 | Hong Kong raider targeting the London Stock Exchange Group (LSE) may be forced to rack up massive debts as it scrambles to sweeten its £32bn bid in the face of sceptical investors. Hong Kong Exchanges and Clearing has only won the backing of one shareholder among the top 10 since making its audacious offer for the London market (LSE) last month, sources said. City rules state that it must make a firm offer on Wednesday or abandon plans for a tie-up – but it is widely thought the current proposal of £83 per share will not be enough to win over investors. |
 | London will bear the brunt of 10,000 job cuts at HSBC Holdings (HSBA) as the firm battles to slash costs in the face of a slowdown gripping Europe, analysts have warned. Analysts said the axe could “fall the heaviest” in the UK, where the lender employs 40,000 people. Deutsche Bank is cutting 18,000 roles worldwide, while its German rival Commerzbank is slashing 4,300 and 1,600 positions are being scrapped at French lender Société Générale. It is the latest in a wave of cutbacks across the continent as banks grapple with years of ultra-low interest rates which cripple their ability to turn a healthy profit. |
 | SIG (SHI) announced plans to sell two divisions on Monday in an attempt to shore up its balance sheet. SIG has agreed to sell its air handling division to France Air for an enterprise value of €223m (£198m). Kingspan Group has struck a £38m deal to buy the building solutions unit. The sales are part of an effort to slash debts, which stood at £158m at the end of June. The company also plans to return £70m of the total proceeds to shareholders. The announcement didn’t prevent SIG from suffering the sharpest fall on the FTSE 350 after it warned the construction sector’s dismal performance would hit full-year profits. |
 | Embattled banknote and passport printer De La Rue (DLAR) has hired turnaround expert Clive Vacher as chief executive in a bid to revive its flagging fortunes. The company said Mr Vacher has significant experience in turning around failing businesses and will focus on addressing its challenges following sharp criticism from investors and a 47% drop in its share price this year. |
 | Legal & General Group (LGEN), Britain’s first £1 trillion fund manager is close to buying Next Generation Data, a 750,000 sq ft data storage facility in Newport, South Wales. The deal is part of the FTSE 100 investor’s push into digital infrastructure investments as a stepping stone into smart city projects. NGD is currently owned by InfraVia, the French investment fund that until recently owned the tram system in Nottingham. InfraVia put its data centre campus on the market earlier this year, appointing investment bank RBC to find a new owner. |
  | Questor: we dodged a value trap at Pearson (PSON) but fell into one at Marks & Spencer Group (MKS). Time to move on. Questor share tip: Marks & Spencer’s valuation looks tempting but the pace of change feels too slow as the retail revolution continues |
 | Online shareholder chat forums are a “disgrace” and should be shut down, the boss of Sirius Minerals (SXX) has claimed. Chris Fraser said that the Financial Conduct Authority should investigate the bulletin boards where retail shareholders in Sirius and other companies discuss their investments. Sirius has some 85,000 retail shareholders, some of whom have said that they have invested life savings in the mine developer. “No investment adviser with a licence would tell you to do that,” Mr Fraser, Sirius’s chief executive, said, suggesting that some had been poorly advised after turning to the online forums. “They have these people sitting in their basements in their sweatpants, giving them investment advice — unregulated, unlicensed — and people follow them.” Sirius Minerals still sees a light at end of the tunnel. Despite running low on cash the miner continues to work underground on its ambitious project. |
 | Ramsdens Holdings (RFX) has taken advantage of the recent surge in precious metal prices and scrapped some of the gold jewellery that it had been struggling to sell. The company said that the decision would provide a one-off boost of about £600,000 to its first-half profit. Gold is seen as having “safe haven” status for its ability to retain its value even when the economic outlook is gloomy. It has been in high demand recently because of trade wars, slowdowns in leading economies and continued Brexit uncertainty. |
| A turnaround expert with a background in the industrial sector has been appointed chief executive of De La Rue (DLAR). The struggling banknote printer said yesterday that Clive Vacher would oversee a recovery effort intended to end more than year of turmoil at the company. Mr Vacher was previously at Dynex Power, a maker of industrial equipment, and has held senior positions at Pratt & Whitney and Rolls-Royce, the engine makers, in the past. He replaces Martin Sutherland, 50, whose planned departure from De La Rue was announced alongside a profit warning in May. |
| China does not plan to offer key trade concessions demanded by the United States when high-level talks resume this week. Liu He, China’s vice-premier and leading trade negotiator, has told American officials that Beijing will not commit to reforms of Chinese government subsidies and industrial policy, according to Bloomberg. The latest round of trade talks, which are due to begin in Washington on Thursday, aim to put an end to a trade war that began early last summer, with both sides imposing import tariffs on goods worth hundreds of billions of dollars. | |
| The crisis in the construction industry was laid bare by SIG (SHI) yesterday, with the roofing and insulation group warning of rapidly deteriorating activity in the sector. That sent its shares plunging towards eight-year lows in early trading. Yesterday SIG said: “The group has been reporting during the year a deterioration in the level of construction activity in key markets and highlighting a number of key indicators pointing to further weakening of the macro-economic backdrop, notably in the UK and in Germany. This deterioration in trading conditions has accelerated over recent weeks and political and macroeconomic uncertainty has continued to increase. “The recent further weakening of the trading backdrop as the group has entered its traditionally strongest trading months of the year means that the board is now anticipating, in both the specialist distribution and roofing merchanting businesses, significantly lower underlying profitability for the full year than its previous expectations.” |
 | Time Out Group (TMO) turned to investors in a £17.1 million cash-call with intent on feeding a growing appetite for its international branded food and drink markets. The group placed just under 13.5 million shares at a price of 127p each, a tiny premium to its closing price on Friday of 126½p. Using brokers at Liberum Capital to help with the fundraising, Time Out issued stock worth just under 10 per cent of its overall share capital. The company said that it had successfully completed the deal shortly after the market closed last night, by which time its shares had dipped ½p to 126p. |
| has dismissed reports that it is preparing to close almost all House of Fraser stores after the Christmas shopping season. An article in The Sunday Telegraph said that the company was either not paying rent or preparing to end the leases on 52 House of Fraser sites, having left the rest empty, so that Mr Ashley could end his association with the department stores chain more easily. However, a spokesman for Sports Direct said that the “fresh papers from administrators EY” referred to by the newspaper alluded to leases signed before Mr Ashley’s involvement and added that the company had entered into new leases on most of the chain’s stores and that it was negotiating with landlords over the rest of the estate. “As a result of this erroneous misreading of the administrators’ report from EY, staff across the House of Fraser group have today woken up to a false sense of job insecurity,” the spokesman said. “Sports Direct is working rapidly on our investment programme with the House of Fraser brand and it is therefore totally incorrect to assume that there will be large numbers of store closures in the new year. We are taking legal advice with regards to this unbelievable level of misreporting.” Mr Ashley has previously described problems at the business as “nothing short of terminal”. | |
| Substantial cuts could be looming at HSBC’s European and American businesses under plans to shed up to 10,000 jobs. The bank is targeting both regions for cost-cuts because they have been perennial underperformers, in contrast with its fast-growing Asian business. HSBC Holdings (HSBA) employs 238,000 people worldwide, so 10,000 redundancies would be a reduction of 4 per cent. HSBC did not comment on the potential job cuts, which were first reported by the Financial Times. The drive to cut costs has been launched by Noel Quinn who was appointed interim chief executive when John Flint was ousted in August in a move that shocked the City. A large part of the reduction in employee numbers could come from selling HSBC’s retail business in France, which has been put under review. However, the bank is not planning to leave France entirely as it has picked Paris as its European hub after the UK leaves the European Union. |
| Marks & Spencer Group (MKS) Per Una women’s fashion range has been given a new look. “Frilly” is out and “stylishly feminine” is in. The revamp is part of a wider push by M&S to appeal to a younger audience and comes as the company puts a growing emphasis on digital sales. The retailer said that the investment behind Per Una would be across all channels, from billboards and print ads to influencers and social media. |
        | London’s biggest companies are undervalued compared with their overseas peers, according to UBS. It also reckons that investors are starting to come round to the idea of investing in UK-listed stocks, given how cheap they are starting to look due to the recent move in sterling and outperformance of domestic shares. One way of finding unloved but decent stocks, they claimed, was to look at companies whose valuation was low compared with their ten-year median. Based on this, UBS flagged up British American Tobacco (BATS), Barclays (BARC), International Consolidated Airlines Group SA (CDI) (IAG) and Berkeley Group Holdings (The) (BKG) and Persimmon (PSN), two builders. UBS looked to unearth some gems, too, screening for businesses with a high free cashflow yield and a ratio of debt-to-earnings before tax and other charges below its ten-year average. That test threw up names such as WPP (WPP), Taylor Wimpey (TW.), and Polymetal International (POLY), while IAG and Persimmon appear again. |
 | Micro Focus International (MCRO) hit an 18-month low after analysts at Numis slashed their forecasts ahead of a strategic review, the findings of which are due early next year. The company, which supports banks and retailers that use old IT systems, began the review at the end of August, after lowering its full-year guidance. Numis thinks that “everything is up for review”, including the possibility of both asset sales and acquisitions, although the broker believes that margins will be compromised whatever happens as investment in certain parts of the business is raised. |
 | Totally (TLY) extended two contracts with the NHS worth £16.6 million. Its Vocare subsidiary will handle out-of-hours calls for 111 services in southwest London for another year, while a contract for the Scarborough Integrated Urgent Care unit will run on until March 2022. |
 | GVC Holdings (GVC) should consider a move for Stars, the Canadian gambling company, according to analysts at Peel Hunt. Stars struck a deal with Flutter Entertainment (FLTR) last week to create the world’s largest online betting group worth about £10 billion. Peel Hunt maintains that Stars would fit better with GVC Holdings, which has shown that it can bed in new additions. “GVC seems to be doing a good job of optimising the performance of Ladbrokes, Coral, bwin and Party Gaming, the businesses it has acquired,” the analysts said in a research note. Peel Hunt assumes that GVC would have to table an offer about 10% above the C$32.80-a-share bid submitted by Flutter. That would leave the company with an “eye-watering” ratio of net debt-to earnings-before tax and other charges of seven times and cash interest cover of barely two times. However, synergies and strong net cash generation would lift those ratios rapidly, it said. |
 | Tempus – Avon Rubber (AVON): Hold. Strong momentum and acquisitions justify rating |
| HSBC Holdings (HSBA) to axe up to 10,000 jobs in cost-cutting drive. Interim chief Noel Quinn seeks immediate savings from across banking group |
| HKEX races to win support as London Stock Exchange Group (LSE) bid deadline looms. Investors reluctant to back Hong Kong group’s bid until governance issues addressed |
 | BP (BP.) Looney takes oil major into energy transition. New chief must spell out group’s strategy amid climate-change pressure |
 | Investors’ Metro Bank (MTRO) victory could be short lived. After the departure of Vernon Hill, the challenger bank will face more challenges |
 | National Grid (NG.) open to giving up managing UK’s electricity. Company has faced questions over role since August blackout that hit 1m homes and businesses |
| Ex-Barclays (BARC) bankers face Qatar fraud retrial. Three one-time top executives face charges over lender’s 2008 refinancing |
| Some of the City’s biggest investors have thrown their weight behind an ambitious British firm building a high-tech jet engine to fly passengers from London to New York in just one hour at 3,800 mph. The Mail on Sunday can reveal that American activist investor Elliott Advisors and hedge fund tycoon Crispin Odey are among the heavyweights to have ploughed more than £100million into Oxfordshire-based Reaction Engines in a bet that the company will become a pioneer of air and space travel. They join giants of the aerospace industry and under-fire fund manager Neil Woodford on the shareholder register of those taking a long-term punt on the company. | |
| The Hong Kong stock exchange is under pressure to find another £4billion to convince London Stock Exchange Group (LSE) investors to back its takeover bid, it has emerged. Leading shareholders have told The Mail on Sunday that the Hong Kong Exchange and Clearing (HKEX) must sweeten its cash and shares offer, which has already been hobbled by a slump in its share price. HKEX indicated last month it may offer £83 per share – valuing the business at £29.6billion – but the approach was rebuffed by the LSE board. HKEX has until Wednesday to table a formal offer or walk away. |
| The Government could have earned hundreds of millions of pounds if it had backed the recent $3.8billion (£3billion) finance package for Sirius Minerals (SXX). Sirius asked the Government to guarantee up to $1billion of bonds as part of the complex deal. If the Treasury had agreed, Sirius would have paid the Government annual interest estimated at $50million to $100million over the life of the bond – amounting to at least $400million in total. Sirius was forced to abandon the package last month after investors shied away from a $500million bond issue. They are understood to have said they would have participated if boss Chris Fraser had gained Government support. |
 | Nurses, teachers and rail workers struggling to find affordable homes could benefit under an innovative scheme from property group Inland Homes (INL). Its prefabricated two-bedroom units are built at a factory in North Yorkshire then transported on a lorry. Known as Hugg Homes, each one costs £55,000 to build – and is guaranteed for at least 60 years. Annual rents are £8,000 in Southampton but would be around £16,000 in parts of London, providing a tidy income for investors. The well-equipped homes are already generating annual rental income of £500,000 a year for Inland. Its chief executive Stephen Wicks is in talks with the NHS, schools and Network Rail about using surplus land to erect more. |
 | Entertainment One Limited (ETO) has hired an influential shareholder lobbying firm in its £3.3billion takeover by American toy giant Hasbro. The film and TV distribution company has enlisted the services of Georgeson, known for its work in takeovers or battles with activist investors. Hasbro’s bid is expected to win support from Entertainment One’s shareholders. The deal needs the backing of investors holding at least two-thirds of the Canada-based, UK-listed firm’s shares. |
 | Royal Dutch Shell ‘B’ (RDSB) is reversing its attempt to break into the taxi market despite investing millions in an app aimed at boosting drivers’ fares while trying to tackle climate change. The company launched its FarePilot app last year and has jointly invested $8.8million (£7.1million) with the venture arm of Boston Consulting Group. Shell has decided to scale back the project after FarePilot failed to generate enough revenue to make it commercially viable. Boston Consulting, which owned a minority stake, is no longer involved with FarePilot and 19 employees have been made redundant. |
 | MIDAS SHARE TIPS: Ten pin bowling group is in line for returns that could really bowl you over! Midas verdict: Downturns come and go and markets rise and fall but ten-pin bowling seems relatively resilient to economic and political cycles. Ten Entertainment Group (TEG) has delivered consistent underlying growth over the years, the company is well managed and there is a clear strategy for continued expansion. The dividend yield adds to the stock’s appeal. At £2.41, the shares are a buy. |
 | Openreach has shelved an overhaul of its board amid concerns it would give more sway to the parent company. Mike McTighe, Openreach’s chairman, has been seeking to appoint BT’s strategy chief Michael Sherman as an extra director. He has argued in meetings with industry peers that it would strengthen and speed up decision making as the telecoms sector enters a crucial phase of investment in full-fibre upgrades. However, following protests from Sky and others who rely on Openreach’s network while competing with BT Group (BT.A), Mr McTighe last week agreed to put the plans on hold for a year in an attempt to build more trust in Openreach. |
  | The former boss of pub giant Greene King (GNK) turned down a plea from Domino’s Pizza Group (DOM) investors to take over as its chairman, landing a blow for the takeaway chain in its attempt to calm down warring franchisees. Domino’s shareholders from both sides of the Atlantic asked Rooney Anand to take over as chairman. But it is understood that Mr Anand, who stepped down as Greene King chief after 14 years at the helm earlier this year, spurned the approach from the board amid concerns about the recruitment process. Domino’s is on the hunt for both a new chief executive and chairman. |
 | Thomas Cook Group (TCG) bosses were warned ahead of its collapse that creditor claims could top £10bn, as a complex network of off-balance-sheet guarantees unwound. A confidential report, prepared just days before the 178-year-old company’s failure and seen by The Daily Telegraph, lays bare how an insolvency would wreak havoc across the travel sector, leaving huge debts owed to hoteliers, intermediaries and other suppliers. Many suppliers could expect to recoup just 3.4p in every pound owed to them. Bondholders, whose debts totalled more than £1bn, may only recover 2.3p. |
 | Questor: this British tech star is recovering well but looks cheap relative to peers. Buy. Questor share tip: cyber security firm NCC Group (NCC) has fixed its staffing problems, while sales and margins are rising |
| The Monaco family behind some of the tax haven’s most expensive property developments has entered the prime central London market, spending £100 million buying residential property around Mayfair, Knightsbridge and Belgravia. Jacopo Marzocco, 31, who is leading the investment drive, is a third-generation member of the Marzocco family that built the Tour Odéon skyscraper in Monaco, where a penthouse has been marketed for more than £250 million. His company Real Estate, Design & Development (Redd), which develops and manages luxury properties in Monaco, established a London office last year to cater to the needs of the super-rich in Britain. Redd has since built up a portfolio of apartments and mansion blocks in London’s most expensive postcodes, including a £15 million mansion block in Mayfair that was once the headquarters of a Greek shipping dynasty. Lucian Cook, head of residential research at Savills, said: “There’s a growing pool of domestic and international money waiting to exploit a perceived buying opportunity, subject to getting more clarity on what lies ahead politically and economically. Deal or no-deal Brexit, a bottoming-out in the value of sterling should act as the trigger to unlock pent-up demand.” | |
| About 300 workers have been let go by Sirius Minerals (SXX) as the North Yorkshire fertiliser mine developer slashes costs to preserve cash. The future of the company and its ambitious mining project were thrown into doubt last month when its $3.8 billion funding plan failed. Chris Fraser, chief executive of Sirius, told The Times that he hoped to carry out an initial strategic review of the project and alternative funding options by the end of this month. One option could result in Sirius trying to raise a much smaller sum to fund construction of what are perceived to be the riskiest parts first, he said. |
 | Simon Townsend, chief executive of EI Group (EIG), disputed evidence given to MPs that the way pub business rates were calculated was “corrupted” in an attempt to increase rents for giant pub owners. Mr Townsend, 57, was responding to a Treasury select committee inquiry into business rates, the tax on commercial properties. He wrote that “false suggestions” had been made that Ei had played “a major part in the way that the business rates system was agreed, inferring that the system was corrupted”. The disagreement revolves around the calculation of business rates for bars and public houses. The tax is usually based on a property’s rateable value, but in a handful of areas including pubs, cinemas and petrol stations, the tax is linked to a tenant’s turnover. |
 | A new chairman has been lined up at Imperial Brands (IMB) to lead the struggling tobacco company out of its slump, but the appointment is being held up by legal issues. The company’s eight-month hunt for a replacement for Mark Williamson, 61, has taken longer than expected because of the difficulty of finding high-calibre directors willing to oversee a tobacco business. In addition, it had to compete with its arch rival British American Tobacco (BATS), which is also looking to replace its chairman, Richard Burrows, 73. Imperial and BAT have to comply with new corporate governance rules stating that chairmen should resign after serving nine years on the board. |
 | Vodafone Group (VOD) has begun testing a new technology that could reduce its reliance on Huawei, the Chinese telecoms equipment supplier. The mobile phone giant is experimenting with an open access radio system it has developed with Intel, the American chip giant. The kit standardises the hardware and software used in the masts and antennae that carry calls and data. Vodafone, which is trialling the new technology in Britain, hopes it will loosen the grip of Huawei and Scandinavian rivals Ericsson and Nokia on the market and make it cheaper to build networks in rural areas. |
| Mike Ashley’s is believed to be preparing to shut down almost every House of Fraser store at the end of the crucial Christmas trading period as the entrepreneur prepares to call time on his doomed investment in the department stores. With seven of the 59 retail outlets empty, Sports Direct is either not paying rent or preparing to end the leases on most of the rest, making it easier for Mr Ashley to end his association with the retailer, according to a report in The Sunday Telegraph. | |
| Aston Martin Holdings (AML) is under pressure to shake up its board and bring in directors with more experience at listed companies after a disastrous first year on the stock market. The shares have plunged 74% since it floated a year ago, hammered by weaker demand, supply-chain problems and a profit warning that exposed its debt-laden balance sheet. Some investors are believed to be keen for an overhaul to bring in more support for chief executive Andy Palmer. In an interview with The Sunday Times, Palmer, a former Nissan No 2, said it had been a “torrid year”. “It’s been personally uncomfortable. One year on the FTSE through this [is like] a dog’s year. It’s seven years’ worth of experience.” | |
| Greene King (GNK) former boss has been tapped for the chairmanship of Domino’s Pizza Group (DOM) as the delivery outfit seeks to settle a dispute with its powerful franchisees. Domino’s, which is seeking a replacement for Stephen Hemsley, is understood to have approached Rooney Anand, who chairs Café Rouge owner Casual Dining Group. The 55-year-old was paid £850,000 to sign a non-compete clause when he left the pubs group in May, but this is not thought to prevent him taking a role with a food delivery operator. The search is being led by Ian Bull, Domino’s new senior independent director, who has appointed headhunters from Heidrick & Struggles. Hemsley has been with the company for 21 years and is expected to step down before the annual meeting in April. |
| Three former Barclays (BARC) executives will appear in court tomorrow on charges of fraud connected with Qatar’s role in the bank’s emergency fundraising during the financial crisis. The Old Bailey trial, set to last into next year, involves Roger Jenkins, 64, former executive chairman of Barclays Capital, which used to be the investment banking unit; Thomas Kalaris, 63, who was head of wealth management; and Richard Boath, 60, the former head of European financial institutions. |
  | As Nike and Adidas’s high street retailer of choice,JD Sports Fashion (JD.) now leads the ath–leisure field. Over the past five years, its share price has risen more than eightfold to 734p, giving the company a valuation of £7.1bn. A combination of JD’s success and savage high street conditions meant that Footasylum (FOOT) found it hard to turn a profit. So when JD tabled a £90m bid for its rival in March, it looked as if Rubin was returning the favour. Now, though, the Competition & Markets Authority (CMA) has opened an investigation that could expose JD to a level of scrutiny it had not expected. Sick of being deprived of the most desirable new products from Nike and Adidas, JD’s rivals not only want the deal blocked on competition grounds, they want the CMA to review the chain’s close working relationship with the most powerful sportswear brands. “JD has opened up a hornet’s nest. As the CMA investigates, it will realise that this is market abuse because JD is colluding with Nike and Adidas to manipulate the products on offer,” a source claimed. |
| Peer-to-peer lender Funding Circle (FCH) is pursuing the directors of a small property developer after it defaulted on a £250,000 loan. Fusion Interiors (Southeast) took the cash in November 2017 to finance building projects. It agreed to monthly repayments over five years at 13.5% interest. Fusion made 10 payments before it went bust in April. The East Sussex-based firm was founded by John Littlejohn and Steve Murphy 10 years ago. In the year ending June 2017, Fusion posted pre-tax profits of £177,000 on sales of £1.7m. Littlejohn later alleged that Murphy had taken the loan without his knowledge and forged signatures on the contract. A police inquiry did not find “any fraud capable of withstanding a prosecution”. | |
 | A New York court has provided a rare lift for the under-fire litigation funder Burford Capital (BUR) by rejecting a case brought by a Russian oligarch against his ex-wife. The Supreme Court threw out an application by the oil tycoon Farkhad Akhmedov, who had been contesting divorce payments to his ex-wife. Tatiana Akhmedova, who was being funded by Burford, was awarded £450m in 2016 in one of Britain’s biggest-ever settlements. The judgment is a boost for Burford, whose shares tanked after an attack by short-seller Muddy Waters in August. It was also embarrassed when a senior executive was accused of trading sensitive documents for a sex tape in an unrelated case. |
 | Hopes that Nanoco Group (NANO) could become a cog in tech supply chains made it a closely watched stock after it listed on AIM, transferring to the main market six years later. That enthusiasm has faded. Its key American partner — understood to be iPhone-maker Apple — stalled on renewing its contract in June, causing the shares to plunge 77% to 8.5p. They have barely recovered since. All this does not mean that Nanoco is without promise. The quantum dots market is poised to grow from $2bn in 2017 to $8.5bn by 2023, and Nanoco’s sales are expected to have more than doubled to £6.7m when it reports full-year results on October 16; pre-tax losses are set to have narrowed from £7.1m to £4.8m. Analysts at the investment research house Edison said the contract loss was a “major blow” to the company, but stressed that it remained the biggest holder of intellectual property (IP) in its field, with 750 patents. With commercial opportunities not being fully grasped, though, and investors far from convinced, Nanoco needs a new direction. Until the board is brave enough to shake up the management team, it remains a risky bet. Avoid. |
| Lombard – Imperial Brands (IMB) needs some change for the better. News of chief executive’s departure highlights problems the tobacco group faces |
 | ITM Power (ITM) – Linde invests in UK hydrogen machine manufacturer. Group’s move is sign of companies gearing up for potential boom in ‘clean’ gas |
 | Lex – Ted Baker (TED): buttoning up. British fashion retailer’s premium brand status is at risk |
| Imperial Brands (IMB) chief to step down after revenue forecast cut. Alison Cooper to leave tobacco company after a successor is found |
| Ted Baker (TED) shares plunge after ‘brutal’ trading. UK fashion retailer blames rivals’ discounting and unseasonal weather |
 | Spread betting group CMC Markets (CMCX) forecasts rise in annual profits. Business stabilises following tough period of regulatory changes and quiet market conditions |
 | De Beers sold £240million worth of diamonds at its latest auction. Although this was slightly higher than the £233million it made in the previous sales round, it was down 39% compared with the same period of 2018, when it raked in £392million. Anglo American (AAL)-owned De Beers produces around 40% of global diamonds by value and mines for the stones in 35 countries. But demand for rough stones has dived as the diamond market has struggled with oversupply, the economic slowdown in China, a widespread squeeze on luxury spending – made worse by the protests in Hong Kong – and other social factors, such as falling marriage rates. Numis analysts said: ‘The diamond market is clearly weak and this appears to be now impacting the higher end of the market as well, which had previously held up.’ |
| Shares in Ted Baker (TED) tumbled Thursday morning after the fashion firm issued its third profit warning in seven months and slumped to a £23million half-year loss. It said heavy discounting, consumer uncertainty and weak demand for its spring/summer collection all contributed to the losses, which compare to profits of nearly £25million this time last year. The cost of overhauling its struggling Asian business also took a £12million chunk out of the bottom line. Ted Baker simultaneously warned that it would continue to struggle in the second half of the year unless conditions improved. |
| Alison Cooper is quitting Imperial Brands (IMB) after nine years at the helm and 20 years at the company. The announcement of Cooper’s departure comes days after Imperial issued a profit warning amid a backlash led by Donald Trump against vaping in the US. Cooper has not made a direct statement on her plans to leave. Imperial is also hunting for a new chairman to succeed Mark Williamson. |
 | Tower Resources (TRP) has shared key technical and commercial information with an unnamed ‘major international oil company’ in the hopes of securing a partnership. The energy minnow has several oil blocks off the coast of Namibia, in south-west Africa, that it is looking to develop. Chief executive Jeremy Asher cautioned that talks are at an early stage and may not lead to a deal. |
 | Shares in Centamin (DI) (CEY) tumbled after its boss Andrew Pardey handed in his 12 months’ notice after four years in the role, and said production over the first nine months of the year had been lower than expected. Centamin blamed problems with its operations, such as changes to the team working at its main Sukari mine, for the fall. |
 | Stagecoach Group (SGC) inched up as it confirmed it will take the Government to court early next year following its decision to ban the rail and bus operator from three rail franchises. In a trading update, it said its bus division in London had a strong summer and it will cut off a share buyback programme when it has bought £30million worth of shares. It previously said it would buy up to £60million. |
| Metro Bank (MTRO) initially made gains in the wake of an announcement on Wednesday that it was raising fresh funds and that chairman Hill will leave the board by the end of the year. But the charm had worn off by the close of play, with shares sinking. |
| Metro Bank (MTRO) crucial £350m fundraising “comes at a price” as it means the troubled lender is unlikely to return to profit until 2021, City analysts have warned. The bank, which is searching for a new chairman to replace founder Vernon Hill, successfully relaunched a bond issue this week that offered extremely high returns. It also said that Mr Hill – who once said he was so committed to Metro he would “probably die there” – will step down this year and leave the board altogether. Although shares in the lender shot up on the fundraising and American billionaire’s exit, the generous terms of the bond issue will cost the bank about £33m a year. |
| The chequered reign of Imperial Brands (IMB) boss Alison Cooper has finally been stubbed out, and according to outgoing chairman Mark Williamson she has made a “tremendous contribution” at the tobacco giant. Investors will take issue with that glowing assessment. She certainly made a tremendous contribution to remuneration, scooping £30m in total over nine years, but sadly not the same contribution to the share price. The first half of Cooper’s tenure started well enough – the share price doubled – but since then it has halved, leaving the shares roughly where they were when she took charge in 2010. |
| Ted Baker (TED) founder Ray Kelvin has seen £215m wiped off his fortune after the scandal-hit retailer plunged into the red and warned of more pain to come. The fashion label, which has typically been one of the more resilient names on the high street, lost £23m for the six months to the end of August, sparking a sharp sell-off which sent shares tumbling 35.6% to 595p. A share in the business was worth over 2,100p as recently as January. Mr Kelvin, who still owns around 35pc of the business, has made a loss on paper of £215m since he was forced to resign in March over allegations of inappropriate behaviour. He has denied wrongdoing. |
| Anglo American (AAL) – Be Beers has suffered another slump in diamond sales, prompting fears the sector is in the grip of more prolonged slump. The industry giant sells diamonds to selected buyers 10 times a year at events called “sights” at its base in Botswana. Sightholders, or customers, are allocated boxes of gemstones that roughly match the quantity and quality they bought the previous year. Sales in the eighth sight this year mustered just $295m (£239m), a near-40% tumble compared with the same period a year ago, when it fetched $482m. This was on a par with the result in August’s sight, which raised $287m. |
 | Investors raised a glass to Diageo (DGE) on Thursday, with the drinks giant looking set to weather the impact from the United States’ new tariffs against European goods. Traders breathed a sign of relief that a 25% tax levied by Washington would only impact single-malt Irish or Scotch whiskies. Although Diageo is the biggest whisky producer in the world, analysts at Jefferies reckon the Gordons to Johnnie Walker maker will be able to cope with the extra costs in the short term without raising prices. The analysts said the list of tariffed products, issued by the Office of the US Trade Representative, was “less penal” upon alcoholic drinks than had been feared. |
 | St James’s Place (STJ) fails to make its terms and conditions completely clear to customers, according to a study by language experts VisibleThread. It analysed 100 web pages at Britain’s biggest wealth manager, including investment documents, finding one in four sentences were too long, with the meaning of important information lost to complex and jargon-heavy writing. Information around charges was particularly obscure, according to VisibleThread’s Fergal McGovern, who said much of the firm’s investment documents were inaccessible to people with an average level of education. |
| Clients of Citigroup were told to plough into UK blue-chip stocks, which it says look “very cheap”. Despite all the goings-on on the markets of late, Citi analysts expect the FTSE 100 to pick up and break through the 8,000-point barrier for the first time by the end of next year. Brexit fears are overdone, they argue, pointing to the fact that almost three quarters of the Footsie’s earnings come from overseas. The political uncertainty has still held back share prices and as a result Citi has now made the UK its “preferred value trade”. | |
| Anglo American (AAL) lost some of its sparkle after reporting another weak sales cycle for its De Beers diamond business. At its latest “sight” De Beers sold $295 million worth of rough diamonds, compared with $482 million at the same event last year. For the third sight in a row, it offered customers more “flexibility”, meaning they could be pickier with the diamonds they bought and defer purchases until later in the year. Analysts said the drop-off reflected the “tough rough market”, given that many of the cutters and polishers who De Beers sell to have lots of diamonds in their inventory after a disappointing Christmas and New Year last time around. RBC cut its forecast for De Beers. |
 | A bearish research note from analysts at Liberum left a sour taste in the mouths of Restaurant Group (RTN) investors. The Wagamama owner slid after Liberum cut its price target to 150p, claiming that the outlook was “bleak” for its legacy chains such as Frankie & Benny’s and Chiquito. The broker said that Wagamama “continues to outperform”, but it believed visibility was low while “earnings risk remains to the downside” overall. |
| Shares in Ted Baker (TED) fell to a nine-year low after the fashion retailer swung to a loss and issued another profit warning following “very difficult trading conditions”. The unexpectedly grim half-year results spooked investors because the retailer has a long record of weathering the tough industry backdrop better than its rivals. It reported a £23 million pre-tax loss compared with a £24.5 million profit last year for the six months to August 10. Analysts at RBC said that missing City expectations by about £20 million put the company’s previous full-year profit guidance of between £50 million and £60 million out of reach. |
| The chief executive of Imperial Brands (IMB) has left after long-running investor discontent came to a head in the wake of last week’s profit warning. The company said that it was searching for a replacement for Alison Cooper whose leadership and strategy have come under fire from top shareholders and City analysts. Investors have become disgruntled with the slide in Imperial’s share price, which is back to where it was when Ms Cooper was promoted to the top job nine years ago, because of the lacklustre progress from its investment in the e-cigarette market and concerns about aggressive accounting. |
| CMC Markets (CMCX) said yesterday that it will post better-than-expected annual profits as it weathers a regulatory crackdown and benefits from technology partnerships. The firm’s shares closed higher after it said net operating income will exceed £170 million for the full year. Analysts had previously pencilled in about £154 million, while the company chalked up £130.8 million in 2018. Peter Cruddas, chief executive, was pleased with the first-half performance to September 30, saying income in the core spread bets business was only slightly down on last time. |
 | Tempus – Johnson Matthey (JMAT): Buy. Its product for electric vehicle batteries is likely to be potent and is not factored in to the price |
 | Tempus – Kainos Group (KNOS): Hold. Aside from government, private sector and overseas markets offer solid growth |
© Vox Markets 2024. All rights reserved.
Follow @VOXmarketsTerms and conditions | Community standards | Compliance | Privacy and cookie policy
Prices and trades are delayed by at least 15 minutes. Vox Markets takes no responsibility for the accuracy of the information within this site. All times quoted are based on the current time in London, UK.