The Hong Kong business leader behind an audacious £32 billion bid for the London Stock Exchange Group (LSE) insisted yesterday that he had no regrets as he abandoned his offer in the face of his target’s persistent refusal to talk. Charles Li, chief executive of Hong Kong Exchanges and Clearing, said that his plan for a combined exchanges business spanning Europe and Asia was still “strategically compelling” and had been a gamble worth taking, in spite of criticism that it was unlikely to be accepted and was poorly executed.
Barclays (BARC) has been criticised for its decision to prevent customers withdrawing cash from post offices by pulling out of an industry-wide scheme. The move was described as “unjustifiable . . . and deeply retrograde”, by Rachel Reeves, chairwoman of the Commons’ Business, Energy and Industrial Strategy Committee, while Natalie Ceeney, who carried out a review of the public’s access to cash for the government, said that it was “damaging and counterproductive”.
China will respond with “firm and forceful measures” against a new round of American sanctions on its technology industry, its foreign ministry warned yesterday, as trade relations deteriorated further before crunch talks. World stock markets fell as hopes for progress on a truce faded before the latest round of high-level trade negotiations begins tomorrow. On Monday night, the US commerce department added 28 Chinese organisations to its export blacklist, in effect banning them from buying American-made components. The action mirrors that taken earlier in the year against Huawei, the Chinese network hardware manufacturer.
Picking up passengers from the strike-hit British Airways and Ryanair and charging them a little more for the pleasure has enabled easyJet (EZJ) to restrict the expected fall in its annual profits. Investors were hoping that the airline would report a performance benefiting from the demise of Thomas Cook and with little guidance on the current year, other than to say that it expected to expand its operations slowly. The results represent a recovery for Easyjet, which had reported record winter losses of £275 million in the first six months of its financial year as it absorbed rising fuel costs and coped with a price war, particularly in Germany, where it had acquired the operations of the failed Air Berlin.
Four new directors have been appointed to bolster a turnaround plan at Marks & Spencer Group (MKS) food business before its tie-up with Ocado. Last week M&S told investors and analysts that changes in its food division were focused on its aim to “protect the magic and modernise the rest”. Analysts at Berenberg, the investment bank, said that there were “green shoots” within M&S’s food business, while clothing continued to struggle. Pav Anand, Tesco’s strategy director, becomes head of food strategy and special products. Lisa Raschia, Sainsbury’s head of technical, joins as head of produce and horticulture as M&S strives to improve its fresh foods. M&S is also adding David Stokes, supply chain director at Danish Crown, as its head of sourcing and Laurissa Kuligowski from PWC as its commercial strategy and operations manager. They will report to George Wright, who joined from Tesco in April.
More than 1,000 Vodafone Group (VOD) stores in Europe are to close as part of a shake-up of the telecoms group’s estate. Nick Read, group chief executive, said yesterday that it planned to overhaul its 7,700 European shops by the end of its next financial year, transforming 40 per cent of the sites and shutting 15 per cent, or 1,155. The plans were said to be a response to the rise of online shopping, the telecoms industry’s poor record on customer satisfaction and Vodafone’s target of driving 40 per cent of group sales via digital channels by the end of March 2021.
Two of Britain’s leading recruitment agencies have warned that profits will be lower than expected as global political uncertainty has prompted employers to delay staff recruitment. Steve Ingham, chief executive of Pagegroup (PAGE), said that the company’s larger markets, including China, Britain and France, had suffered increasingly challenging trading conditions, although the performances in Germany, India and Latin America had been stronger. Robert Walters (RWA), its rival recruiter, said that its UK gross profit had fallen by 11% to £24.8 million in the three months to the end of September, hit by weak confidence among employers and candidates as they wait for a clearer picture of what Brexit will look like before advertising and applying for jobs.
Sir Martin Sorrell’s digital advertising agency has made its first move in the United States by acquiring Firewood, the largest marketing agency in Silicon Valley. The purchase is the latest in a series of acquisitions by S4 Capital (SFOR) since it was set up by Sir Martin in May last year. S4 Capital bought the San Francisco-based Firewood for $150 million, paying $112 million up front in an equal mix of shares and cash, with the remainder due if Firewood hits its operating targets for the year. It plans to finance the deal by raising £100 million of equity, with the rest of the funds being used for further acquisitions.
finnCap (FCAP) warned that profits were likely to dip slightly in the first half as the “political backdrop and challenging market conditions” took a toll. Revenues for the six months to September 30 would be £14.2 million, it said, with profits about £1.3 million, compared with revenue of £9.1 million and a profit of £1.3 million over a five-month period last year.
Analysts have warned investors to prepare for a glum outlook from ASOS (ASC) when the online fashion retailer reports its full-year results next week. The latest data from the British Retail Consortium showed that online sales almost stalled in September, edging 0.7% higher than in the same month of 2018 — the lowest monthly growth on record. Number-crunchers at UBS were already “cautious” about Asos’s ability to boost profits in the United States and Europe over the next 12 months and the BRC data means that they now have reservations about the UK, too.
Tempus – : Avoid. Exciting company in a dynamic market, but the high valuation is not an attractive entry point
Tempus – Vesuvius (VSVS): Avoid. Brave but battling in the teeth of market declines
