Smaller banks will lose out as big lenders bounce back, claims Royal Bank of Scotland Group (RBS) boss. Britain’s challenger banks will struggle to compete against the resurgent big six lenders, RBS chief Ross McEwan has said ahead of a contest for an £833m competition fund stumped up by the bank. Mr McEwan played down the threat posed by the growing band of challenger banks during a “fireside chat” at an event in the City today. The boss of the taxpayer-owned bank said small lenders would struggle as larger rivals such as RBS picked up speed after a decade of hefty restructuring and misconduct costs following the financial crisis.
Next close to online tipping point as it ramps up no-deal Brexit planning. Fashion chain Next (NXT) is close to reaching a tipping point with more than half its sales being made online as it unveiled a bullish outlook on a no-deal Brexit. The retailer expects its stores to deliver less than half of total sales this year – and only 30% of group profit – as a surging online performance counters a decline on the high street. It means website sales will have nearly tripled to £2.1bn over the past decade, marking a critical moment in its attempt to keep step with shifting shopping habits.
SSE buys out wind farm partners as it steps up clean energy plan. SSE (SSE) has stepped up its presence in wind power by buying out its partner in developing a pair of wind farms in the Firth of Forth and Firth of Tay. The big six energy giant said it would pay £118m for Fluor’s 50% stake in the Seagreen offshore wind projects, just months ahead of its exit from the domestic retail market. Martin Pibworth, SSE’s wholesale energy boss, said the Seagreen acquisition “aligns with SSE’s ambition” to boost its growth through owning, operating and developing clean energy projects.
The popularity of Scottish favourite Irn Bru has continued unabated despite a major recipe overhaul that has given a health kick to the notoriously sugary soft drink. Owner Barr (A.G.) (BAG), whose drinks portfolio also includes Rubicon, Strathmore and Funkin, posted a “solid financial performance” in the six months to July 2018. Boss Roger White told The Daily Telegraph: “It has been a very unusual period. “From the highs and lows of the weather, from the warmest summer to the beast from the east, CO2 shortages and the implementation of a new regulatory regime; there has been a lot of moving parts and we are just very pleased to have got through the period with a solid period.”
Comcast rounds up small shareholders in race for control of Sky. Comcast has appointed consultants DF King to round up small Sky (SKY) shareholders as it attempts to pass the 50% threshold required to seize control following its £29.7bn takeover offer. The US cable giant revealed this morning that it had already acquired 29.1% of Sky following a sweep of the hedge funds that bought up large stakes before a record-breaking head-to-head auction at the weekend. Now Comcast is attempting to secure the roughly 3% of Sky held by small retail investors. DF King specialises in soliciting shareholders in takeovers and AGM voting. Sky’s biggest shareholder, 21st Century Fox, has remain silent on plans for its 39% stake. Its offer in the in the auction fell significantly short of Comcast’s, which was immediately recommended to shareholders by Sky’s independent directors.
Around 30,000 Ryanair customers will suffer cancellations this Friday after cabin crew across six European countries launched a mass walkout. The Irish airline has cancelled 190 planned flights following an announcement by staff from Spain, Belgium, Holland, Portugal, Italy and Germany to strike. Ryanair Holdings (RYA) “sincerely apologised” to customers and said it has “done our utmost to avoid” the industrial action. The airline said that if the strikes continued, it would “inevitably” have to “look again at our capacity growth” this winter and summer – a warning that routes and staffing levels could be cut.
Imperial Brands looks to profit from vaping by next year. Imperial Brands (IMB), the tobacco giant behind Lambert & Butler, has linked staff bonuses to selling more vaping devices, as it hopes to make a profit from so-called “next generation products” (NGPs) by next year. The Bristol-headquartered company said its NGP ambitions “are reflected in our management incentives” to deliver compound annual growth of up to 150% over the next three years. This compares with a wider decline in sale of traditional tobacco products.
Airline shares were grounded in London after a “perfect storm” of surging oil prices and lingering fears of a no-deal Brexit sent the sector’s shares sliding. A second day of oil prices pushing up to fresh four-year highs stoked fears of a sustained spike in jet fuel costs. easyJet (EZJ) has 61% of its fuel hedged through to the end of its 2019 financial year while British Airways owner International Consolidated Airlines Group SA (CDI) (IAG) has hedged less than 50% of its fuel from the second quarter of next year. The US president said the oil cartel was “ripping off the rest of the world” but prices continued to march higher. Brent crude climbed as much as 1.7% to $82.55 per barrel. IAG dropped 27.2p to 659.4p while budget carriers easyJet and Wizz Air Holdings (WIZZ) tumbled 47.5p to £13.34 and 146p to £28.37 respectively. Oil giants BP (BP.) and Royal Dutch Shell ‘B’ (RDSB) tracked crude prices, helping the FTSE 100 rebound 49.15 points to 7,507.56 as trade-war fears faded. Thomas Cook Group (TCG) swerved the slide among airlines, rebounding 3.8p to 59.8p, after Jefferies analysts found “comfort” in the travel firm’s balance sheet following today’s profit warning.
Just Eat (JE.) clawed back 27.2p to 684.2p after The Daily Telegraph revealed rival Uber Eats could face competition from Amazon to snap up Deliveroo. Amazon is understood to have approached Deliveroo twice over a tie-up in recent years. The possibility of Uber Eats and Deliveroo joining forces knocked Just Eat shares 4.8% on Friday.
A profit warning at Low & Bonar (LWB) sent the building materials maker sliding 10p to 41.3p. Its shares sunk to their lowest level in more than six years after the firm was blown off course by climbing costs and rising competition.
Spread-betters tumbled after CMC Markets (CMCX) became another firm in the sector to be hit by new ESMA rules restricting contracts for difference trading. Plus500 Ltd (DI) (PLUS) slumped 73p to £14.50 while IG Group Holdings (IGG), which suffered a 5% drop in first-quarter revenue last week following the watchdog’s shake-up, sunk a further 22.5p to 754.5p.
Aquis Exchange (AQX), the challenger stock exchange dubbed “the Spotify of trading” for its subscription-based model, jumped 10p to 435p following its first results since listing. Revenue climbed 54pc to £1.5m at the interim stage.
StanChart becomes latest bank to pull funding for new coal power plants. Standard Chartered (STAN) has joined the rush of lenders pledging not to fund new coal power stations, bowing to pressure from environmental groups and some investors. The FTSE 100 emerging markets lender said the pledge demonstrated its commitment to supporting the Paris Climate Accord to limit global temperature rises to below 2C.
Hotel Chocolat ramps up foreign expansion plans after serving up tasty profits. Hotel Chocolat Group (HOTC) is ramping up its foreign expansion plans after defying a downturn on Britain’s high streets to serve up tasty annual results. The chocolatier, which began as an online subscription service but now has dozens of shops across the UK, will open its first shop in the US on New York’s Lexington Avenue and has linked up with new franchise partners in Japan and Scandinavia.
Card Factory will continue to open stores despite high street woes. Card Factory (CARD) chief executive has said the company will continue to open new shops despite low footfall and a decline in retail sales. Karen Hubbard, who has been at the helm since 2016, said almost all of the company’s stores are profitable and that it is only a “very small handful” that aren’t. She added that the company would “continue to take advantage of low rent”, aiming to reach parts of the UK where people do not have access to the gift shops.
The new boss of retirement housebuilder McCarthy & Stone (MCS) has abandoned growth targets and will cut jobs in a bid to boost margins in the face of a troubled housing market. Having previously aimed to build more than 3,000 new homes per year, the company plans to hold steady on its current level of around 2,100 and focus on cutting costs to improve its return on capital employed.
Questor: keep buying Babcock International Group (BAB) – its skills are in short supply and a 4.3% yield pays you to wait
