Savills (SVS) boss Jeremy Helsby on building a ‘recession-proof’ property giant. The Savills that will be left by Jeremy Helsby when he stands down as chief executive after 11 years at the end of this month will be very different to the business he first joined as a fresh-faced land agent almost 40 years ago. Many still think of the 160-year-old property company as mostly an upmarket estate agent selling Mayfair flats and country piles to Russian oligarchs and City bankers. But nowadays you are as likely to find a Savills worker managing an office building in Hanoi or advising on the sale of a shopping centre in California as showing a super-rich buyer around a London penthouse. “When I joined in 1980 we had no overseas offices, it was a rural business in the UK turning over £12m,” Helsby says from the company’s plush London headquarters off Oxford Street. He took the helm in 2007, and its stock market value has rocketed from £300m to £1bn since then.
Debenhams bosses miss out on bonuses amid woes. Debenhams (DEB) bosses have lost out on multimillion-pound bonuses and share awards after the struggling department store failed customer satisfaction targets and reported the biggest loss in its 124-year history. The retailer had set a minimum target of £85m pre-tax profits to pay out the lowest bonus award of 10% of salary, but Debenhams reported underlying profit of just £33m, and was pushed into a loss of £491.5m by writedowns of £512.4m. A fifth of the bonus payment also depended on customer satisfaction scores. Sergio Bucher, chief executive, received a £972,763 pay package last year, which included a £113,204 housing allowance that had been agreed when he joined two years ago from Amazon Fashion, according to Debenhams’ annual report.
British Gas owner sails close to wind on dividend. The owner of Britain’s biggest energy supplier faces a white-knuckle ride this winter to defend its dividend against further threats in the wake of a financial storm for the utility industry. Providing it can avoid any further pain, Centrica (CNA), the parent company of British Gas, will only narrowly manage to scrape together enough cash to pay its shareholders, its own financial advisers have warned. Analysts at German investment giant UBS, which is advising Centrica on the sale of its nuclear interests, warned that a takeover bid is one of the few scenarios in which shareholders might recover value from their investment after years of plummeting share prices. “Centrica has had another difficult year in 2018 and the strategy is now under pressure,” said Sam Arie, of UBS. “We do believe management can – just about – meet its cash flow targets, but there is little room for anything else to go wrong and the risk of a [dividend] cut is rising,” the analyst said in an investor note.
Interserve (IRV) lenders seek to wrest back control. Interserve’s largest lenders, including two hedge funds, are plotting to wrest control of the troubled outsourcer in a debt for equity deal that would see long-suffering shareholders wiped out. The Sunday Telegraph understands that Interserve’s lenders have lost faith in the troubled company’s management since its first round of rescue talks earlier this year. Banks including RBS, HSBC and BNP Paribas, together with Emerald Asset Management and Davidson Kempner Capital, will attempt to force a fresh debt deal on the company that would hand control to the lender group. A fresh restructuring is expected to include a debt for equity swap set to deliver heavy losses for its institutional investors and all but wipe out value for public shareholders.
Short sellers Lombard Odier and Merian ramp up bets against undertaker Dignity. Short-sellers have ramped up their bets against undertaker Dignity (DTY) after the competition watchdog began an inquiry into the funeral industry, which is in the midst of a price war. Hedge funds Lombard Odier, Blackrock and Merian have all increased their short positions against the funeral provider in the last three weeks. At least 2.9% of Dignity’s shares are now on loan, up from zero disclosed shorts in September. The Competition and Markets Authority launched a full-scale investigation in November after finding that funeral prices had risen at more than three times the rate of inflation over the past 10 years.
Rising fears of a Corbyn government are prompting foreign investors in Britain to prepare legal countermeasures to prevent their assets being nationalised against their wishes. The Sunday Telegraph has learned that the Canada Pension Plan Investment Board (CPPIB), a major infrastructure investor, is in talks aimed at putting its one-third stake in Anglian Water, acquired for £2.3bn in 2006, beyond the reach of a potential Labour government. City sources said CPPIB, one of the world’s biggest pension funds, is in talks to transfer its Anglian shares to a holding company based in Hong Kong. The work is underway amid Brexit-related chaos in Westminster that it is feared could trigger a General Election that may open the door to a radical left-wing government. Kallum Pickering of Berenberg Bank said that the UK “could be trading one risk for another” as the chances of a hard Brexit have fallen, but that of a Labour electoral win had risen. There is now a 30% probability of Corbyn-led Government, he said. The bilateral treaty between Britain and China that governed the handover of Hong Kong in 1997 provided protection against expropriation of assets by the state. The agreement was designed to encourage UK companies to continue to invest in the territory under the control of Beijing and the Communist Party, but its shelter is now being sought by foreign investors in Britain.
