Unilever under pressure after dropping exit plan. City wants restructuring to be shelved as rebels win day. Unilever (ULVR) is facing shareholder pressure to abandon its restructuring completely after withdrawing plans to relocate to the Netherlands yesterday. In a U-turn, the consumer goods company bowed to mounting pressure in the City and conceded its proposals had not received backing from a “significant group of shareholders”. Unilever insisted that it had, however, received “widespread support for the principle” behind simplifying its 88-year-old Anglo-Dutch legal structure.
Profit warning leaves Quiz seeking answers. Shares in the fast-fashion retailer Quiz (QUIZ) have tumbled by more than one third after the company warned that it would miss profit targets. In the latest evidence of the pressure on retailers, Quiz blamed the profits warning on slower sales of its clothing through third-party websites and its shops. The Glasgow-based retailer was founded in 1993 and now has more than 250 shops and concessions. It competes with the likes of Boohoo and Primark at the value end of the women’s fashion market but has recently expanded into menswear and bridalwear.
Smurfit Kappa shelves £50m plant over Brexit fears. Europe’s largest cardboard box and packaging manufacturer has shelved plans for a £50 million British plant and warned that leaving the European Union poses a “real risk” to jobs. Smurfit Kappa Group (SKG) urged ministers to retain European rules on goods and services and said that a disruptive Brexit would make it more expensive to work in the UK. The Irish packaging company, which has more than 2,000 staff across 42 sites in Britain, had planned to start building a new Midlands plant this year.
Funding Circle woes weigh on fellow unicorns. A grim opening week for the lender augurs ill for fintech companies eyeing a float. It was meant to be the flotation that put London on the map as a global centre for technology companies to list, while showcasing one of the UK’s rare unicorns”. Instead, the initial public offering (IPO) of Funding Circle (FCH) has quickly become a debacle as the peer-to-peer lender’s shares suffered one of the worst opening weeks in the City’s modern history. So what went wrong? One senior UK banker is in no doubt: “It was massively overpriced, massively overhyped and anyone who looked could see that,” he said.
Takeover talk makes Intu hot property. Shares in Intu Properties (INTU) soared yesterday after it emerged that the billionaire John Whittaker had formed a consortium to try to take the shopping centre group private. Mr Whittaker’s Peel Group confirmed on Thursday night that it was working on a deal to buy Intu with Olayan Group, a Saudi conglomerate, and Brookfield, a Canadian private equity group. The trio said they were considering making a cash offer for Intu in a move expected to trigger an auction for the struggling retail group.
The private equity arm of Lloyds Banking Group (LLOY) is hoping to cash in on the booming “staycation” market by selling a caravan park operator for more than £100 million. LDC is understood to have appointed DC Advisory to canvas interest in Away Resorts, the operator of six leisure parks with a turnover of more than £50 million and underlying earnings of between £10 million and £15 million.
Gold miner Centamin’s forecast losing its lustre. Centamin (DI) (CEY) has cut its production guidance for a second time this year after more problems at its mine in Egypt. Shares in the FTSE 250 group fell 15% yesterday and have lost more than two-fifths of their value since its first warning in May. Centamin said yesterday it now expected to produce about 480,000 ounces of gold for the year, down from its guidance in May of 505,000-515,000 ounces issued and against original plans for 580,000 ounces.
Customers quit First Utility, the supplier Shell bought to take on the Big Six. The UK energy supplier acquired by Royal Dutch Shell ‘B’ (RDSB) as a vehicle for growth has lost tens of thousands of customers since agreeing the deal. First Utility supplied gas and electricity to 805,000 UK households when it agreed in December to be taken over by the Anglo-Dutch energy giant, which said it would use it to challenge the Big Six suppliers. Its UK energy customer numbers have since fallen to 750,000, a drop of 7%, as it faces competition from cut-price start-ups that it claims are unsustainably cheap. It also has customer service issues.
Royal Mail heading for relegation zone. Shares in the owner of Parcelforce, which has become an early candidate for relegation from the FTSE 100 at the next reshuffle in December, lost a further 2.6% of their value, ending the day down 9¼p at 345p. The decline, driven by worries about the dividend, means that Royal Mail (RMG) has lost just under 30% since it took the market by surprise and warned that a productivity shortfall among its postal staff meant that it would have to cut its cost-savings target by £130 million. It also warned that operating profits this year would be well below last year’s.
Fallers in the Footsie were led by miners and natural resources groups, exposed to fluctuating currencies such as the dollar and the headwinds of macroeconomic events. Antofagasta (ANTO) fell by more than 5%, or 47½p, to 827p, while Anglo American (AAL), off 74p to £16.69¼ and Rio Tinto (RIO), 157p worse at £37.44½, also suffered.
Aston Martin Holdings (AML) lost 100p to £17.00, a fall of more than 5.5% that left the luxury carmaker a full £2 short of its issue price at its London listing this week.
Rightmove (RMV) fell almost 2.9%, or 13¼p to 452½, spooked by a report by the Halifax that showed house prices falling for the second month in a row in September.
Kingfisher (KGF), the DIY retailer that owns B&Q in Britain and Castorama in France, slid 6p, to 250p as the excitement about the prospect of a break-up after a note by Northern Trust Capital Markets earlier in the week faded.
Ocado Group (OCDO) dropped 4.8%, losing 40½p to 803½p after an anonymous institution put through a big sell order that rattled the market during Thursday trading.
Among the risers were the utilities, regular favourites in times of market volatility because they are seen as safer assets with a reliable dividend. Severn Trent (SVT) added 32½p to £18.12, National Grid (NG.) was up 9½p at 786½p and United Utilities Group (UU.) put on 4½p to 699p.
Informa (INF) was helped 9¼p higher to 748½p after analysts at Barclays reaffirmed their 885p price target and said they were confident that the exhibitions and event business would hit their estimate on profit margins of 30.8%
Intu Properties (INTU) shot up more than 27%, leaping 40½p higher to 189p after it emerged that the owner of the shopping centre group’s largest shareholder, Peel Group, was working on a deal to try to take it private. That triggered talk of a round of fresh consolidation in the sector and Hammerson (HMSO), also in the mid-market index, rose 12p to 440½p, though it later said it had sold half of its stake in the Highcross shopping centre in Leicester for £236 million to a new joint venture partner. It will continue to manage the centre. On the FTSE 100 Land Securities Group (LAND) rose 8½p to 848½p and British Land Company (BLND) added 8½p to 585¼p.
Centamin (DI) (CEY) went sharply the other way, losing 16%, or 17½p, to 91¼p after it cut its annual output target for the second time this year. Its fellow miner Kaz Minerals (KAZ) falso fell, shedding 25¼p to 526p.
CLS Holdings (CLI) was an early gainer after analysts at Berenberg initiated their coverage with a “buy” rating and a price target of 265p. Having traded higher all day, it faded in the closing minutes and ended off 1p at 214p.
Plus500 Ltd (DI) (PLUS) felt the market’s chills about spread-betters as new regulations bite and lost 81p to £13.10.
