Heathrow boss backs Virgin Atlantic-led rescue of Flybe. The boss of Heathrow has come out in support of the Virgin Atlantic-led rescue of Britain’s biggest regional airline Flybe Group (FLYB) as the airline completed the sale of its operating companies to the consortium. John Holland-Kaye believes a cut-price takeover by Connect Airways, which also includes Southend Airport owner Stobart and US private equity firm Cyrus Capital “could be a really positive move”. It would allow Virgin Atlantic to create a “hub” at Heathrow, he said, providing a “viable competitor” to British Airways owner IAG.
Standard Chartered sets aside £688m to cover potential US and UK fines. Standard Chartered (STAN) has put aside $900m (£688m) to cover potential fines relating to previous scandals. The bank said the cash will cover possible fines relating to historical sanctions breaches in the US, investigations linked to foreign exchange trading issues and a £102m penalty from the UK’s finance watchdog. The provision, which will be included in the bank’s results next week, has emerged just under a year after the emerging markets lender’s head of compliance Neil Barry quit over allegations of “inappropriate” behaviour.
Head of Schroders (SDR) banking dynasty dies aged 86. Bruno Schroder, the head of the Schroders banking dynasty, has died at the age of 86. Schroders said on Thursday that Mr Schroder, who was the great-great-grandson of the group’s co-founder John Henry Schroder and had been on the FTSE 100 company’s board since 1963, died after a short illness. “Bruno made an enormous contribution to Schroders,” said the group’s chairman, Michael Dobson. “His long experience, good judgement and sense of humour will be sorely missed. On behalf of everyone at Schroders I send our heartfelt condolences to Bruno’s wife and family.”
Anglo American trims dividend despite better than expected returns. Anglo American (AAL) has defended a small cut to its dividend, in contrast to rival miners, telling shareholders there will be more rewards to come. The FTSE 100 giant trimmed its full-year dividend by 2 US cents to $1 a share despite reporting a rise in profits. Anglo chose to buck the trend of its peers, which have been showering shareholders in cash payouts and share buybacks to make up for several years of dividend cuts. Chief executive Mark Cutifani said that if market conditions were “favourable” the mining giant was “open to doing more”, but that any increase in the dividend was a decision for the board.
Barclays bosses urge shareholders to reject activist’s advances. Barclays (BARC) bosses have told investors to reject corporate raider Ed Bramson’s bid for a seat on its board as they prepare to meet the activist investor in New York. In the bank’s first formal letter to investors on the issue, chairman John McFarlane urged shareholders not to support the activist in a vote later this year. He said the board was confident in its strategy and believed it was “important to avoid a further period of significant disruption which we have only just freed ourselves”.
Purplebricks shares plummet amid disappointing growth and management shake-up. Shares in Purplebricks Group (PURP) fell off a cliff on Thursday after it slashed sales forecasts and bid farewell to two senior bosses. The online estate agent said it was facing a “challenging” market in the UK and efforts to revive its fortunes in Australia and a marketing push in the US had failed to provide a big boost, meaning full-year revenues would fall short of expectations. They would now be between £130m and £140m, compared with a forecast of £165m to £175m in December. Purplebricks shares plummeted as much as 40% in early trade before stabilising at 115p, down 30%. They had already lost almost two thirds of their value in the past year amid concerns of a slowing housing market.
BAE slides on fears that German export ban will hit Saudi contracts. Shares in BAE Systems (BA.) fell sharply on Thursday following a warning that Germany’s attempts to block exports to Saudi Arabia could scupper its contracts with the kingdom and hit its financial performance. The German government is trying to stop weapons exports to Saudi Arabia following the killing of journalist Jamal Khashoggi in the Saudi consulate in Istanbul last October and its role in the conflict in Yemen. Germany is one of the four countries in the Eurofighter Typhoon consortium along with Spain, Italy and the UK and export licences must be issued by each government.
Just Eat dips as rival seeks bigger slice. Just Eat (JE.) was put into reverse gear by fears that arch rival Uber Eats will take a bite out of the takeaway giant’s market share by slashing restaurant fees and opening up its platform. Uber Eats announced plans to cut the maximum order fee for restaurants to 30% and introduce a marketplace to allow them to make their own deliveries using its platform. The move suggests that Uber Eats has recognised that its “model is not working”, according to Liberum analyst Ian Whittaker. Just Eat has managed to conquer smaller towns by allowing restaurants to deliver their own food while Uber Eats has used its own delivery network, which is most effective in large urban areas.
Investors punish Centrica over fears dividend could be cut. British Gas owner Centrica (CNA) sounded the alarm on payouts to shareholders as it revealed the company could come under pressure from potential hits to its cash flow this year. The FTSE 100-listed group’s stock price fell to a 20-year low after the energy price cap, introduced at the start of January, and challenging market conditions weighed on its performance. Centrica, which has lost more than two million customers in the past two years, is also facing declines in its nuclear output and a drop in volumes at its oil and gas division.
Serco eyes return of dividend after five years as turnaround continues. Serco Group (SRP) defied concerns over the troubled outsourcing sector after it reported a seven-fold increase in profits and raised its growth forecasts for next year. Rupert Soames, chief executive, said the company would grow ahead of the wider market for the next two years, boosted by a clutch of bumper contracts including a 10-year deal to house UK asylum seekers worth £1.9bn. The turnaround has raised the prospect that Serco could soon start paying dividends after scrapping them in 2014.
Southeastern success puts Go-Ahead profits back on track. Go-Ahead Group (GOG), the under-fire operator of the Govia Thameslink train network, sought to draw a line under its railway woes after making bumper returns from its giant Southeastern franchise. The FTSE 250 company beat market expectations on rail profits and also impressed with the amount of money it was making on London buses. Half-year revenue rose 5% to £1.9bn. Pre-tax profit fell sharply to £44.2m after losing the London Midland franchise in December 2017, however. While Go-Ahead impressed the City, its rail business remains precariously placed. Chief executive David Brown said Go-Ahead “would make no money” this year on Britain’s biggest train franchise, Govia Thameslink.
