Patisserie Valerie consumed by Irish private equity firm Causeway Capital Partners which has bought 96 of its 121 shops. The deal, struck early this morning with KPMG, the administrators, will preserve the majority of Patisserie’s 2,000 jobs. The total price paid by Causeway and AF Blakemore, the company that owns Spar, was £13 million, comprising £10 million in cash and £3 million deferred consideration. Baker & Spice, which has five branches, and was also owned by Patisserie Holdings (CAKE), has not yet been sold but KPMG said there was “strong interest” in the acquisition and it would provide an update later today. Blakemore has acquired all 21 of Patisserie’s branches of Philpotts. Patisserie’s shareholders, including its majority shareholder Luke Johnson, 57, the executive chairman who owns about 30% of its stock, will be wiped out.
Restaurant Group boss departs due to ‘personal circumstances’ after Wagamama takeover. Restaurant Group (RTN) stunned investors this morning by announcing the resignation of its chief executive less than two months after he pushed through the controversial acquisition of the Japanese noodle bar chain Wagamama. The Frankie & Benny’s and Chiquito operator said that Andy McCue, 44, had informed the board of his decision to leave “due to extenuating personal circumstances”, although he would remain in the role while his successor was being recruited. Shares of the company, which have been battered by investor scepticism over the wisdom of the £559 million Wagamama deal, slumped by 13.5% on the news, losing 19¾p to 126¼p in morning trading, valuing the group at only £621 million.
Astrazeneca sales rise for first time in a decade. One of Britain’s biggest pharmaceutical companies has returned to growth for the first time in almost a decade after turning around its pipeline. AstraZeneca (AZN) said product sales had increased 4% to more than $21 billion last year, its first annual growth since 2009. The revival was driven by the successful release of new medicines and by emerging markets, led by China, where sales rose 25%. Cancer treatments were particularly successful, with sales up by 49%, led by Tagrisso and Lynparza, which both doubled. Total revenue, which also includes income from non-core drugs that are spun-off to third-party drugs companies, fell 2% to $22.1 billion and the higher costs from putting out new drugs pushed operating profit up 7% to $3.4 billion.
Micro Focus International (MCRO) topped the FTSE 100 this morning after the software developer’s revenue fell less than expected. The company, which has faced challenges with its takeover of the bulk of Hewlett Packard Enterprises, said that group revenue for the 12 months to the end of October fell 5.3% to $4.1 billion. It had previously guided for a revenue drop of between 6% and 9%. Adjusted earnings increased by 9.2% to $1.5 billion, driven by a 4.6 percentage point increase in its margin to 37.7%. Analysts at Barclays said: “Versus the guidance and what we already know, this is a very reassuring update for holders of Micro Focus, in our view.”
Convatec Group (CTEC) plummeted almost 20% on a downbeat outlook for the year ahead. The company downgraded its 2019 forecasts by about 10% before restructuring costs. The shares tumbled 27½p to 120¾p.
Restaurant Group (RTN), the owner of the Frankie & Benny’s and Wagamama food chains, fell 20p, or 13.6%, to 126p after it announced that its chief executive was stepping down due to “extenuating personal circumstances”.
Pressure on Plus500 Ltd (DI) (PLUS) spreads to market listing prospectus. Questions have been raised about the accuracy and candour of the full listing prospectus last year of Plus500, the financial bets company that shocked investors this week with a big profit warning. Plus500 said in the prospectus in June that windfall profits/losses gained from customers’ trading positions amounted to only “a marginal component” of the group’s overall revenues. However, in disclosures alongside the profit warning on Tuesday, it said that it had lost as principal $103 million in 2017, equivalent to more than 23% of revenues for the year.
Energy broker Utilitywise collapses. More than 570 jobs have been lost and a further 170 are at risk after the failure of an energy broker. The Tyneside-based Utilitywise plc (UTW) called in administrators yesterday after failing to raise funds to keep trading. The administrators from FTI Consulting immediately closed its biggest division, which is understood to have resulted in 576 people being made redundant. There are hopes of saving close to 170 jobs in other divisions that are not in administration and are up for sale.
Whitbread’s plan to keep wolves from door. The Premier Inn owner wants to accelerate its latest reinvention as a specialist hotels group. Whitbread (WTB) has proved itself to be a master of reinvention since Samuel Whitbread became a partner in a brewing business in London in 1742. The question being asked last night after a crucial City strategy briefing was whether plans for its latest incarnation, a “focused hotel company”, would be sufficient for the company to preserve its independence. Since the group announced that it was selling its Costa Coffee business to Coca-Cola for £3.9 billion last year, there has been speculation that its Premier Inn business, Britain’s biggest hotel operator, was likely to attract interest from rivals including Intercontinental Hotels Group and Marriott International, or private equity firms, such as Blackstone.
IHG books itself into luxury resort market. InterContinental Hotels Group (IHG) has checked into the $1,000-a-night resort market after agreeing to buy Six Senses for $300 million from Pegasus Capital Advisors. Six Senses operates — but does not own — 16 hotels and resorts with 1,350 rooms and 37 spas in locations such as the Maldives and Thailand. It has a further 18 management contracts and 50 other deals under “active discussion”. IHG plans to expand to at least 60 properties. Rooms cost $600 a night on average, but can rise to more than $1,000. IHG, a FTSE 100 company, was created in 2003 via a demerger from Mitchells & Butlers, the pub operator. It has 5,500 hotels, mostly franchises and management contracts, with 826,000 rooms in almost 100 countries. Its brands include Holiday Inn, Crowne Plaza and Indigo. Six Senses will sit at the top of its luxury portfolio with the Intercontinental, Regent and Kimpton brands.
Galliford Try takes a £26m dent from road project delays. The Aberdeen bypass has delivered a further £26 million hit to the finances of Galliford Try (GFRD). The construction group, which has worked on the Forth Bridge near Edinburgh and the retractable roof on the Centre Court at Wimbledon, said that the write-off was because of completion delays to the road, which had cost it about £150 million. The company, formed in 2000 with the merger of Galliford and Try, also builds homes under its Linden Homes brand and develops for housing associations and local authorities. The contract for the Aberdeen bypass was agreed with Carillion and Balfour Beatty in 2014. It was bid for under a fixed-price basis, which has eaten into the company’s cash position. The collapse of Carillion last year has meant that the remaining partners had extra costs to cover, leading to Galliford Try tapping its shareholders for £150 million last year.
BT chiefs ‘knew of Italian accounts fraud’. Three former BT Group (BT.A) executives allegedly were aware of bookkeeping fraud at its Italian business, according to local reports of a preliminary criminal investigation. A document prepared by Italian prosecutors claims that a network of people in BT Italia exaggerated revenues, faked contract renewals and invoices and created bogus supplier deals in an attempt to hit bonus targets and mask its financial performance. The document, reported by Reuters, names Luis Álvarez, 57, former head of BT’s global services division, which included the Italian business, Richard Cameron, its former finance officer, and Corrado Sciolla, formerly BT’s head of continental Europe, on a list of 23 suspects. The trio are accused of setting unrealistically high commercial targets and being complicit in false accounting, according to the report.
Barclays’ bill for Brexit reaches £200m. Barclays (BARC) has put a number on the cost of moving roles and assets out of the UK in anticipation of Brexit for the first time, saying that the bill is up to £200 million. Sir Gerry Grimstone, 69, a main board director of the banking group as well as chairman of the non-ringfenced part of Barclays, told a conference in Dublin: “We’ve certainly spent 100, 150 or 200 million [pounds]”. Barclays has beefed up its operation in Dublin since the Brexit referendum, doubling the number of roles to 300 to make sure that European clients can be offered a seamless service in the event of Britain leaving the European Union without a deal on March 29. It also has expanded in Frankfurt.
Dunelm stockpiles key goods over Brexit fears. A homewares retailer has become the latest company to stockpile products in readiness for Brexit. Dunelm Group (DNLM) said that despite importing less than 1 per cent of its goods from European Union countries, it had identified risks from potential disruption at “deep-sea” ports after Brexit. “Actions have been taken within the business and throughout our supply chain to mitigate these risks, such as purchasing incremental stock of some bestselling lines and securing additional supply chain capacity,” it said. Dunelm also said that about 2.5% of its employees were European Union nationals and that they would be receiving support to obtain “settled status if and when needed”.
Tesco homes in on housing scheme for London store site. Tesco (TSCO) is planning to turn one of its supermarkets in northeast London into 1,400 homes. The grocery chain has formed a partnership with Weston Homes, a housebuilder, to redevelop the ten-acre site next to Goodmayes railway station in Redbridge, east London. The plans include a new Tesco store, a primary school, workspace for businesses, cafés and landscaped public areas. About 35% of the homes will be affordable. Tesco has a £20.7 billion property portfolio, of which £13.9 billion is in the UK and the Republic of Ireland. It has been buying stores that it occupies to make rent savings and it announced plans in 2014 to build fewer large stores and to develop some sites for housing.
Smurfit Kappa falls to loss after Venezuela unit seized. The cost of doing business in Venezuela and other exceptional items have sent Smurfit Kappa Group (SKG) into the red. The FTSE 100 paper and packaging company reported a €404 million loss for last year, when it was forced by President Maduro’s regime to pull out of the country. Before its Venezeulan crisis and other one-off costs, Smurfit Kappa was claiming a €938 million pre-tax profit for the 12 months, up 56%, on revenues of €8.9 billion, 4% higher. The closure of its Venezuelan operations led to €1.2 billion of account writedowns, on top of €66 million spent restructuring its businesses elsewhere, defending a hostile takeover and losses on a German disposal.
Tempus – Imperial Brands (IMB): Buy. The shares are cheap, offer a handsome dividend and it has developing markets
Tempus – Clinigen Group (CLIN): Avoid. Compelling business model but shares don’t obviously offer value
