Restaurant Group (RTN) has won the backing of 92% of shareholders for a £315m rights issue to fund the controversial takeover of casual dining chain Wagamama. The 13-for-9 rights issue, offered at 108.5p, meant investors received 13 new shares for every nine they own. The 8% of shareholders who refused to buy the new shares had their stake in the company diluted with JP Morgan, who sold off the unsold stock. TRG, which owns Frankie & Benny’s and Garfunkel’s, hopes to raise the remaining funds by loading up its balance sheet and taking on £220m of debt.
Balfour Beatty (BBY) struck an upbeat note in contrast to its peers as it revealed higher profit forecasts and signalled the imminent end of its costly Aberdeen bypass project. Britain’s largest building company made higher-than-expected gains by selling off its £43m interest in Fife Hospital and an 80% stake in a student accommodation project at Edinburgh University, and now expects profits from disposals to top £65m this year. Balfour’s improved position comes in contrast to others in the industry who have suffered in the wake of Carillion’s demise in January as banks have shied away from lending to builders.
Mike Ashley launches extraordinary attack on Debenhams (DEB) after chain rejects cash injection. Mike Ashley has sounded the alarm over the future of Debenhams after revealing he offered the embattled retailer a £40m loan to “save” the business in exchange for 10% of the retailer’s shares. In an explosive rant about the health of the company he accused Debenham’s board of refusing to talk to him. “There’s no need for that business to fail and wipe out shareholder value – I find it ‘blow-your-brains-out’ stuff,” he said. The sportswear tycoon said that he had urged the Debenhams board to stop paying dividends that he feared would mean “they’re going to run themselves out of money”.
Revival of package holidays and cruises drives sales at TUI AG Reg Shs (DI) (TUI). German travel operator Tui has shrugged off a “challenging market environment” to report growing sales, powered by the success of its trips, package holidays and cruises. Operators in the travel industry have issued a string of profit warnings this year, but Fritz Joussen, chief executive, remains confident Tui’s “strong strategic positioning” makes it less vulnerable than its rivals. “We seem to be more or less immune against these trends,” he said. “As long as we are better than our competitors nothing can happen.” The world’s biggest travel agent, which is behind the Thomson and First Choice brands, reported a 5.3% rise in revenue to €19.5bn in the year ending Sept 30, beating forecasts.
Ocado still hungry for deals after big year. Ocado Group (OCDO) is continuing to pursue deals to sell its warehouse technology to foreign retailers and will look to open a fifth distribution centre in the UK, its finance boss has said. Duncan Tatton-Brown said the online retailer would not rest on its laurels despite announcing four major international deals in the last year, saying “we expect 2019 is going to busy… we don’t get a year off next year”. He added: “We expect more commitments [from partners] next year, and our sales team is busy looking for the next Ocado Solutions Partner.”
Capita (CPI) under fire from audit office over troubled Army recruitment contract. National Audit Office report attacking Capita’s handling of the troubled Army recruitment contract has been labelled the “final nail in the coffin” for the outsourcer retaining the work. The government spending watchdog said the Defence Recruiting System scheme which handed over signing up the almost 10,000 would-be soldiers the Army needs a year to the private company was “beset by problems”. The NAO said that the scheme – launched in 2012 with the aim of saving £267m over a decade by using an online recruitment process – had resulted in a massive shortfall in new recruits.
Serco defies outsourcer malaise with bright outlook. Serco Group (SRP) has defied the gloom afflicting Britain’s outsourcers by trumpeting the success of its international arm and upgrading its earnings forecasts for the year ahead. The company, which runs prisons, cleans hospitals, and mans support ships for the Royal Australian Navy, said its earnings per share would be 5% to 10% higher than expected this year thanks to lower effective tax rates. It also confirmed recently raised guidance that it would grow underlying trading profits by 30% to 40% to between £90m and £95m this year, climbing to £95m to £100m next year.
Nigeria brings $1bn claim against Shell to the High Court. Nigeria has filed a $1bn claim against Royal Dutch Shell ‘B’ (RDSB) in London’s High Court over a 2011 oil deal at the centre of long-standing allegations of fraud and corruption. The claim alleges that Shell made payments for a major oil block off the Nigerian coast to a company controlled by Nigeria’s former oil minister, Dan Etete, which was then used to pay “bribes and kickbacks”. The claim also alleges that Shell and its project partner ENI engaged in bribery and unlawful conspiracy to assist corrupt Nigerian government officials. The same deal is the subject of an ongoing criminal trial in Milan. Shell has robustly denied all allegations of fraud and corruption made in both legal cases. In a statement, the Anglo-Dutch company said the deal was “a fully legal transaction”.
G4S considers spinning off armoured van business in bid to speed up turnaround. Security outsourcer G4S (GFS) is looking to spin off its cash handling business after coming under pressure from shareholders to speed up the pace of its drawn-out turnaround. The FTSE 250 company said it was reviewing “separation options” for the business, which tops up cash machines and ferries coins and banknotes between companies and their banks in armoured vans in 45 countries. Ashley Almanza, chief executive, said the move was not the beginning of a sales process but that potential options on the table could include a demerger or a stock market listing.
Purplebricks founder bullish despite widening losses. The boss of Purplebricks Group (PURP) has sought to distance the online estate agent from rivals who have gone to the wall in recent months after mounting losses sent its shares tumbling again. Michael Bruce, who started the Aim-listed company with his brother Kenny six years ago, said its UK arm was “in great shape, despite what you will no doubt hear and see about others in the industry”. Purplebricks’ rival Emoov collapsed last month after merging with another competitor Tepilo earlier in the year. Meanwhile the UK’s largest traditional agent Connells shut down its digital operation Hatched, insisting the business model of online agents is “not commercially sustainable”. But Mr Bruce insisted his company was benefiting from a “shake out” in the market that has hampered rivals both online and traditional.
Bonmarché issues profit warning blaming dire trading and Brexit. Shares at Bonmarche Holdings (BON) have plummeted more than two fifths as the women’s fashion retailer issued its second profit warning in three months, citing ‘unprecedented’ trading conditions and Brexit uncertainty. Investors wiped 41.6% off the company’s value in early trade, down to 47p, after the retailer said current trading was “significantly worse” than during the recession. The Aim-listed company now expects anything from breaking even to an underlying pre-tax loss of £4m for the current year, despite previously forecasting pre-tax profits of £5.5m for the period. It recorded a pre-tax profit of £8m in the same period the year before.
Spire Healthcare Group (SPI) slumped to a new record low after City analysts warned that the Brexit stalemate stealing the limelight in Westminster will “paralyse” NHS decisions. The private hospital provider was stripped of its FTSE 250 status in last week’s index shake-up after being hit by the NHS funding squeeze reducing referrals from the public sector. It continued its downward spiral yesterday as JP Morgan piled on the pressure by predicting that the NHS will be “neglected” by the Government ahead of the crucial Brexit deadline.
Short-seller target Ultra Electronics Holdings (ULE) was one of the biggest mid-cap losers after Barclays poured cold water on its trading statement. The defence company insisted that its full-year performance will be in line with expectations but Barclays raised questions over its targets. Analyst Charlotte Keyworth warned clients that next March will give its new boss an “important opportunity” to reset expectations. Barclays analysis suggests it is “likely to disappoint”in the full-year update, sending Ultra shares sliding 84p to £12.97.
IWG (IWG) founder Mark Dixon took advantage of its recent share price slump to snap up more than £5m of the office space provider’s shares, boosting his stake to 27%. IWG shares were changing hands at above 300p amid interest from three private equity giants but its value has slipped more than 30% since walking away from the takeover talks in the summer. IWG closed down 1p at 204.5p.
Questor: ‘One to tuck away for the long term’, Tristel (TSTL) has carved out a niche in infection control. Inheritance Tax Portfolio: the supplier of disinfectants to hospitals has patent-protected sprays, solid opportunities for growth and new products in the pipeline.
