Interserve’s biggest investor seeks to oust board in wake of rescue deal. Interserve (IRV) has struck a rescue deal with its lenders but faces a battle to win the approval of shareholders after its biggest investor sought to clear out the struggling government contractor’s board. The company, which cleans schools, maintains prisons and builds roads, unveiled a £480m debt-for-equity swap on Wednesday under which its banks will write-off more than half its debt in return for millions of new shares. Debbie White, chief executive, said the deal was “critical to the Interserve Group’s future and all of its stakeholders”. However, existing shareholders will be left with just 2.5% of its shares.
First-time buyers help boost Barratt and Redrow profits. Two of Britain’s largest housebuilders have posted booming profits as the sector continues to be buoyed by strong demand from first-time buyers and the Government’s Help to Buy Scheme. Barratt Developments (BDEV) made £408m in the six months to December, up by a fifth on the same period in 2017, while smaller rival Redrow (RDW) posted a 5% rise to £185m for the half-year. David Thomas, chief executive of Barratt, said: “We are already the largest housebuilder in the UK by some distance but we still have ambitions to grow.” While the market for second-hand homes has slowed over the past year amid economic uncertainty, sales of new homes, especially at the more affordable end, have continued to boom.
CYBG jumps on extra savings from Virgin Money takeover. Shares in the owner of Clydesdale and Yorkshire banks jumped on Wednesday after it revealed its £1.7bn takeover of Virgin Money has produced bigger savings than expected. CYBG (CYBG), which has acquired Sir Richard Branson’s Virgin Money, surprised investors with a trading update that analysts said was not as gloomy as feared. The challenger bank said it now expected to generate annual savings from the takeover of £150m by the end of 2021, compared to previous estimates of £120m. Its shares rose almost 15pc on the announcement, valuing the company at close to £3bn.
Ocado cancels orders after fire rips through its Andover warehouse. The online supermarket Ocado Group (OCDO) has been forced to cancel orders and warned of a “hit to sales” after a huge fire ripped through its robotic warehouse in Hamphire. Around 200 firefighters were deployed to tackle the blaze which began at the Andover facility at 2.44am on Tuesday. Hampshire Fire and Rescue Service (HFRS) said four of its firefighters had been treated for slight smoke inhalation as they battled to bring the inferno under control. Locals were urged to keep their windows and doors shut due to the smoke from the blaze, while the public was also asked to avoid the area. Ocado said it had been forced to cancel some customer orders because of the fire and that it was “working hard to resume normal service as soon as possible”.
Interserve nears debt-for-equity rescue to safeguard the stricken outsourcer. Stricken Interserve (IRV) is closing in on a debt-for-equity rescue deal with banks that would safeguard 45,000 jobs at the outsourcer after crunch talks with lenders and ministers. Government sources said the company, which runs key public services including cleaning schools, maintaining prisons and building major infrastructure projects, could announce a deal in the next few days. Whitehall is understood to back bankers taking a large stake in the company in return for writing off debts. The Government is desperate to avert what insiders refer to as “Carillion 2.0”, in reference to the dramatic collapse of Interserve’s fellow outsourcer last January.
Activist Edward Bramson targets seat on Barclays board. Activist investor Edward Bramson has submitted an application for a seat on the board of Barclays (BARC) in a bid to shake up the 300-year-old lender. Mr Bramson’s investment vehicle, Sherborne Investors, said in a brief statement on Tuesday that investors would consider the proposal at the bank’s annual general meeting (AGM) on May 2. The move ratchets up the pressure in an ongoing battle between the secretive investor and management at Barclays. Mr Bramson, who owns a 5% stake in the banking giant, has argued that the lender should turn its main focus to consumer banking instead of corporate and investment banking to increase returns for investors.
BP smashes expectations as profits more than double to £9.8bn. BP (BP.) stunned the market by more than doubling annual profits as the race to overhaul its global oil and gas portfolio begins to pay off. The oil major’s better than expected profits gushed to $12.7bn (£9.8bn) for 2018, up from $6.17bn the year before, in line with the steady upward march of global oil prices. The result was bolstered by a strong end to the year, despite oil market jitters, after BP clinched a $10.5bn deal to buy US shale fields from BHP Billiton. It was the eighth consecutive quarter in which BP flouted the expectations of market analysts by posting better than expected profits.
Estate agents face bleak times as Your Move owner shuts 120 branches. Estate agent LSL Property Services (LSL) is to close more than 100 branches and shed hundreds of jobs as the housing market grinds to a halt. The industry was seen to have bounced back from the financial crisis, having cashed in on a run of booming house prices. But the market in many places has now begun to turn. Combined with the rise of online agents and a number of unhelpful Government interventions, the tough conditions have proved to be a major drag on profits and forced firms to take drastic action to reshape their businesses. LSL’s plans are confined to Your Move and Reeds Rains, its larger mid-market brands. Around 40 of the offices will be closed outright and another 81 will be folded into other nearby locations.
British Gas to import supply from Mozambique in $25bn deal. Millions of British homes could soon be warmed by gas from Mozambique after the owner of British Gas clinched a $25bn (£19bn) deal to ship gas from a new project on the East African coast. Centrica (CNA) agreed to tap Mozambique’s giant gas reserves alongside Japan’s Tokyo Gas in a $25bn supply deal that will deliver gas to the UK, North America and the Far East. The pair will buy a total of 2.6m tonnes of super-cooled liquified natural gas (LNG) from Mozambique every year once US energy giant Anadarko begins production at Mozambique’s first gas export project. Iain Conn, Centrica’s chief executive, said the Mozambique deal would help it secure a a flexible LNG supply.
Carpetright finance chief departs while sales keep sliding. Carpetright (CPR) long-serving finance chief is stepping down after a decade at the business and a challenging year that left the flooring retailer slashing its store estate in a brutal rescue plan. The carpet chain announced that Neil Page wanted to retire from a full-time role following 30 years in retail. He will be succeeded next month by former SureSave and Shanks finance chief Jeremy Simpson. Chief executive Wilf Walsh said Mr Page had made an outstanding contribution to Carpetright and the board thanked him for his “unstinting commitment to the business, particularly through the recent challenging period of restructuring”.
St Modwen eyes more warehouses after turning back on retail. Property developer St. Modwen Properties (SMP) is on the hunt for more small warehouses after switching its focus away from retail space to focus on logistics. St Modwen, which is best known for regenerating brownfield sites such as the New Covent Garden Market, sold off more than half its retail portfolio last year for a combined £177m as it retreated from the country’s ailing high streets. It also ramped up its pipeline of new warehouse developments to 1.5m, from 1m one year ago, in a bid to take advantage of the shift to online shopping. Warehouse development has rocketed in the past 18 months as investors hunt out returns in one of the few areas of the property market that is booming.
