to report modest growth at the higher end of guidance |
 | Retailer B&M European Value Retail S.A. (DI) (BME) writes off German unit as profits fall short. Value of Jawoll impaired after distribution problems |
 | Land Securities Group (LAND) defies Brexit uncertainty with big development push. UK property company has 4 London schemes totalling 1m sq ft of buildings |
| Vodafone Group (VOD) upgrades profit guidance despite India woes. Disposals and German acquisition help offset ‘critical’ situation in joint venture in Asian nation |
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