Ryanair prepares to take off without O’Leary. Ryanair Holdings (RYA) revealed that it dived into the red in the Christmas trading quarter and announced what appeared to be the first steps in a succession plan to replace Michael O’Leary as chief executive. With competition between carriers as cut-throat as ever, Europe’s busiest short-haul airline reported losses just short of €20 million in the three months to the end of December as it was forced to slash fares. In the same quarter last year it made profits of €105 million. The budget airline, which is based in Ireland, also reported that although Mr O’Leary has tied himself to completing his third decade leading Ryanair, plans are being hatched to appoint four executives to run the group on a day-to-day basis.
Brexit worries push construction sector to brink. Uncertainty about Britain’s looming exit from the European Union has pushed growth in the construction sector to its weakest level in ten months. The IHS Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) slid to 50.6 last month from 52.8 in December, its worst level since the industry was hit by snow last March. That reading missed the 52.4 expected by economists polled by Reuters. Commercial construction project work was the worst affected in January and fell for the first time in ten months. Residential work only saw a “modest” expansion and civil engineering activity grew “marginally,” according to the survey. “UK construction growth shifted down a gear at the start of 2019, with weaker conditions signalled across all three main categories of activity,” said Tim Moore, economics associate director at IHS Markit.
Ferrexpo auditors uncover ‘unexplained discrepancy’ at charity. A Ukrainian iron ore producer has given warning that its auditors have uncovered “unexplained discrepancies” at a charity it funds, sending its shares down sharply. Ferrexpo (FXPO) said that its board was carrying out an independent review into the issues at Blooming Land, which was set up to carry out its corporate social responsibility programmes. It said that Deloitte might qualify or modify its opinion on the miner’s 2018 results, due to be published on March 20, if the review was not completed or not completed favourably by then. The announcement comes days after the abrupt resignation of its senior independent director and follows the company’s disclosure last August of transactions involving its funds to the charity and another company controlled by Ferrexpo’s chief executive.
More firepower for Metro short‑sellers. The second biggest shareholder in Metro Bank (MTRO) has lent out a chunk of its stake in the company in a move that could give ammunition to hedge funds betting against the troubled lender. Fidelity, the American investment giant that owns 7.9 per cent in total of Metro, has put a 3.1% stake in the bank out on loan, according to a stock market filing. It comes as hedge funds ratchet up bets against Metro amid talk that it will be forced into an emergency fundraising after revealing a £900 million blunder on its loan book.
Ashley told to keep promise to brief MPs on House of Fraser. Mike Ashley is facing growing political pressure to follow up his past combative appearances in parliament with a personal meeting with MPs to discuss his plans for House of Fraser. Clive Betts, chairman of the Commons housing, communities and local government select committee, has written to the billionaire owner of to remind him that he has so far failed to fulfil his promise to meet Liz Twist, MP for Blaydon, and other MPs with House of Fraser stores in their constituencies. The select committee is conducting an inquiry into the future of Britain’s high streets and town centres.
Fees bonanza for advisers in sale of snake bite drugs firm BTG (BTG) to Boston Scientific. Bankers, lawyers, accountants and public relations executives are to reap almost £41 million from BTG as part of its £3.3 billion takeover by an American rival. The drugs company has agreed to pay £36.7 million in financial and corporate broking fees, £3.5 million in legal advice, £300,000 to accountants and £400,000 in PR fees as part of the acquisition by Boston Scientific. Advising BTG, a FTSE 250 company, on the deal are Goldman Sachs, JP Morgan Cazenove and Rothschild. Allen & Overy is its legal adviser and FTI Consulting is handling the PR.
Carbon plan captures big companies’ imaginations. A company founded by a chemistry professor has secured investment from both BP (BP.) and Drax Group (DRX) to develop its novel technology for capturing carbon emissions. C-Capture, which was spun out of the University of Leeds in 2009, said that it had raised £3.5 million in an equity funding round led by the oil major, the power plant owner and IG Design Group (IGR), the technology commercialisation company. It said that it would use the cash to further develop its method for removing carbon dioxide emissions from power stations and industrial facilities and to conduct more trials.
Tech incubator Allied Minds under siege by Crystal Amber. Activist investor Crystal Amber has built a secret stake in Allied Minds (ALM), the US-based technology incubator backed by Neil Woodford. Richard Bernstein, Crystal Amber’s aggressive fund manager, is understood to have bought just under 2% of Allied Minds. Crystal Amber is known to target high executive salaries and the strategies of boards.
‘Faked voucher sales’ at Patisserie Valerie. Patisserie Holdings (CAKE) staff used fictitious Groupon vouchers to inflate the scandal-hit cafe chain’s sales, according to sources familiar with a report by the accountant PwC. Employees allegedly recorded voucher sales in the company’s ledgers when some of those sales may never have taken place. “It would look like they had made a sale that had been settled with a Groupon voucher, when in fact they had never made a sale in the first place,” said a person familiar with the contents of the PwC report.
Domino’s franchisees, unhappy with boss David Wild, halt new stores in profits row. Domino’s Pizza Group (DOM) faces a growing rebellion from its franchisees — almost all of whom are believed to be refusing to open stores for the first half of this year. In a move that suggests the rancour between the company and its store owners is far worse than thought, almost all the franchisees have joined a group to lobby for a greater share of profits. The Domino’s Franchisee Association has secured the support of about 90% of the 56 franchisees. Association members are prepared to not open stores. They have also agreed to boycott the company’s annual awards next month, meaning the event is likely to be cancelled.
Ocado boss Tim Steiner faces grilling over M&S tie-up. City to demand details on talks with high street giant. Ocado Group (OCDO) boss Tim Steiner will be pressed on the nature of the online grocer’s talks with Marks & Spencer Group (MKS) when its annual results are revealed on Tuesday. The companies are said to be in discussions about a tie-up that would see M&S use or acquire parts of Ocado’s logistics network to begin selling its food and drink online. An agreement between the two could herald the end of Ocado’s two-decade partnership with Waitrose, due to finish next year. Sources say the relationship between Ocado and Waitrose has been difficult. Under the agreement, the supermarket is said to receive tens of millions of pounds in fees a year for allowing Ocado to sell its products. The John Lewis Partnership’s food division also reaps the benefits of a joint buying agreement with Ocado.
Glaxo Smith Kline, led by Emma Walmsley, pins hope on cancer drugs. GlaxoSmithKline (GSK) will try to burnish its cancer research credentials this week as it seeks to prove it can replace lost revenues from its top-selling asthma drug, Advair. Dutch drugmaker Mylan secured approval last week for a copycat version of Advair, meaning it stands to take a chunk of Glaxo’s sales from the inhaler, which were estimated to be £1bn last year and are expected to fall to £445m this year. Under the leadership of chief executive Emma Walmsley, Glaxo has been working to rebuild its portfolio of cancer treatments. In December it agreed to spend $5.1bn (£3.9bn) on US oncology specialist Tesaro. The move provoked mixed responses from the City.
Debenhams steps up store closure plan. Debenhams (DEB) has advanced plans for a controversial form of insolvency known as a company voluntary arrangement (CVA) by instructing property agents to determine the rent it should pay on its stores. The CVA — a procedure in which struggling retailers can close stores and reduce rents — could be launched before Debenhams’ next quarterly rent payment date falls due in late March. The proposal is said to involve up to 20 store closures this year, depending on the rent reductions it achieves across the rest of its estate of 166 stores.
CYBG (CYBG), led by David Duffy, under fire. Alleged victims of mis-selling by Clydesdale Bank will be able to claim compensation under a review of the historic mistreatment of small business customers funded by the banking industry. A business ombudsman for historic cases will be set up as part of a dispute resolution service proposed by the trade body UK Finance. The scheme is voluntary but all the leading banks are expected to be involved. Clydesdale has been accused of selling loans with complex interest rate swaps to business owners between 2001 and 2012. Clydesdale, now branded Virgin Money and led by David Duffy, said: “[Clydesdale owner] CYBG fully supports the UK Finance proposals for reform, and will continue to play an active role in the implementation steering group.”
Centamin offers the chance to strike gold. Bullion has risen steadily since November, closing last week at $1,317 an ounce. Analysts expect the recent rally to continue thanks to America’s trade war with China and tensions with Saudi Arabia, which are pushing flighty investors towards more secure assets. Hoping to take advantage of the recovering price is Centamin (DI) (CEY). When its Sukari mine began production in 2009, it became the country’s first large-scale modern gold mine. Last month, Centamin said that output from Sukari had fallen 13% in the past year to 472,418 ounces. The shares nosedived as disappointed investors took flight. They have gradually recovered and closed last week at 118.4p — although analysts at Berenberg reckon the lift has largely been due to momentum in the gold price. However, there are signs that Centamin is turning a corner. Analysts at Panmure Gordon have a 140p target on the stock, claiming that many of its problems have been addressed. It is due to provide an update in its full-year results this month. Centamin, which also has projects in Burkina Faso and Ivory Coast, has had a mixed run of late. For those with an appetite for risk, however, the recent downturn in its share price could provide the perfect opportunity to dig for treasure.
