Bell secures £230m profit in flotation. Fund manager’s debut defies volatile markets. A former actuary has become one of the country’s wealthiest business leaders after shares in the investment firm he founded two decades ago rose almost by 40% on their market debut. Andy Bell, 52, co-founder of AJ Bell (AJB), was sitting on a paper fortune of nearly £230 million yesterday after the investment platform enjoyed a buoyant start to life as a public company. Bankers on the float were said to have received orders for several multiples of the stock being sold by Mr Bell and AJ Bell’s other main shareholders as the company came to market 22 years after being founded in Manchester. Mr Bell’s 25.5% stake was valued at £166 million after the shares were priced at 160p — the midpoint of a range between 154p and 166p — before soaring 37.5% as the company made its debut yesterday. By the close, Mr Bell’s holding had increased to £227.9 million, adding to the £18.6 million he made from selling a 2.5% stake in the listing.
Patisserie was warned about finances year before scandal. The former marketing chief of Patisserie Holdings (CAKE) flagged potential issues with the café chain’s financial figures to its board more than a year before the company said that it had discovered an accounting black hole. Nicola Hedley, who is suing Patisserie Valerie’s parent company for breach of contract and constructive dismissal, included information challenging some of the group’s revenue figures in documents relating to her claim that was sent to board members in July 2017. Lawyers filed Ms Hedley’s proposed claim at the employment tribunal in Birmingham one month after the board had been alerted in August. Her case raises more questions about the management of Patisserie Holdings. In October, the company suspended trading of its shares after revealing that it had discovered “significant, potentially fraudulent accounting irregularities”. It came close to collapse but survived after Luke Johnson, its chairman and biggest shareholder, provided two £10 million loans and shareholders backed an emergency £15 million placing.
Interserve forced into new rescue talks. One of the biggest outsourcing groups serving the government is in rescue finance talks as it looks to avoid a Carillion-style collapse. It is the second time this year that Interserve (IRV) has entered talks about restructuring its finances. Under the proposed deal, banks and other debt-holders would take a significant loss on their existing exposure as part of a debt-for-equity swap. Public shareholders would be virtually wiped out. Interserve provides meals for schools and hospitals, constructs and maintains government buildings and provides a string of other services, from asbestos removal to repairing flood barriers. It employs 75,000 people worldwide, 45,000 of them in the UK, and has a turnover of £3.2 billion, 70% of which comes from the government. A person close to Interserve’s advisers told the Financial Times that the business could be taken private early next year, making it “easier to hold talks with the banks and government and to keep the contracts coming in”.
Berkeley Group looks for opportunities outside capital as profits fall. An upmarket housebuilder believes that there are “opportunities to invest”, despite pressure on the market from Brexit and increasing red tape. Berkeley Group Holdings (The) (BKG) paused new land acquisitions in London in the first half of its financial year, but bought eleven sites outside the capital, including two in Birmingham. It said yesterday that it had spotted new market opportunities in London and the South East, where the group is concentrated. Berkeley was established in 1976 in Weybridge, Surrey. It has capitalised on land bought cheaply between 2010 and 2013, but a period of rising profits has come to an end. It reported a 26 per cent fall in pre-tax profits to £401 million for the six months to the end of October, though that was stronger that the 30% decline it had forecast in July. It upgraded its full-year pre-tax profit guidance by “at least 5%”, while leaving the longer-term outlook unchanged.
Thousands of jobs at risk in WPP overhaul. WPP (WPP) is expected to set aside £350 million for an overhaul of the advertising group, threatening thousands of jobs. Mark Read, its new chief executive, will reveal the restructuring at a meeting of City analysts and investors on Tuesday. The 51-year-old is under pressure to convince shareholders that he can stage a fight back against Google and Facebook, which dominate the booming digital ad industry. The cash will cover the cost of merging some of WPP’s biggest agencies, which could lead to significant redundancies. However, Mr Read is also on a recruitment drive as he seeks to bolster WPP’s fast-growing digital arms and revive its creative businesses. The conference will be a pivotal moment for Mr Read. The company has lost over half its value since the start of last year after a dramatic upheaval in the advertising business. Clients have been reducing marketing spending and forging closer ties with Google and Facebook.
Primark dresses for seasonal battle. Fears of a slowdown on the high street before Christmas and over the impact of Brexit were heightened yesterday when Associated British Foods (ABF) said that Primark had found trading tough last month. The owner of the value clothing chain said that unseasonably warm weather in November, when shoppers should have been out hunting for new coats, and declining shopper visits to the high street had hurt sales. Like-for-like sales were “just positive” in September and October, but were negative in November. Despite assurances about Primark’s profit — Michael McLintock, chairman of ABF, said: “With careful inventory management and improved margins, our expectation for the increase in Primark profit is unchanged” — shares in Associated British Foods fell by 108p, more than 4%, to £22.42 yesterday. Mr McLintock’s reiteration that the group expected profit in its sugar division to be “significantly lower” this year put further pressure on the stock.
Neil Woodford’s investment firm has dumped almost its entire holding in BTG (BTG), just over a fortnight after the closely followed fund manager had backed a £3.3 billion takeover of the FTSE 250 drugs group. It emerged yesterday that Woodford Investment Management, previously a top three shareholder in BTG, had sold 16.2 million shares to Sand Grove Capital Management, a hedge fund.
International miners and energy groups rallied as the Opec oil-producing cartel agreed to cut output by 1.2 million barrels a day and as the price of Brent crude surged more than 5% to go back above $63. Anglo American (AAL) jumped 51½p to £16.07¾ and Glencore (GLEN) gained 8½p to 279½p. Royal Dutch Shell ‘B’ (RDSB) shares picked up 67½p to £23.42½ and BP (BP.) gathered 11½p to 514¾p. The oil-linked jump meant that in the midcaps Tullow Oil (TLW) rose more than 7%, or 13p, to 189½p, while Cairn Energy (CNE) added 7¾p to 167¾p. Premier Oil (PMO) surged 14.75%, or 9¾p, higher to 75¾p, helped by the completion of the sale of its interest in the Babbage field and as it stuck to its guidance on full-year production.
Tesco (TSCO) was a big gainer, putting on 5¼p to 199p after UBS argued that there was a “decent possibility” that the grocer would embark on a programme to buy back shares next year.
Just Eat (JE.) recovered some of its poise after a sharp drop earlier in the week on confirmation that the takeaway delivery group would be relegated from the leading index. Its shares picked up 16½p to 551½p.
Sales battle is being won at Games Workshop Group (GAW). The creator of Warhammer, the fantasy war game, made an operating profit of £41 million on sales of £124 million — improvements of 6% and 14%, respectively — in the six months to December 2. In an update ahead of its interim results, Games Workshop said that its trading was in line with expectations for the full year. It declared a dividend of 30p. Games Workshop, which makes its miniature models in Nottingham, was the best-performing share in the FTSE 250 midcap index last year, rising more than 250%. It warned investors in October of some uncertainty over trading because of Brexit, but said yesterday that “the Warhammer hobby is in great shape” in its core markets. Shares in Games Workshop rose another 130p, or more than 4%, to close on £31.25 last night.
Adderley family shares in Dunelm Christmas cheer. Christmas has come early to the Adderley family, with various members being givien large tranches of shares in Dunelm Group (DNLM). The furnishings company has disclosed that Bill Adderley, the 70-year-old founder and life president of Dunelm, has gifted 3.3 million shares to his wife Jean Adderley and 36 million shares to his son Will Adderley, 48, who is deputy chairman of Dunelm, taking his stake to more than 30%. After the transfers Bill Adderley will not have any shares held in his name and the move is thought to be driven by his long-term family financial planning. The Adderley family will still control just over 51%, or 103.3 million shares. Shares in Dunelm edged up by a penny to 610p.
Fastjet on the brink. Fastjet (FJET), the African airline that was set up by Sir Stelios Haji-Ioannou seven years ago, is again close to bankruptcy. In recent months, the London-listed carrier, which flies from Tanzania and South Africa, has regularly warned that it is running out of cash. In a fundraiser last month it was able to conditionally raise only £550,000. With only £315,000 of usable cash left in its coffers, the money could run out by the end of next week, the airline said. In a statement to the stock market, Fastjet said that it “would have no choice but to formally engage insolvency practitioners”. Sir Stelios no longer has an interest in the airline.
Landsec buys £80m site. Land Securities Group (LAND) has bought a 1.6-acre site in Southwark, south London, near the Tate Modern gallery for £81.7 million. The company, one of Britain’s biggest property developers, has been wary about new developments since 2014 and halted speculative work after the Brexit vote. The former Land Securities said at its results last month that it was preparing £3 billion of developments in the event of a “good [Brexit] deal”.
