Marks & Spencer Group (MKS) has confirmed for the first time that it is in talks with Ocado Group (OCDO) about a potential joint venture that would push the retailer into online food deliveries. Speculation has been brewing in recent months but it has since emerged that M&S is looking to take a 50% stake in a joint venture that would split Ocado in two. The deal would satisfy Ocado boss Tim Steiner’s desire to focus on its technology business – which it is licensing to supermarkets around the world – and M&S’s need to make its food business fit for the digital era. It is thought that M&S will pay between £800m and £900m for a stake in the new venture, according to the Evening Standard which first reported the news.
The new boss of under-fire housebuilder Persimmon (PSN) defended the company’s record in the face of mounting criticism of its use of the Government-backed Help to Buy scheme as annual profits surged above £1bn. Dave Jenkinson declined to comment on reports ministers are considering stripping Persimmon of its right to use the scheme “because we have had no direct communication from the Government”. But he said: “I think you have to understand why the results are so good. We’ve invested over £3.8bn in land, the company has made serious investment to get those results. “We’ve increased our production by 75% from 2012.
The competition watchdog is posied to investigate the £1.3bn hostile takeover of Provident Financial (PFG) by its ex-boss. The Competition and Markets Authority (CMA) said it had served the two sides a so-called initial enforcement order that means the companies must stay separate while it decides if it should probe further. The firms can keep talking and agree terms in the meantime. John van Kuffeler, who was chief executive and then chairman of Provident for over two decades, made an unsolicited bid for the troubled doorstep lender last week through his firm Non-Standard Finance (NSF). Provident has hit back, saying the bid offers little value and should be rejected.
Chocolatier Hotel Chocolat Group (HOTC) has unveiled a surge in half-year sales as it shrugs off the high street gloom with new openings and a promising international push. Angus Thirlwell, co-founder and chief executive, launched a defence of physical shops in the face an onslaught from online retail, revealing the retailer had “stress-tested” its store estate to make sure it could survive a downturn. Even in a pessimistic scenario that included a steep fall in sales and rising cost pressures, it found its shops would still generate significant earnings growth over the next five years.
Standard Chartered (STAN) has promised to cut costs by $700m (£529m) and pull back in markets with low returns in a fresh set of targets that City analysts have called ambitious. The emerging markets-focused bank said it plans to find cost savings in countries including India, South Korea, the United Arab Emirates and Indonesia by 2021. Chief executive Bill Winters said the lender plans to increase profits by between 5 and 7% by 2021 – “well above the anticipated rate of growth for the global economy”. He added that the goal was to produce “surplus capital which can be reinvested or returned to shareholders”.
Germany’s ban on arms exports to Saudi Arabia in the wake of the killing of journalist Jamal Khashoggi could blow a £33m hole in Meggitt’s sales. The aerospace and defence parts supplier provides £700,000 worth of kit to each Typhoon fighter jet and Saudi Arabia has agreed a £10bn deal to buy 48 of them from BAE Systems. However Meggitt (MGGT) could be affected by the fallout from Germany’s decision to halt arms sales to the Gulf nation, as Typhoons are built by a four-nation consortium of which Germany is part.
Drax Group (DRX) now produces three quarters of its electricity from biomass as the electricity producer announced higher annual profits in a year that saw it buy generating assets from Scottish Power. The FTSE 250 firm said it was now one of the UK’s leading generators of low carbon and renewable electricity, with four of its six units converted to burn compressed wood pellets from sustainably managed forests in the US rather than coal. While Drax expects the UK’s power system to become increasingly dominated by wind and solar power, it said alternative supplies would still be needed when those forms were not available.
Travis Perkins (TPK) is keeping its options on Wickes open after the DIY chain staged a surprise recovery at the end of last year. Builders merchant Travis said in December it may sell the struggling chain as part of plans to focus on trade customers. However, sales in its consumer division, which includes Wickes, rose 5.6% in the final quarter of the year, cheering investors and sending shares up as much as 13%. John Carter, chief executive, said that while “troubled” Wickes had recovered well in the second half, it had “underperformed compared to where we would’ve hoped it to be”.
Gold and silver Fresnillo (FRES) has stepped up inspections of its tailings dams and will back an independent body to scrutinise their safety in the wake of a devastating accident in Brazil. The FTSE 100 company, which operates in Mexico, has appointed international consultants to review its dams later this year, in addition to inspections made every 18 months by a third party. Octavio Alvídrez, chief executive, backed industry-wide calls for the establishment of an independent body to regulate these massive structures, which typically hold back mine waste in the form of water and mud. “I think that would be very good – we would be glad to join that conversation,” he said.
Brexit-related changes to aircraft regulations will cost Babcock International Group (BAB) £10m as it restructures its aerial emergency services business. The company warned of the cost in a trading update on Tuesday, with chief executive Archie Bethel flagging up the impact of Britain leaving the EU on the 400 helicopters Babcock operates in Europe providing medical, firefighting and search and rescue services. The company expects a one-off £10m hit relating to operating within the European Aviation Safety Agency and is predicting an annual cost of about the same amount in the future to operate the new structure.
Vodafone boss Nick Read calls for US to hand over evidence on Huawei. Vodafone Group (VOD) boss Nick Read has called on US spies to share any evidence they have about Huawei so Europe can take a common view about whether to use the Chinese group’s technology. Read, who is chief executive of the world’s second largest mobile operator, told reporters at the Mobile World Congress in Barcelona that cutting the number of major network suppliers to two from three would damage the industry. He said it would lead to a “massive swap of equipment, [be] hugely disruptive to national infrastructure consumers, very, very expensive, will delay 5G in Europe for probably two years. It structurally disadvantages Europe.”
Clock ticking on £20m takeover bid for Ashley (Laura) Holding (ALY). An investment firm company lead by Manchester-born entrepreneur Michael Flacks has until March 25 to make a firm offer for Laura Ashley. Florida-based Flacks Group said on Monday it was in the “very preliminary stages” of considering a bid. If it did so, it would be no more than 2.748p a share in cash, valuing the retailer at £20m. Laura Ashley shares closed 7% higher on Monday at 3.47p, giving it a market value of £24.4m. However, a bid would face considerable obstacles given the opposition of chairman Andrew Khoo, whose family controls more than half of Laura Ashley shares.
Hammerson speeds up plans to sell shopping centres worth £500m. The boss of Hammerson (HMSO) vowed that “nothing is off the table” as it stepped up plans to sell shopping centres worth hundreds of millions of pounds after sinking to an annual loss. The retail property developer, whose assets include Birmingham’s Bullring and Brent Cross in London, reported a pre-tax loss of £267m for 2018, down from a £413m profit the previous year, after it was forced to write down the value of its portfolio by £450m. David Atkins, chief executive, said the valuation slump was due to declines in the UK, where dozens of retailers have been through insolvency in the past 18 months and many more have shut stores.
Provident Financial rejects hostile £1.3bn bid but faces struggle for survival. Provident Financial (PFG) has rejected a hostile £1.3bn bid from its former boss, but analysts predicted that it could fall victim to the takeover offer or a break-up. The troubled doorstep lender said the all-share bid from Non-Standard Finance (NSF) offered little value to shareholders and urged them to reject it. NSF founder John van Kuffeler, who was chief executive and then chairman of Provident for more than two decades, wants to regain control of the far larger but struggling competitor. The NSF bid has already won the support of Provident’s biggest investors Woodford, Invesco and Marathon, who jointly control more than half the shares.
End in sight for phone hacking scandal, says Reach chief. The chief executive of Reach Plc (RCH) has suggested that the end of the phone hacking scandal is in sight for the Mirror newspapers, as the publisher deals with the last few High Court claims against it. Simon Fox said there was no guarantee of when the final compensation payouts would be made, but that there were now only a handful remaining, more than eight years after the first allegations were formally made against the publisher. “We’re getting there,” he said. “The cash that went out in the last six months of the year was £3m, which is the smallest amount so far.
Hiscox profits jump despite claims surge. Profits at Hiscox Limited (DI) (HSX) have surged despite another year of natural disasters and other catastrophes resulting in a high number of claims for the London-listed insurer. After a reasonably smooth start to the year, a number of natural disasters, such as hurricanes and wildfires in the US, typhoons in Japan, hailstorms in Australia and large cyber and marine hull claims led to significant market losses in the second half. However, the FTSE 100 company still managed to make a pre-tax profit of $137.4m (£105m) in 2018, compared with just £39.7m a year earlier as the number of premiums it wrote increased across all divisions.
Persimmon hit by Help to Buy threat. Persimmon (PSN) was one of the biggest fallers on the FTSE 100, dropping 116p to £23.52 after reports over the weekend that the builder could be barred from the Help to Buy scheme. James Brokenshire, the Housing Secretary, is rethinking Persimmon’s inclusion in the scheme after complaints made against it, reported in The Times on Saturday. It has been accused of building poor quality homes, scoring three out of five for customer satisfaction on the annual House Builders’ Federation survey. Rivals Barratt and McCarthy & Stone scored five out of five.
Cake maker Finsbury keen to cash in on taste for veganism. The boss of Finsbury Food Group (FIF) said he was hoping to cash in on “exciting” new consumer interests, such as the rise of veganism, after the cake maker’s profits remained flat in the face of rising ingredients costs. “We are trying to react to change in consumer behaviour and enter into niche areas,” said John Duffy, chief executive. “Veganism has been the most obvious trend, especially in January, and over the last few months we have launched a vegan-style burger bun.” Finsbury hopes to emulate some of the success seen by high-street chain Greggs, which launched a vegan sausage roll at the start of the year. Last year the cake maker entered the free-from market with its bakery brand Wiso.
Kingsmill and Twinings owner warns of ‘very severe consequences’ on food supplies from a no-deal Brexit. Associated British Foods (ABF), the conglomerate behind Primark and one of the world’s biggest food producers, has issued a dire warning about the prospect of a no-deal Brexit. The FTSE 100 giant believes the failure of Theresa May to strike a deal with Brussels over the UK’s divorce from the EU will lead to food supply chains being “severely disrupted”, its finance chief John Bason told The Telegraph. “People need to understand the disruption that will come from it,” he added. “There could be very severe consequences on the availability of food.” Mr Bason had earlier lambasted the Government for keeping a no-deal Brexit on the table, telling Reuters it was “unbelievable” and “irresponsible”.
Lower margins squeeze shares in distribution giant Bunzl (BNZL). Worries about falling profit margins at Bunzl drove down shares in the distribution giant as it posted annual results. Bunzl supplies companies with products ranging from carrier bags to supermarkets, paper cups to coffee shops and safety gear to builders. Announcing figures for the year to December, the FTSE 100 business said that group operating profit fell 10 basis points to 6.8%. Frank van Zanten, chief executive, said a 50 basis point decline in operating margin to 6.9% in Bunzl’s UK and Ireland operations, which make up 14% of revenues, was due to “challenging markets”.
Questor: this foam-maker is hardly a household name – but many of its customers are. Buy. Questor share tip: Zotefoams (ZTF) lightweight foam sheets are bought by the likes of BMW, Nasa and Nike, and sales are growing strongly
