Scotsman owner Johnston Press puts itself up for sale to stave off insolvency. The troubled newspaper publisher Johnston Press (JPR) has put itself up for sale in an attempt to attract a rescuer before it is forced into insolvency by a debt repayment deadline. Johnston Press, which owns the i national newspaper and dozens of regional titles including The Scotsman and the Sheffield Star, is due to repay £220m in bonds next summer. After exploring restructuring options for more than a year it said its adviser Rothschild would run a formal sale process. The process is expected to take weeks rather than months and could bring to an end years of uncertainty for thousands of Johnston Press staff across the country.
Bakery chain Patisserie Holdings (CAKE) is teetering on the brink and needs “an immediate injection of capital”, it has admitted. If the company is unable to raise the cash, it said there “is no scope for the business to continue trading in its current form”. Luke Johnson, Patisserie Valerie’s executive chairman and largest shareholder, is reportedly teeing up a multimillion-pound rescue package. The latest development throws into question the immediate future of its 206 shops and 2,500 staff. A raft of advisers, believed to include forensic accountants from PwC and lawyers from Osborne Clarke, have been been assisting the chain in getting to the bottom of a “potentially fraudulent” accounting mis-statement. PwC has been put on alert to manage the company’s administration if rescue funding falls through.
WH Smith (SMWH) is to “wind down” its initiatives to revitalise its high street arm and close six shops following a “detailed review” of the business, as its traditional stores struggle in weak trading conditions. Shares in the firm plummeted more than 12% to £17.74 on the back of the news that the stationer will halt projects such as its franchised stores, WH Smith Local, and its budget greetings card chain Cardmarket, shifting its focus to more lucrative travel outlets in airports and railway stations. The review comes after a challenging year in its traditional stores, which reported a 3% fall in trading profits to £60m and a 3% slide in like-for-like sales in the year ending August 31. The company booked £11m in costs on its high street arm, relating to the closure of stores. This knocked pre-tax profits at the group level 4% to £134m. Overall revenues rose 2% to £1.3bn.
Keller Group (KLR) has warned on profits amid Malaysian Government spending cuts and other problems in its Asia-Pacific arm, sending its market value down by a third. The London-listed company, which has worked on high-profile projects including Crossrail and the London 2012 Olympic Park, said it now expects the unit to lose between £12m and £15m this year, compared with previous expectations of a “small profit”. The problems stem chiefly from its Malaysian business, which has been hit by the new prime minister Mahathir Mohamad’s decision to scrap a number of Chinese-funded infrastructure projects, including a $20bn rail link. Keller said the profits downgrade was also the result of project reassessments carried out by the newly-appointed bosses of its south-east Asian arm and its Waterways business in Australia. It has now put both units up for review.
Aston Martin investors were shaken and stirred by scribblers at Jefferies handing the stock market newbie a thumbs down in its first examination by the City. Nearly £900m has now been wiped off the James Bond carmaker since its flotation last week. With many City banks tied up in the year’s most anticipated IPO in London, Jefferies was the first to deliver its verdict, giving the company an “underperform” rating. Jefferies told clients that the “high pricing” of the IPO and a short six-month lock-up period before insiders can sell their shares may leave investors with a “sour taste”. Given that “You Only IPO Once”, analyst Philippe Houchois argued that Aston Martin Holdings (AML) should have raised money to address liquidity concerns rather than just providing its owners with an exit.
Revolution Bars Group (RBG) flirted with a 15-month low after snubbing a second approach from nightclub owner Deltic. Peel Hunt analyst Douglas Jack questioned “the depth and intensity” of the rekindled takeover talks and said its management must now deliver positive like-for-like sales growth after breaking off talks. He argued that Revolution will have “to perform very strongly to recoup this loss of potential shareholder value” as ditching a deal means “losing potential synergies and scale”.
Fund supermarket Hargreaves Lansdown (HL.) plunged 97.5p to £18.60 after warning of an “industry-wide slowdown” in an update to investors.
Jacamo owner Brown (N.) Group (BWNG) dropped 27.5p to 111p, a 20% slide, after cutting its interim dividend.
Brent crude plunged 2.9% to less than $81 per barrel, while gold prices surged 2.6% to hit a two-month high as risk appetite receded. Gold miners Fresnillo (FRES) and Randgold Resources Ltd. (RRS) benefited from the flight to safety, however, jumping 66.8p to 839p and 440p to £57.06 respectively.
Ferguson (FERG) bucked the downward trend, rising 98p to £55.67 as traders decided the stock is oversold despite a downgrade from Liberum. Its shares were trading above £65 at the start of the month before it warned of slowing growth.
The FTSE 100’s banking and oil heavyweights bore the brunt of the sell-off in London. HSBC Holdings (HSBA) tumbled 23.4p to 630.1p, its lowest level in 18 months, while BP (BP.) shares shed 14.8p to 554.4p.
Competition regulators have launched a probe into a transatlantic pricing deal between British Airways and three other airlines. The Competition and Markets Authority (CMA) is investigating a series of commitments made by British Airways, American Airlines, Iberia and Finnair to the EU, which also allow the quartet to co-operate on capacity and schedules. The Atlantic Joint Business Agreement was struck in 2010 to address competition concerns raised by Brussels. It relates to six routes: London-Dallas, London-Boston, London-Miami, London-Chicago, London -New York and Madrid-Miami. Included in the concessions were pledges to make landing and take-off slots available to competitors at either London Heathrow airport or London Gatwick airport. The CMA said in a statement: “This case is at an early stage and no assumption should be made that the Atlantic Joint Business Agreement infringes competition law.” British Airways and Iberia’s owner International Consolidated Airlines Group SA (CDI) (IAG) said the transatlantic accord had “enhanced customers’ travel choices” and provider “cheaper fares”.
The boss of property developer Countryside Properties (CSP) played down concerns about the company’s prospects after a warning of weaker confidence among some home buyers knocked a tenth off its market value. In an otherwise upbeat full-year trading update the FTSE 250 company said it had seen signs of “a more subdued tone” among so-called discretionary buyers – those who already own a home – after a slowdown in the second-hand market. While most of its private home sales are to first-time buyers and the company also has a large affordable housing division that sells to local councils, the warning came as a red flag to investors, who sent its shares down as much as 11% in morning trade.
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