Italy angst grips markets as populists threaten to sue EU over budget clash. Italy’s populist government will not retreat a “millimetre” from its spending plans amid pressure from the EU, Five Star Movement leader Luigi Di Maio has warned. Mr Di Maio insisted that the populist coalition will not back down on its 2.4% of GDP deficit target after European Commission president Jean-Claude Juncker evoked memories from the Greek debt crisis. Mr Juncker said that “we have to do everything to avoid a new Greece – this time an Italy – crisis” after the populists outlined plans to ramp up spending.
Royal Mail (RMG) shares continued to slide on Tuesday, plunging to their lowest level since its controversial IPO five years ago and wiping more than £100m off postal workers’ wealth. The former state monopoly’s market value has fallen by more than a quarter since a warning on Monday that full-year profits would be lower than expected, in an update dubbed “shocking” by analysts. Its shares were down 8.2% at 360p on Tuesday afternoon, 40% below their peak in May and not far above their float price of 330p.
Nearly a tenth of Unilever’s shareholders have publicly committed to voting against the company’s plan to scrap its Anglo-Dutch structure. Columbia Threadneedle, a top 20 shareholder, is the latest investor to join a roster of big City names that have come out against the move. Unilever (ULVR) wants to scrap its dual listing in favour of a single headquarters in Rotterdam, but some investors fear they could end up worse off. The owner of a host of household brands – such as Ben & Jerry’s ice cream and Dove soap – needs support from at least 75% of its shareholders for the relocation to go ahead.
A slowdown in sales at plumbing supplies giant Ferguson (FERG) has spooked investors, who sent its shares to the bottom of the FTSE 350 on Tuesday. The company, formerly known as Wolseley, saw growth slow between August and September as it warned the UK market “remains tough”. Ferguson’s shares were changing hands for £61.39 in afternoon trade, down 6%. The slide came despite the company promising a 21% rise in its annual dividend, to $1.89 (146p) per share.
Royal Dutch Shell ‘B’ (RDSB) has approved the development of a $31bn (£24bn) liquid natural gas (LNG) project in Canada that could signal the return of energy mega-projects around the globe. The oil major will invest $12bn in the long-awaited project, in which it has a 40% stake. LNG Canada was once dismissed by analysts as a risk too great even for the industry’s biggest players but Shell has spent the last six years carefully honing the project’s eye-watering costs. The move is expected to usher in a string of investments in rival projects as the global market heats up.
SCS Group (SCS) has brushed aside the gloom on the high street by chalking up a double-digit rise in profits, despite being affected by troubles at House of Fraser. Pre-tax profits at the furniture-to-floorings retailer rose 11% to £13.2m for the year to July 28, underpinned by record online sales and a strong start to the period. The second half proved tougher for the business. Bitterly cold weather in February, a heatwave in June and July and the World Cup caused like-for-like orders to slide 2.6% during the final six months.
Revolution Bars Group (RBG) has fallen to a loss after hot weather and England’s unexpected success at the football World Cup lured customers away from its pubs, and it took a string of multimillion-pound exceptional costs. Full-year like-for-like sales fell 0.6%, while one-off costs topped £11.1m in the year to June. Total sales rose 8% to £141.9m, but the company posted a loss before tax of £2.8m, compared with a £3.8m profit in the prior year. Chief executive Rob Pitcher insisted the company “is a fundamentally good business” that had laboured with “factors outside of its control”. The chain suffered earlier in the year from the ‘Beast from the East’ winter storm and record summer temperatures. “The extreme heat drove people to sit in beer gardens and by rivers. That was our consumers spending money elsewhere,” Mr Pitcher told The Daily Telegraph.
CYBG (CYBG) slumped to a three-month low ahead of its takeover of rival Virgin Money after City scribblers raised doubts over the combined challenger bank’s attempt to break the dominance of the “big four” lenders. The two FTSE 250 banks are nearing completion of the £1.7bn deal and had vowed to create a “truly national competitor to the status quo” through greater scale. But UBS warned investors that the takeover does not address the “key concerns” at CYBG.
Burford Capital (BUR) plunged 156p to 18.34 after the Aim-listed litigation funder raised £193m from investors. The placing, the company’s first since 2010, will attempt to tap into the growth of the litigation finance market, Burford said.
Ryanair Holdings (RYA) chief marketing officer, Kenny Jacobs, has said the company is working to reach deals with European trade unions by Christmas and get them implemented next year. Speaking at a news conference in Madrid, Mr Jacobs said the group had accepted demands from Spanish unions to hire local staff on Spanish contracts. The update came amid pilot and cabin crew strikes that took place across Europe in September, which forced it to cancel hundred of flights.
Questor: ignore the profits warning and buy SSE (SSE) for a reliable stream of dividends
