FirstGroup (FGP) new chief, David Martin, the former Arriva chief who replaced ousted Wolfhart Hauser, is to meet investors at the end of a whistle-stop tour of the US on Oct 31, The Daily Telegraph understands. In his first meeting with them since taking office in August, Mr Martin will be hoping to convince investors that he has the right team and strategy in place to reinvigorate the company’s fortunes after months of disquiet. Coast Capital Management, the Wall Street activist and First’s biggest shareholder, will likely provide a stern test of Mr Martin’s resolve.
Analysts have claimed that Direct Line Insurance Group (DLG) could be heavily exposed to the City watchdog’s plan to crack down on alleged overcharging of loyal customers, with the company facing a probable one-off hit to its earnings and possible damage to its brand once regulators announce final measures next year. Britain’s home and motor insurers have all found themselves under fire, after the Financial Conduct Authority (FCA) announced a ban on companies unfairly hiking prices for existing customers – a practice known as “price walking” or the “loyalty penalty” – after finding that millions of people overpaid when renewing their insurance last year.
Lloyds Banking Group (LLOY) is understood to have stepped up its succession planning as analysts and headhunters bet that its chief executive Antonio Horta-Osorio will go within a year. Lloyds is understood to be in the “initial research” stage of finding a successor as speculation grows that Mr Horta-Osorio, who has long been tipped as a potential candidate for the top job at HSBC, is eyeing his exit. “I believe we will see Antonio move to step down from the board of Lloyds within the next 12 months,” said John Cronin, a banks analyst at Goodbody. Investec’s Ian Gordon said it would be “a surprise” if the 55-year-old stayed for more than another two years given he became CEO in 2011.
Investors in the UK’s stock market are expected to enjoy a £240bn “deal dividend” if Boris Johnson can seal a last-gasp Brexit agreement before the Oct 31 deadline. Stocks in London would rise 10% and the pound would claw back 8% against the dollar if a Brexit deal is reached, according to market stress tests conducted by data giant MSCI. Sterling and UK-exposed stocks skyrocketed into the weekend amid resurgent hopes of a breakthrough in talks between the UK and EU. The domestic-focused FTSE 250 index advanced more than 3% while RBS and housebuilders saw gains of more than 10%. Sterling gained as much as 2.8% on Friday, pushing above $1.27 for the first time in three months.
The City watchdog has fined broker Tullett Prebon £15.4m for failing to be open and co-operative with an investigation into cosy relationships between brokers and traders that included lavish golf trips and wild foreign jaunts. Tullett Prebon, now part of FTSE 250 firm TP ICAP (TCAP), had “ineffective controls around broker conduct” between 2008 and 2010, resulting in “improper” trades, the Financial Conduct Authority (FCA) found. A report found that brokers’ bonuses were tied to to how much business they generated, while the company paid for golfing trips to Scotland and trips to Monte Carlo, Ibiza and Las Vegas, all on top of the usual client drinks and dinners in the City.
“We’ll give you clarity at the full-year results,” Nick Beighton, the normally jovial boss of ASOS (ASC), sniffily told an analyst on the morning of its second profit alert in July. The first profit warning was just before Christmas. On Wednesday, when he updates the City, Beighton will have to go beyond clarity. There is “a lack of visibility” says Georgina Johanan, a retail analyst at JP Morgan. Asos has kept shtum so far about how its coffers might shape up in 2020. Once a stock market tech darling, the online retailer’s share price has slumped from highs of £76 last year to £24 on Friday. Almost 5% of its shares are on loan to shortsellers.
BP (BP.) will take a hit of up to $3bn (£2.4bn) from asset sales and warned that a storm in the Gulf of Mexico dented its production in the middle of this year. Shares in the oil giant fell 1.8% to 492.85p even as it insisted there would be no impact to its dividends or free cash flow. It comes as BP, which last week announced the departure of chief executive Bob Dudley, looks to sell off non-essential assets worth around $10bn by the end of this year – one year ahead of schedule. The company sold its entire Alaska business to Houston-based Hilcorp Energy for $5.6bn this year.
Questor: as incoming boss mulls a cleaner future, BP (BP.) strength gives him room to breathe. Questor share tip: oil major’s reserves are still highly cash generative as it plots a move away from fossil fuels. Hold
