 | One of Cobham’s major shareholders is backing the aerospace and defence company’s current managers over a £4bn private equity bid for the business. Sanderson Asset Management has indicated it will vote against the management-backed 165p-a-share offer for Cobham (COB) from US-based investor Advent International. Sanderson – which holds almost 3% of FTSE 250-listed Cobham – has written to the family of the company’s founder signalling it will go against the takeover at next week’s vote. Lady Cobham, widow of former chief executive Sir Michael Cobham, is leading a campaign to try to stop Advent’s bid. She fears that US ownership would see Cobham’s manufacturing work relocated abroad, harming the UK’s industrial base, and that the sale could raise national security issues. |
 | Wetherspoon (J.D.) (JDW) boss Tim Martin has sought to quell angry brewers by promising that they will not have to pay for sweeping cuts to the price of a pint. The Society of Independent Brewers (SIBA) wrote to Mr Martin on Tuesday to complain about the pub chain’s decision to reduce beer prices to as little as £1.39 a pint. “Beer sold this cheaply has to be made cheaply,” SIBA chief executive James Calder told Mr Martin in an open letter. “The beer my members make is a quality premium product and should be treated as one. It is brewed with the finest quality ingredients by artisanal people with real skills.” Demanding a meeting with the Wetherspoon’s chairman and biggest shareholder, Mr Calder concluded: “Moves like this signal a race to the bottom to the brewers that supply your pubs.” The decision to cut the price of Greene King’s Ruddles beer at hundreds of its pubs was an attempt to show how “protectionist” overseas tariffs can be avoided under a no deal Brexit. |
 | IP Group (IPO) blamed the crisis engulfing veteran fund manager Neil Woodford for a sluggish first half of the year. The investment company, which backs a mixture of private and Aim-listed early-stage technology businesses, said the “the well-publicised difficulties” experienced by Mr Woodford and his eponymous investment firm had “impacted” market sentiment towards the sector, damaging both company valuations and their ability to raise money. Mr Woodford is IP Group’s second-largest shareholder with a 13.42% stake. Both have invested in a number of the same companies, including biotech outfit Oxford Nanopore. IP Group is Oxford Nanopore’s largest shareholder, while it is estimated that Mr Woodford still owns around 12pc of the private company via both his suspended equity income fund and the Woodford Patient Capital Trust. |
 | JD Sports Fashion (JD.) has cornered the booming market for fashionable athletic clothing. The fortunes of the two high street sports chains couldn’t be more different. In the last five years, shares in Ashley’s empire have slumped two-thirds amid fears that a company once feted by the City is beginning to unravel. Meanwhile, under executive chairman Peter Cowgill, JD Sports’ looks unstoppable. Its share price has shot up eight-fold, meaning it is now worth £6.3bn, four times more than Sports Direct. Just weeks after Ashley stunned investors with a £600m tax demand from Belgian authorities, JD Sports has posted another set of bumper results. The retailer has notched up an astonishing £2.7bn in turnover in the last six months, an increase of nearly 50%. Profits leapt another 10pc to a new record of £130m, and its dividend is being raised 3.7% at a time when a string of blue-chip companies such as BT, Vodfaone, and Centrica, have either chopped or canned shareholder payouts. |
  | Investors hoping that the pain of PPI has passed lit a fire under major lenders’ stocks on Tuesday, with Barclays (BARC) and Lloyds Banking Group (LLOY) adding the biggest boost to the FTSE 100. Both banks announced their final repayments provisions for mis-selling PPI on Monday, with Lloyds setting aside up to £1.8bn, and Barclays up to £1.6bn. The figures – based on a rush of complaints in the days leading up to the deadline at the end of last month – tipped the grand total of PPI payments over £50bn. Barclays closed up 6.9p at 147.68p, its biggest one-day gain since July 2016. Lloyds – frequently cited as the UK’s most-traded stock – closed up 2.1p at 52.3p. Jefferies analysts said the big hit to Barclays was a moment for “cleansing the Augean stables”, adding: “On the prospectively large PPI top up, the third-quarter charge should hopefully be the final charge and bring resolution to a years-long industry phenomenon that became grotesque.” They said from the next quarter, Lloyds would be able to focus on raising its dividend and improving its balance sheet. |
 | Cairn Energy (CNE) was the biggest riser, after revealing it swung back to profit during the first half of the year. The Scottish oil and gas exploration company moved from a $603.9m (£489.2m) loss to a $43.2m profit, as it shook off considerable impairment costs that had devastated its balance sheet. Chief executive Simon Thomson said: “Cairn has seen good progress in the first half of 2019 with the opportunity to develop and deliver multiple catalysts for future growth.” |
| JD Sports Fashion (JD.) launched a broadside at landlords by demanding “fairness and flexibility” for leases as it posted a jump in sales. Executive chairman Peter Cowgill said: “For the healthy retailers… it feels unfair when the adjacent property may be occupied at a substantially reduced rent as a consequence of a company voluntary arrangement. The healthy retailers are going to look for serious levels of rent reductions.” The retailer, which has 374 JD Sports shops in the UK, plans to negotiate with landlords as leases come up for renewal, Mr Cowgill said. The sportswear seller added: “We are very aware of the financial benefit that other retailers appear to get when they downsize their estates and, whilst we have no plans to fundamentally alter the size of the JD store network in the UK at this time, we continue to seek fairness and flexibility in the terms of our leases.” |
 | The chief executive of housebuilder Galliford Try (GFRD) has defended reviving talks with rival about a £1bn tie-up, after aborting a previous attempt to combine two divisions earlier this year. Graham Prothero called the latest deal “highly nuanced”, adding that it had been in the works for nearly two years. “This process actually dates back to 2017 when we first made a cheeky bid for Bovis,” he said. “Discussions in May were only very early stage before some idiot leaked it. That aborted what could have been an interesting discussion.” Galliford rejected an offer from Bovis for its housebuilding arm Linden Homes in late Spring, arguing that the price was too low. If the latest proposal it goes ahead, the two housebuilders would combine Bovis Homes with Linden and move Galliford’s partnerships and regeneration divisions over to Bovis. That would leave Galliford Try to run its construction and investment divisions as a separate, listed entity, rendering the deal a “combination” rather than a traditional merger. |
| Opposition to Advent’s £4 billion takeover of Cobham (COB) has grown after a big shareholder in the British aerospace and defence company said it was minded to reject the bid. Sanderson Asset Management, which owns 2.4% of Cobham, has said that it is “inclined to vote against” the 165p-a-share cash offer from the American private equity firm at an investor meeting to approve the deal on Monday. Sanderson is Cobham’s tenth largest shareholder, according to data compiled by Refinitiv, and its intervention comes after Silchester International Investors raised concerns about the deal hours after the takeover was announced in July. Silchester is the second biggest Cobham investor with an 11.8% stake. It said that it did not regard “the current offer as being compelling” and urged the company to seek other bidders. |
| JD Sports Fashion (JD.) claimed yesterday that its “vibrant retail theatre” is the reason for soaring sales and a boost in profits as the sportswear retailer highlighted its success compared to Mike Ashley’s Sports Direct. The company reported a 6.6% rise in pre-tax profits to £129.9 million for the six months to August 3, better than expected, as sales jumped by 47% to £2.7 billion. In stark contrast with the rest of the high street, it achieved a 10% rise in UK like-for-like sales, which measure income at stores open for more than a year. |
| is poised to become the fourth biggest housebuilder in Britain after revealing that it is in talks to buy Galliford Try (GFRD) housebuilding business for more than £1 billion. Bovis sold nearly 4,000 homes last year, will be able to increase its output to more than 10,000 homes a year if the purchase goes ahead, putting its sales closer to those of Britain’s three leading builders — Barratt Developments, Persimmon and Taylor Wimpey. The deal has been masterminded by Greg Fitzgerald, 55, chief executive of Bovis, who formerly ran Galliford. He established Galliford’s partnerships housing division, which builds homes for housing associations and local authorities. Under the proposed offer, Galliford will receive 0.574 Bovis shares for each of its own, worth £651.4 million based on last night’s closing price. Bovis also will take on £100 million of Galliford’s debt. Unlike the terms of a rebuffed offer Bovis made for the business three months’ ago, Galliford will receive an additional £300 million cash payment. |
 | The resilience of Britain’s electricity system may need to be improved in the wake of the worst blackouts in a decade, National Grid (NG.) has admitted. The group yesterday called for a review of security standards to assess whether it should hold more back-up power plants and said that work to prevent small power plants failing may need to be accelerated. It revealed fresh details of the recent blackouts, including the failure of a valve at a gas power plant and problems with factory settings on Siemens Gamesa wind turbines. More than a million homes were left without power in the blackouts on August 9, which triggered chaos on the rail networks, with 23 trains being evacuated and hundreds cancelled. National Grid blamed most of the transport disruption on incorrect settings on Siemens trains. |
| The gold price could push past its all-time record and progress beyond $2,000 an ounce over the next three years, according to Citigroup. The prospects for gold were strong because of political uncertainties, recession risk and the expectation that global interest rates are going lower for longer, the American investment bank said in a note to clients. It also pointed to strong buying of gold by central banks. Aakash Doshi, a Citi analyst, said in his most bullish scenario that the spot price could reach $2,150 by the end of 2022. Gold is seen as the ultimate safe-haven asset. However, it yields nothing and is costly to insure and store. At present at $1,497 an ounce, it hit an all-time high of $1,918 in August 2011. It fell to as low as $1,060 in December 2015. Since May it has been on a tear, soaring from $1,275 to $1,550 before drifting lower. | |
 | BP (BP.) has recorded Britain’s longest commercial drone flight amid a drive to measure methane leakage from its operations around the world. The oil group said that the drone had flown a 185km (115-mile) round trip from Papa Stour in the Shetland Islands to its Clair platform, where it circled, measuring methane using sensors designed by Nasa for use on Mars. BP group with profits of $10 billion last year, is trying to bolster its green credentials under pressure from investors and climate activists. It has resisted calls to set targets for reducing emissions from customers using the oil and gas it sells and is focusing instead on reducing those produced during its own operations. |
 | Thomas Cook Group (TCG) £900 million rescue deal faces a possible challenge from hedge funds that hold credit insurance on the travel group. According to Bloomberg, hedge funds including Sona Asset Management and XAIA Investment may vote against the rescue led by Fosun Tourism Group, of China, at a creditor meeting next week. |
 | One of the main suppliers of fresh foods to Britain’s big supermarkets saw profits tumble in the first half of this year amid “very challenging” UK market conditions. Bakkavor Group (BAKK) counts Tesco and J Sainsbury among its core customers, reported a 59% fall in pre-tax profits to £19.5 million yesterday as it struggles with fragile consumer confidence and the rising costs of raw materials. UK revenue, which represents just under 90% of the group’s total figures, fell by 0.3% to £813.5 million. Total sales rose 1.4% to £923 million, buoyed by growth in the US and China. Sales were up 2% on a like-for-like basis, but this figure jumped 12.7% to £105.7 million overseas. |
 | BT Group (BT.A) threw open its doors to some of the Square Mile’s finest minds on Monday night, hoping to reassure them that its turnaround plans were on track after a dismal run of late for the shares. The invited analysts failed to toe the company line, claiming instead that the share price was unlikely to recover much in the next few months. Among the concerns is how BT will fund an expanded fibre broadband rollout after Philip Jansen, its new chief executive, recently pledged to reach at least 15 million premises by the mid-2020s, up from ten million previously. Investors fear that a big cut to the dividend is on the way, something mooted earlier in the week by Bank of America Merrill Lynch, which suggested a 40% chop to the payout. Other issues include the possibility of a British ban for Huawei, which is a key supplier to BT and other telecoms companies, as well as Brexit. “BT acknowledged significant uncertainties remain and until there is visibility we think it will be difficult for the share price to re-rate in the near-term,” analysts at UBS said in a research note. Berenberg’s team agreed: “While BT looks increasingly cheap on valuation, it is hard to see the shares performing until the uncertainties are to some extent addressed.” |
| Cairn Energy (CNE) topped the mid-cap leaderboard as it bounced back to profitability in the first half of the year. The oil explorer and producer swung to an operating profit of £49 million in the six months to June as production came in better than expected. It increased its full-year guidance and is now targeting daily production of between 21,000 and 23,000 barrels, up from 19,000 to 22,000 barrels previously. The cost of producing each of those barrels also will be a bit cheaper than first thought. |
 | Investors tucked into Restaurant Group (RTN), following the lead set by Andy Hornby, the new boss of the Wagamama owner. It rose 4¾p to 133¼p after Mr Hornby, the former chief executive of HBOS who joined last month, bought shares worth £300,000. The purchase is unlikely to make much of a dent in the 52-year-old’s pocket, though; his pay package is worth up to £3.9 million this year. |
 | The value of I3 Energy (I3E) almost halved to 30½p after a well at its Liberator oilfield in the North Sea completely missed its target. The company had hoped to use the pilot well to help it to decide where to put a future production well, but drilling failed to find the reservoir that the I3 Energy had thought was there. |
| The Woodford fund suspension crisis has hit valuations and constrained funding, IP Group (IPO) has warned. In its first-half results, IP Group, said that “market sentiment towards the sector in which the group operates was impacted by the well-publicised difficulties experienced by Woodford Investment Management”. Woodford is one of the industry’s most prominent supporters. IP Group’s net asset value was 110.6p per share, down from 115p at the end of 2018 and 121.1p a year ago. Its shares have fallen by about a fifth since the Woodford fund was suspended on June 3. |
 | Tempus – Meggitt (MGGT): Buy. Not overly expensive for a good growth opportunity that is increasingly efficient operationally |
 | Tempus – Paragon Banking Group (PAG): Hold. High-quality lender, but clouded by Brexit uncertainty |
 | BAE Systems (BA.) chief stands by Saudi Arabia deals. Woodburn defends doing business with regime as protests are expected at trade event |
 | Lombard – Intu Properties (INTU) would be £550m bid bargain, but for £1bn debt. Orion unlikely to repeat its success with distressed retail assets in Spain |
 | Chief of BA parent, International Consolidated Airlines Group SA (CDI) (IAG), faces grilling by investors. Willie Walsh to meet shareholders as shares fall and 1,700 flights grounded |
| PPI scandal hits £50bn after claims rise at Lloyds Banking Group (LLOY) and Barclays (BARC). UK banks are latest to report last-minute compensation surge in mis-selling fiasco |
 | Primark owner warns margins will fall next year. Associated British Foods (ABF) says all preparations and contingencies for Brexit are complete |
 | Shareholder approaches Eddie Stobart Logistics (ESL) for possible takeover. Private equity investor DBay eyes makes preliminary expression of interest in trucking group |
| Lex – Lloyds Banking Group (LLOY)/PPI: Horta-Osório’s £50bn legacy. Chief executive miscalculated badly when it came to PPI |
| Mike Ashley has swooped on another struggling retailer despite anger over his buying spree among investors. The 55-year-old tycoon has tabled a bid for jewellery chain Links of London after its owner Greek-based group Folli Follie put it up for sale. Ashley is understood to have made the offer through Sports Direct, where he is chief executive and the largest shareholder with a 63% stake. He is braced for a backlash from investors at Sports Direct’s annual meeting tomorrow amid claims he is losing focus as he seeks to expand his empire. Shareholder advisers ISS and Glass Lewis have urged investors to vote against Ashley’s re-election as a director, with the former warning that Sports Direct’s purchase of House of Fraser has ‘led to concerns about the company’s viability as a whole’. | |
| Primark’s owner Associated British Foods (ABF) has insisted it will not increase prices for customers as it battles falling sales in the UK. The High Street chain’s parent company admitted ahead of its results for the year to September 14 that same-store sales in the UK are likely to fall by 1%. It warned that currency fluctuations would also put pressure on profit margins next year, as the weaker pound and stronger value of the dollar will increase the cost of goods. Primark is known for its cheap fast fashion and homeware including cushions from £3 and children’s pyjamas from £5. ABF expects Primark’s total sales in the UK to increase 2% this year, boosted by shop openings. Sales including international stores are predicted to grow 4%. Primark will have opened 14 stores by the end of its financial year in the UK, Germany, Spain, France, Belgium, the Netherlands and Slovenia. It is looking to open a further 19 next year, including its first in Poland. |
  | Lloyds Banking Group (LLOY) has been forced to abandon plans to return cash to shareholders after being stung with yet another PPI bill of up to £1.8 billion. The lender’s woes mean it is unable to continue a share buyback intended to boost the share price for 2.4m long-suffering investors. It is a major embarrassment for chief executive Antonio Horta-Osorio, who vastly underestimated the scale of the PPI scandal eight years ago when he claimed enough cash had been set aside to deal with it. He has, in fact, been forced to set aside £21.9 billion to cover compensation payments to customers mis-sold payment protection insurance. In a further blow to the industry, Barclays (BARC) warned the scandal would cost it another £1.2 billon to £1.6 billion, taking its total bill as high as £11.2 billion. Royal Bank of Scotland Group (RBS) and CYBG (CYBG) last week set aside extra cash following a spike in claims from customers ahead of the August 29 deadline. Analysts said shareholders were paying for the crisis. |
 | Scotgold Resources (DI) (SGZ) six months away from production at Cononish as gold price hovers near highs. Chief executive Richard Gray explains.’We will be producing our first gold at the end of February,’ he says. ‘We are currently developing and enlarging the existing adit so we can get our mechanised equipment in. We are getting the machinery over. And we are working on the buildings for the machinery.’ First ore will be mined at the end of this year, and a small stockpile will be built up before the first gold comes out in February. Now that production is so close, it seems in some ways as if the timing couldn’t be better. That’s because of the three way dynamic that operates between sterling, the dollar and the gold price. Almost all of the operating costs at Cononish will be incurred in sterling, which is currently very weak against both the dollar and gold. That means that while the likely selling price of the gold that gets produced from Cononish will be high, the only pressure on costs will be downward. |
 | British American Tobacco (BATS) lost ground after its director of scientific research, Dr David O’Reilly, said ‘non-reputable’ vaping firms were responsible for several deaths linked to e-cigarettes in the US. American health officials have approached vaping with scepticism and told the US public last week that smokers should stop using e-cigarettes until probes into five deaths thought to be related to the activity, which is usually seen as a smoking substitute, have been completed. Tobacco giants are relying on vaping to fill the hole left in their earnings by the widespread rejection of smoking in the West. |
 | Components and packaging maker Essentra (ESNT) advanced 9p, to 411.4p, after it bought Spanish group Nekicesa Packaging, which makes leaflets and labels for the pharmaceutical and beauty industry. |
| A surge in PPI claims ahead of the August 29 deadline has pushed the banking industry’s final bill for the mis-selling debacle past £50bn. Lloyds Banking Group (LLOY) and Barclays (BARC) have both been forced to increased their provisions for payouts with Lloyds setting aside another £1.8bn and Barclays coughing up £1.6bn. In July Lloyds unveiled £650m of PPI costs during the first half of the year with an added provision of just over £1bn. This was based on the assumption that the number of PPI claims would continue at the rate of 190,000 a week until the August deadline. However, a sudden surge in claims to between 600,000 and 800,000 a week last month has forced Lloyds to raise its estimate, echoing similar announcements from Royal Bank of Scotland Group (RBS) and Clydesdale Bank owner CYBG (CYBG) last week. Lloyds now expects to take a charge in the range of £1.2bn to £1.8bn, although those numbers are not final as it is still processing the last of the submissions. Meanwhile, Barclays said after the market closed on Monday that a “significantly higher than expected volume of PPI-related claims, enquiries and information requests” would lead it to take a charge of between £1.2bn and £1.6bn in its third quarter. It added: “The final outcome could be above or below the estimated range and will depend on a number of factors including the quality of recently submitted claims.” |
| Shares in Intu Properties (INTU) surged on Monday on hopes that the embattled shopping centre owner could be taken private. Investors piled into the owner of malls including Lakeside in Essex and Manchester’s Trafford Centre following a weekend report that private equity group Orion Capital Managers is trying to round up a consortium to buy Intu. Speculation that Orion, which focuses on property and is led by investor Aref Lahham, is targeting Intu pushed up its shares by almost 20pc in early trading. The gains were later pared back to a 10.5% rise at 40.3p, valuing the company at £548m. |
 | Sage Group (SGE) has confirmed that it is putting its payment processing unit Sage Pay up for sale. The software company, which disposed of its payroll division earlier this year and its US payments software business in 2017, said it was “evaluating potential strategic options” for the business, including a sale. It has hired investment bank Rothschild to find a buyer for the division, which has about 50,000 small and medium business customers, according to Sky News. The valuation of Sage Pay has yet to be confirmed. |
 | Travelodge has stolen a march on arch rival Premier Inn by increasing sales despite tough market conditions. Comparable revenue per available room – a key metric in the hotel sector – rose 0.6% in the first six months of the year, although the figure slipped to be just 0.1% higher in the three months to June. The market shrank by 2.6% and 1.8% respectively. Boss Peter Gowers said: “More and more people looking to make their travel money go further in these uncertain times.” Total half-year sales rose 6% to £337m and earnings edged up by £1m to £45m, although pre-tax profit was not disclosed. Travelodge’s ability to shrug off what Mr Gowers called “challenging conditions” comes as Premier Inn, owned by Whitbread (WTB), grapples with falling like-for-like sales. They tumbled 3.7% in the first three months of the year – a fall blamed on “ongoing political and economic uncertainty in the UK”. Premier Inn, which has 785 hotels compared with Travelodge’s 584, appeared to have left its rival in wake in recent years. |
  | Healthcare stocks were the worst performers on Monday, as pharmaceutical giants AstraZeneca (AZN) and GlaxoSmithKline (GSK) both suffered following reports that American lawmakers plan a legislative crackdown on runaway prescription drug prices in the US. In a rare display of co-operation, Donald Trump’s White House and politicians in the Democrat-controlled House of Congress are both tackling the issue, in which companies ramp up prices of essential medicine. |
 | Investment vehicle HGCapital Trust (HGT) also climbed on the mid-cap index after posting solid first-half results and lifting its dividend by 12%. Investec initiated coverage of the firm with a buy rating, while Liberum analysts said: “The company has continued to see consistent double digit growth across the portfolio and we see little reason to believe this will not continue in the near-term.” |
| A string of new Primark store openings have kept the tills ringing – but not quite enough to stave off a 2% slide in like-for-like sales. Ahead of annual results due in early November, Associated British Foods (ABF) said it expected the fast fashion retailer’s total sales to rise 4% after opening 14 new stores for the year to mid-September. Over the next year, ABF plans to add one million square feet of new space to its store estate. The group also warned its margins would continue to be hit by the weak pound, rising costs and discounting. However, finance director John Bason said ABF would rather take a hit to profits than pass on price rises. “Consumers can comfortably expect no price increases. We are managing the decline in the pound and we accept it will affect margin and take that on board ourselves,” he said. |
 | Questor: using Tesco’s mortgage sale as a yardstick, OneSavings Bank (OSB) could double in value. Questor share tip: the supermarket unloaded its mortgage book to Lloyds last week at a price that makes the ‘challenger’ bank look cheap. Hold. |
| Two of Britain’s biggest banks face a bill of more than £3 billion after a last-minute rush in payment protection insurance claims, pushing the total cost of the scandal above £50 billion. Lloyds Banking Group (LLOY) and Barclays (BARC) yesterday became the latest lenders to count the cost of a surge in compensation claims and requests for information before the August 29 deadline, which was imposed by the Financial Conduct Authority. The banks joined Royal Bank of Scotland Group (RBS), CYBG (CYBG) owned Clydesdale Bank and the Co-operative Bank in reporting far more complaints than expected last month as individuals and claims management companies rushed to make contact before the cut-off. Lloyds said yesterday that it had suspended its programme to buy back shares and that it would take a new provision of between £1.2 billion and £1.8 billion alongside its third-quarter results next month. That could bring its total bill for PPI to £22 billion. Barclays said that it would add £1.2 billion to £1.6 billion to its provision, on top of the £9.2 billion that it had already provided. |
 | Plans to almost double revenues at Abcam (ABC) in the next five years divided opinion in the City yesterday amid fears that they could amount to “jam tomorrow”. The Cambridge-based biotechnology company announced an investment drive to increase revenue to between £450 million and £500 million by 2024, including by increasing market share in its core antibodies market, expanding into adjacent products and continuing to upgrade its IT systems. The five-year growth plans would be funded by an increase in capital expenditure to between £175 million and £225 million and a weakening of profit margins, the company said. Shares in Abcam fell as investors expressed concern that the plans would hit profits in the short term and as analysts failed to reach a consensus on the company’s prospects. |
| The conglomerate behind Primark has warned that the weaker pound is set to put profit margins at the fashion chain under pressure in its next financial year. Associated British Foods (ABF), which generates half its sales and profit from the retailer, said that the strengthening of the US dollar and decline of sterling would increase the cost of goods. The alert, issued in a pre-close trading update for its financial year ending September 14, pushed shares in ABF down 49p to £23.05. John Bason, 62, finance director said that it would not pass on the costs to shoppers, meaning that there would be an inevitable hit to profit margins, but the business would look to mitigate some of the impact, including via lower material costs for its garments. |
| A private equity firm that previously owned Eddie Stobart Logistics (ESL) has made a bid approach to the troubled trucking company. Eddie Stobart, which was left reeling by an accounting crisis and the abrupt exit of its boss and which had its shares suspended last month, said yesterday that it had received a “preliminary expression of interest” from the Isle of Man-based DBay Advisors about a possible takeover. DBay, which is Eddie Stobart’s third biggest shareholder, has until October 7 to make a firm offer or walk away. The potential bid could be a fillip for Neil Woodford, the troubled fund manager, who is Eddie Stobart’s largest investor with a 23%. |
 | The world’s largest education publisher has been hit with a class action lawsuit after computer hackers accessed the personal information of an estimated one million American students. Pearson (PSON) stands accused of being slow to identify the breach and of failing to raise the alarm quickly enough. According to legal filings, the hack was in November last year, but Pearson did not become aware of it until the FBI law enforcement agency informed it in March. Parents and students were not told until July. The plaintiffs — a mother and daughter from Illinois — said that the British company had “concealed its knowledge” of the data breach from victims. |
 | The chief executive of Berkeley Group Holdings (The) (BKG) has sold shares worth almost £12 million days after the housebuilder suffered a revolt over bosses’ pay. Rob Perrins, 54, cashed in almost a quarter of his stake yesterday, a stock exchange filing showed. The move came after an embarrassing annual meeting for Berkeley Group on Friday, when 43% of voting investors opposed the director’s pay policy, despite Berkeley’s efforts to curb executive pay. The group has proposed scrapping its annual bonus and forcing bosses to keep shares paid out by its long-term incentive scheme for an extra two years. Management will have to re-earn shares that have not vested by 2021 over a four-year period. However, shareholder advisory groups such as Institutional Shareholder Services and Glass Lewis said that the measures did not go far enough. |
| Profit-taking pushed AstraZeneca (AZN) 251p lower to £70.04. Its shares have weakened since hitting a record high of £75.33 this month. Astra was also knocked by news that Nancy Pelosi, Speaker of the US House of Representatives, is to unveil drug pricing legislation. GlaxoSmithKline (GSK) closed down 36p at £16.79¼. |
| Intu Properties (INTU) jumped 3¾p to 40¼p after a report that Orion Capital Managers, a private equity firm, was examining a deal for the shopping centre owner. |
 | TalkTalk Telecom Group (TALK) slipped 1¼p 103½p despite Sir Charles Dunstone, executive chairman of the telecoms group, lifting his stake from 28.6% to 29.2%. He spent almost £6.3 million on the shares, according to a stock exchange filing. |
 | Spire Healthcare Group (SPI) was buoyed by upbeat analyst comment and closed 4¾p higher at 116p. Analysts at RBC Europe started their coverage of the private hospitals group with an “outperform” rating and told clients that Spire could surpass the market’s revenue forecasts for 2019. They set a 149p price target on the stock. |
 | Tempus – Standard Life UK Smaller Companies Trust (SLS): Hold. Strong defensive portfolio well positioned to endure the slowdown that is likely to come after Brexit |
 | Tempus – PayPoint (PAY): Buy. Growth of higher-margin activities will offset declines |
| National Grid (NG.) and NY governor tussle over energy supplies. UK utility refusing to connect new gas customers after state denied a permit for a supply pipeline |
 | Marks & Spencer Group (MKS) exit reflects shifting sands of FTSE 100. Departure leaves UK’s leading stock index with barely a quarter of its founder members |
 | Standard Chartered (STAN) faces a high-profile court battle that will lay bare allegations it helped facilitate deadly attacks on British and US troops. The 166-year-old bank is accused of helping companies connected to Iran’s Revolutionary Guard and enabling the pariah state to sidestep sanctions. The Mail on Sunday revealed the impending legal battle earlier this year and a court hearing over a potentially embarrassing whistleblowing claim for compensation under US law is expected in the coming months. Briton Julian Knight, a former senior figure at Standard Chartered, has agreed to go public for the first time after years of legal battles in the US hit the bank with fines of nearly $2 billion (£1.6 billion). The former RAF pilot told of his reaction when he first realised the bank was breaking sanctions: ‘I was angry. ‘I served in the military for eight years and I was taught that terrorists were bad people yet here was a British bank allowing Iran to circumnavigate sanctions.’ |
 | Morrison (Wm) Supermarkets (MRW) is making aggressive price cuts in an attempt to win back customers, it has been claimed. Analysis of Kantar data by Barclays suggested that 46.2% of Morrisons’ revenues in the 12 weeks to August 11 came from discounted goods. This compared with the sector average of 32.3% and was 5.3 percentage points higher than any other retailer. A sharp rise in promotions at Britain’s fourth largest supermarket comes amid warnings that it is vulnerable to a foreign takeover, with a slump in its share price and the weak pound making it a target. |
 | City sources said Premier Foods (PFD) had appointed Wall Street bank Morgan Stanley to run a ‘strategic review’ under pressure from activist investors. Its share price has nearly halved since directors rejected a 65p-a-share takeover bid from America’s McCormick in 2016. Last month, Premier Foods announced a boardroom shake-up following a nine-month search for a chief executive. It named the head of its UK arm, Alex Whitehouse, 50, as its new chief executive, and appointed Colin Day, a former Reckitt Benckiser finance director, as its new chairman. Premier Foods looked at selling its Ambrosia rice pudding brand, but abandoned the sale in February after failing to get a good price from bidders. A spokesman said: ‘The strategic review is ongoing and we will update the market when it is completed.’ |
| The £900m deal to save Thomas Cook Group (TCG) has been threatened by a row over pensions. Trustees of the travel company’s retirement scheme have demanded reassurances that annual contributions of £25m will continue, amid a takeover being mounted by China’s Fosun and creditors. The pension trustees could withhold backing if funding assurances are not received. Thomas Cook’s board is meeting on Wednesday to discuss the crisis. |
| Wetherspoon (J.D.) (JDW) has slashed the price of a pint of beer in a bid to demonstrate the benefits of Brexit. The pub chain, run by Brexiteer Tim Martin, has cut the cost for a pint of Ruddles ale by an average of 20p across almost all of its 1,000 watering holes. Martin said it was an example of how leaving the customs union with the EU could reduce prices. He said: ‘Provided we leave the Customs Union on October 31, the Government can end these protectionist tariffs, which will reduce prices in supermarkets and pubs. In order to illustrate this point, Wetherspoon has decided to reduce the price of Ruddles bitter, brewed by Greene King.’ |
| MIDAS SHARE TIPS: Want a rock solid shelter? This new investment trust aims to track down safer global assets. Midas verdict: In an uncertain world, could prove to be a rewarding, long-term investment, delivering solid annual income and a bit of share price growth too. At £1, the shares look attractive. | |
 | MIDAS SHARE TIPS UPDATE: Bricks are in short supply in the UK and brickmaker Michelmersh Brick Holdings (MBH) is on the rise. Midas verdict: Michelmersh is a well-managed firm, with a clear growth strategy focused on making premium bricks, improving efficiency and nurturing relationships with the people who matter. The company is not immune to economic shocks but it has shown resilience in the past and can do so again, if need be. At 95p, the shares are a strong hold. |
| When David Potts arrived at Morrison (Wm) Supermarkets (MRW) as chief executive almost five years ago, he inherited a bloated company, inadequately equipped to fend off the threats posed by the German discounters Aldi and Lidl. He has, by and large, managed to turn around the fortunes of the smallest of the UK’s big four supermarkets, but by his own admission there’s still plenty to go for. Investors do not seem to agree, however. The grocer’s interim results on Thursday are also expected to be underwhelming. Bruno Monteyne, a retail analyst at Bernstein, describes Morrisons as a “pretty stable business; it’s not like it’s falling apart. It has been well-managed for several years. There is some further improvement that could come from wholesale and a few other things, but it isn’t the upside story of Tesco, which was in bigger trouble and it has more [profit] recovery potential and investors like that.” Industry chatter suggests it is has become a cheap acquisition target, especially after the recent £2.7bn swoop on pub owner and brewer Greene King. Similarly, the Bradford-based supermarket has an attractive store portfolio, the majority of them freeholds. There is also Morrisons’ existing relationship with Amazon, which helps it sell some of its products online. The tech giant has been frequently touted as a potential suitor. |
 | Dechra Pharmaceuticals (DPH) is set to launch a pain relief medication for piglets, lambs and calves that promises to significantly improve welfare for these animals. It will launch Tri-Solfen in the UK and Europe and then the rest of the world in the next 18 months. It is a gel that contains both a short-acting and a long-acting anaesthetic, adrenaline to stop blood flow and an anti-infective to promote healing and create a protective barrier against infection. It is inexpensive and easy to use as it can be sprayed on to a wound by farmers without the help of a vet. “It’s a very simple idea but hugely effective,” said Ian Page, chief executive of Dechra. “There are injectable pain killers and some other topical anaesthetics, but nothing specifically developed for animals. The bizarre thing about this is that for many years I don’t think we realised how painful these procedures are to animals and now animal welfare is becoming more and more important.” |
 | One of Britain’s biggest car dealers has sounded out restructuring experts as it grapples with plummeting sales. Pendragon (PDG) conducted a beauty parade of financial advisers earlier this year, only for the process to be paused in the wake of the shock departure of chief executive Mark Herbert in June.Car dealers such as Pendragon are at the centre of an existential crisis facing the automotive sector. They are exposed to huge risks from only a small downturn, running big balance sheets but generating only wafer-thin profit margins. Figures published last week underlined the car industry’s ongoing downward spiral. New car sales fell 1.6% in August despite a flood of dealer registrations prior to the Government’s low-emissions deadline. It is understood that Pendragon had narrowed the field of restructuring advisers down to a “couple of firms” including Alvarez & Marsal, the boutique consultancy headed up by former KPMG advisory head Richard Fleming. |
 | Sainsbury (J) (SBRY) is preparing a major overhaul of its bank as it pursues a “back to basics” approach following its botched attempt to merge with Asda. The grocer is understood to be examining options for its loss-making financial services arm as it prepares to lay out a new strategy to City analysts and investors later this month. Sainsbury’s could seek to offload its mortgage book, as rival Tesco did last week. One senior source close to Sainsbury’s suggested such a move was more likely than a sale. Sainsbury’s Bank has been weighing on the supermarket chain’s profits and consuming cash for years. It made a loss of £34m last year compared to a profit of £25m the year before. Its total income edged up 1.8% to £332m from £326m. |
| Thomas Cook Group (TCG) £900m rescue is under threat after pension trustees made a string of demands on the troubled travel agent. The retirement fund wants a guarantee that annual contributions of more than £25m will not be cut in exchange for support of a takeover led by Fosun – the Chinese owner of Premier League football club Wolverhampton Wanderers – banks and bondholders. While “substantial agreement” over the rescue of the 220-year-old company was achieved at the end of August, talks have been ongoing with other stakeholders, whose support is needed for the takeover to go ahead. A package of demands was made by pension trustees at a meeting earlier last week, according to Sky News, which first reported the stand off. |
 | Greene King (GNK) defended its decision to give former chief executive Rooney Anand an £850,000 payoff after it suffered a shareholder rebellion. Nearly a third of investors voted against the remuneration report at its annual meeting on Friday. The FTSE 250 brewer said it was “disappointed” by the result. Shareholder advisory firm ISS had recommended that investors lodge a protest vote over the payment to Mr Anand to prevent him joining a rival company after he left in May. |
 | Questor: could Morgan Sindall Group (MGNS) follow Carillion into oblivion? Its cashflows suggest not. Buy. Questor share tip: the construction sector’s thin margins did for Carillion and Interserve but Morgan looks much better run |
| Stripping National Grid (NG.) of its responsibility for keeping the lights on would cause “massive” disruption to the wider energy industry, its boss has claimed. The utility giant is under scrutiny after blackouts on August 9 and Kwasi Kwarteng, the energy minister, said last week the government would look again at whether it should keep its role as Britain’s Electricity System Operator (ESO). Speaking to The Times shortly before Mr Kwarteng’s comments, John Pettigrew, National Grid’s chief executive, insisted the current construct was a “sensible structure both for the industry and National Grid”. Mr Pettigrew, 50, said there would be “a massive amount of disruption in the industry if you move to an independent system operator”. |
| The rivalry between Britain’s two biggest budget hotel operators is to crank up after Premier Inn started trialling premium rooms aimed at the corporate market. Premier Inn, owned by Whitbread (WTB), has given over an entire floor in two of its London hotels, in Islington and Holborn, to a new class of bedroom carrying the working title Premier Plus and costing an extra £15 to £20 a night on top of the price of a standard room. The move follows the launch a year ago by Travelodge, its biggest rival, of Super Rooms with “additional creature comforts” including a new decor, a Lavazza coffee machine, a choice of pillows, a more powerful shower and “a comfy armchair to relax in”. By the end of this year, it will have 1,800 SuperRooms across its 584 hotels. |
| Shareholders of Thomas Cook Group (TCG) are likely to be told within days that they will be left with nothing from the impending £900 million rescue deal with China’s Fosun and its lenders. Although the travel company’s board is pushing for its ordinary shareholders to be given an equity “stub” or “tip” to help smooth the deal, one well-placed City source said the odds of that happening were “almost zero”. |
| A private equity tycoon is exploring a deal to take the struggling owner of the Trafford Centre and other retail properties private as it faces a £1bn debt crunch. Orion Capital Managers, run by Aref Lahham, is understood to be in the early stages of seeking partners for a buyout of Intu Properties (INTU), which has been battered by a string of insolvencies from retailers such as Debenhams and Sir Philip Green’s Arcadia Group. Intu’s rental income fell by almost 18% in the six months to June and the value of its portfolio, which also includes Lakeside in Essex, was slashed by 9.6%. |
| Thomas Cook Group (TCG) is at odds with the trustees of its pension scheme — a row that could derail a £900m rescue deal. The airline and tour operator’s pension trustees have demanded better terms, including a stake in the restructured business, in exchange for backing the deal, Sky News reported. The trustees also want guarantees about funding, and for its new Chinese owners to continue the £25m annual payment into the pension scheme. Thomas Cook, led by chief executive Peter Fankhauser, is fighting for survival. Sluggish bookings due to Brexit and its £1.2bn net debt pile have spooked investors. |
 | Redrow (RDW) residents rebel as shoddy workmanship ruins home dreams. Some of the problems were fixed shortly after they bought the house in November 2017, others have remained. They commissioned an inspector’s report into the snags last month, but said that Redrow ignored him. As housebuilders post record sales and profits — a stark contrast with the second-hand market, which has been hit by increases to stamp duty, a relative lack of government support and Brexit uncertainty — the quality of the homes they sell is coming under intense scrutiny. |
| Royal Bank of Scotland Group (RBS) was flooded with payment protection insurance claims on deadline day last month, in an ominous sign for banks as the PPI bill nears £50bn. RBS saw an unprecedented number of claims on August 29 — about 200,000 — higher than the total number in the four months to the end of April, sources said. The taxpayer-owned bank was forced to announce last week that it would make a provision of up to £900m in its next quarterly results in October. With the average payout worth £2,000, RBS’s bill for the final day of claims alone could hit £400m. Tony Shields, chief executive of claims manager Crystal Legal, said the frenzy in July and August “was like we had the last tin of beans on Brexit day”. |
| Morrison (Wm) Supermarkets (MRW) is set to reveal a dip in sales as supermarkets continue to grapple with the challenge posed by Aldi and Lidl while drawing up plans for a no-deal Brexit. The Bradford-based chain is poised to report a 2% drop in like-for-like second-quarter sales on Thursday, with the fall down to an unfavourable comparison with last year’s figures, boosted by hot weather and England’s run to the semi-final of the football World Cup. Analysts expect flat pre-tax profits of £192m. Supermarkets have been put under pressure by the rise of Aldi and Lidl, which have embarked on aggressive store-opening programmes. They now have a combined market share of 14%. Morrisons, Britain’s fourth-biggest grocer, has seen market share fall from 10.3% a year ago, to 10.1%, according to researcher Kantar. |
| Wetherspoon (J.D.) (JDW) is set to report robust sales on Friday. Analysts expect revenues of about £1.8bn at Tim Martin’s pub chain, which has promised to cut prices after Brexit — a 6.5% increase on £1.7bn the year before. However, profits are likely to be squeezed by pressures such as higher wages. Investec forecasts a slip in pre-tax profits from £107m to £102m. |
| founder Mike Ashley faces a clash with investors at the retailer’s annual meeting on Wednesday as shareholder advisers urge them to kick him off the board. Glass Lewis and ISS have recommended investors do not re-elect Ashley, 54, as Sports Direct has been landed with a £605m Belgian tax bill, failed to appoint an auditor, and embarked on a botched spending spree. The calls are unlikely to succeed as Ashley owns more than 60% of the shares. | |
 | InfraStrata’s Antrim salt caves plan is peppered with hope — but could drown. Vast Permian salt deposits buried a mile under the Islandmagee peninsula on Co Antrim’s east coast date back more than 250m years. Infrastrata (INFA) has been targeting the site for a decade with a plan to dissolve the salt and create caverns to store up to 500m cubic metres of gas that could be extracted and replenished quickly to heat and power millions of homes. InfraStrata’s project to create seven caverns will cost up to £300m — roughly 50 times the company’s valuation of about £6m. Its prospects got a boost in June when Vitol, the oil and gas trading giant chaired by Ian Taylor, signed a deal to buy the entire capacity for 12 years, subject to conditions. Terms have not been disclosed but the deal could bring in up to £65m a year on a “conservative” projection — leaving about £50m in cash after costs. That will help InfraStrata in its talks with investors, as well as Lloyds and Barclays. Yet the company is in a weak negotiating position. It could end up handing up to 75% in subsidiary Islandmagee Energy, which has the deal with Vitol, to investors and collecting a management fee to run the project. InfraStrata’s hard-working management has ambitions to develop infrastructure projects around the world, and there are promising signs. Vitol has said it is keen to partner on more projects, and is reported to have driven InfraStrata’s recent plan to look at developing a liquefied natural gas import terminal off Cumbria. Yet the prospect of value for shareholders any time soon looks too slim. For all but the bravest, avoid. |
 | Reports that the American-based group Brinks is preparing to make a £1 billion bid for the cash-handling division of G4S (GFS) lit up shares in the London-listed security business. The company’s stock jumped after Sky News reported that Brinks was one of several players to have approached G4S about buying its cash-solutions business, which was put under review for a possible spinoff in February. The broadcaster also cited Prosegur of Spain as a potential buyer, prompting speculation that the level of bid interest could spark an auction. |
© 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.