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.
