RBS shareholders reap rewards after profits double. Royal Bank of Scotland Group (RBS) more than doubled its profit last year and will hand back 11p a share in dividends to shareholders. The payout beat expectations and will please shareholders, who had their first dividend since the financial crisis from the state-controlled bank in August. The bank’s shares initially fell when the market opened first thing but later recovered ground and were 3p higher at 244¾p in the run-up to noon as analysts noted that the results were dramatically ahead of what had been expected. The distribution will be in the form of a 7.5p special dividend and a 3.5p final ordinary dividend, which follows the 2p interim dividend in the summer. The payouts come after RBS spent years building up capital to deal with a string of regulatory and conduct problems that are now largely resolved.
Vodafone hands £18m audit contract to EY. Vodafone Group (VOD) has appointed new auditors after it ditched PWC amid a legal row over the collapse of Phones4U. The telecoms giant has handed its audit contract, which is worth about £18 million a year, to EY, another Big Four accountant. It began lining up alternative auditors late last year after shareholders accused PWC of having a conflict of interest. In December Vodafone was named as a defendant in a legal action brought by PWC, which is also the administrator to the mobile phone operator Phones4U, which collapsed in 2014. Along with rival networks O2 and EE, Vodafone has been accused by some creditors to Phones4U of causing its collapse by colluding to pull contracts. The legal action is being brought against the network owners and will attempt to claim hundreds of millions of pounds in damages.
Premier Foods puts Ambrosia back on the shelf. Premier Foods (PFD) has pulled its proposed sale of Ambrosia Custard after failing to find a buyer at the right price, blaming it on the “present business climate”. The UK food manufacturer, best known for making Mr Kipling cakes and Oxo stock cubes, said that a number of parties had expressed interest in the business and it had subsequently engaged in detailed discussions with a small group of potential buyers, but a deal had not been possible. In a statement Premier Foods said: “The board has concluded that in the present business climate the process will not result in a satisfactory financial outcome. As a result these discussions have now concluded.” It is the latest setback for Premier Foods, which in the past year has suffered a large investor revolt that ultimately resulted in the departure of Gavin Darby, its chief executive.
Plus500 ‘may have misled shareholders’ over losses. Annual report failed to reveal $103 million hit. The financial betting company Plus500 Ltd (DI) (PLUS) told investors it had not suffered losses from client trading activity in 2017 when it had taken a $103 million hit, raising questions about whether it may have misled shareholders. Disclosures from the FTSE 250 company this week about its finances contradict what it said in its last annual report, signed off by its chairwoman, Penny Judd, in March 2018. It is understood the company only discovered that what it had said in the annual report was wrong on Tuesday, the same day it issued a profit warning in its annual results that sent its shares down 31% and sparked questions from analysts about the timings of its disclosures.
We’re going back to basics, says Patisserie chief after rescue. Patisserie Holdings (CAKE) will have to win back its reputation for selling cakes under its new owners and distance itself from its accounting scandal, the chief executive has said. Steve Francis, 57, who was brought in to run the business in November, said that Patisserie Valerie must focus on “going back to basics, putting time between us and all the history”. The café chain was rescued from administration yesterday by Causeway Capital Partners, an Irish private equity firm, which has bought 96 of its 121 stores. AF Blakemore & Son, which owns Spar, bought all 21 of Patisserie Valerie’s branches of Philpotts.
Interserve faces £66m hit if rescue plan blocked. Interserve (IRV) will be forced to make a £66 million immediate payment to its lenders if a refinancing deal is blocked by its largest shareholder. The payment could threaten the future of the outsourcing company, which has been battling to secure a rescue in which lenders would take control in a debt-for-equity swap. The deal would avoid a Carillion-style collapse at Interserve but has angered some shareholders as it would render their holdings effectively worthless. It emerged that the terms of a financing package secured by Interserve’s board last year included a provision that would trigger the large payout if a wider refinancing is not approved by investors, according to Sky News, which first reported the provision.
Pascal Soriot aims to stay as Astrazeneca ends losing streak. The chief executive of AstraZeneca (AZN) says he plans to remain in charge of the pharmaceutical company, dispelling speculation over his future. Pascal Soriot said yesterday: “I’m committed to this company for the next number of years.” Spencer Stuart, the recruitment agency, has been assisting with “continued routine” succession planning, its annual report shows. The comments from Mr Soriot, 59, the company’s boss since October 2012, came after it posted annual results confirming its return to growth for the first time in almost a decade. In a turning point for the Anglo-Swedish company, product sales rose 4% to more than $21 billion in the year to the end of December, its first underlying rise 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 treatment sales, which Mr Soriot has focused on, were particularly strong, rising by 49%, led by Tagrisso and Lynparza.
Ashmore chief cuts his stake to ease shareholder unrest. One of the City’s most media-shy plutocrats has announced plans to extract as much as £111 million a year from his fund management business to pacify outside shareholders accusing him of trying to take creeping control of it. Mark Coombs, founder and chief executive of Ashmore Group (ASHM), said he planned to reduce his 39% stake to less than 30% by selling up to four percentage points of his holding per year over the medium term. Mr Coombs, 58, is one of the wealthiest people in the City, his £1.57 billion fortune dwarfing better known figures such as Michael Spencer (£884 million), Lord Rothschild (£755 million) and Peter Cruddas (£661 million), according to Sunday Times Rich List estimates.
Oil is an ethical investment, says BP. Trillions of dollars of investment in new oilfields will be needed to meet demand, even if carbon emissions are curbed to hit the Paris climate agreement targets, BP (BP.) has claimed. Spencer Dale, the company’s chief economist, said that the debate over tackling climate change suffered from a lack of understanding about the “basic arithmetic” of oil supply and demand. “Sometimes I hear [people talk] as if the world can carry on without future investment in oil and gas. I just don’t know of any type of scenario where that’s true,” he said. Mr Dale, 52, said that buying BP shares should be considered as an ethical investment, since its continued investment in oil and gas was in line with meeting the Paris targets and would help to meet growing energy demand that would lift billions of people out of poverty.
Restaurant Group chief Andy McCue leaves the table after Wagamama deal. Restaurant Group (RTN) surprised investors yesterday by announcing the resignation of its chief executive less than two months after he pushed through the contentious acquisition of Wagamama, the Japanese noodle bar chain. The group, which also owns Frankie & Benny’s and Chiquito, 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. The company’s shares, which have fallen because of investor scepticism over the £559 million Wagamama deal, were sent down another 16¼p to 129¾p, valuing the group at £638 million. After completion of the deal, The Restaurant Group, which was founded in 1987, has more than 650 restaurants, including Brunning & Price, a gastropub chain, and Firejacks. The Wagamama business has almost 200 noodle bars, including six in America and 50 franchised outlets overseas.
Micro Focus reboots after turmoil. Micro Focus International (MCRO) has pledged to return more cash to shareholders after declaring that the turmoil from its takeover of Hewlett Packard Enterprises has begun to ease. The software developer raised the target for its share buyback programme by $110 million to $510 million after the decline in its underlying revenues began to moderate. Micro Focus, which specialises in prolonging the life of archaic computer languages such as Cobol, also reiterated that it would return the bulk of the proceeds from the sale of the Suse division to shareholders. It is expected to receive more than $2 billion from the deal. The boost to cash returns and better-than-expected results for the 18 months to the end of October sent shares in Micro Focus 186p higher to £17.03½. However, the stock is trading substantially below its high of nearly £27 in November 2017 when concerns over the $8.8 billion takeover of HPE first hit share prices.
Switch at the top of comparison site group. The former investment banker who chairs the company behind Moneysupermarket.com Group (MONY) is leaving after five years heading the board. Bruce Carnegie-Brown will be replaced as chairman by Robin Freestone, 60, who has been a non-executive director of the FTSE 250 company since 2015, at the company’s annual shareholder meeting in May. Mr Carnegie-Brown, 59, will have spent nine years on Moneysupermarket.com Group’s board , including the four years he acted as a non-executive before becoming chairman. Any longer and he would have surpassed the threshold for board tenure that is considered appropriate under Britain’s corporate governance code.
Convatec nurses wounds as costs spiral. A company specialising in wound-healing bandages has inflicted fresh pain on shareholders by unveiling a costly turnaround plan. Convatec Group (CTEC) has announced plans to invest $150 million over three years in a strategy that will hit profits. The plans were drawn up by Rick Anderson, 58, former chairman of Johnson & Johnson, the American pharmaceutical group, who was parachuted in last October as interim chief executive after Paul Moraviec, 60, stepped down in the wake of another profit warning. The company is close to appointing a new, permanent chief executive. Analysts at UBS said yesterday that while the extra spending had been expected, the magnitude of these costs was “significantly greater” than expected. “We believe the investment targets are rational”, the Swiss broker added.
Cuts help Indivior to boost profit despite falling sales. Sales at Indivior (INDV) fell last year after it began to face competition to its blockbuster addiction treatment. Indivior posted a 9% decline in net revenue to $1 billion in the year to the end of December, which it said was partly due to the loss of market share to Suboxone Film, its opioid addiction treatment. Indivior is a dominant operator in the market, particularly in America, which accounts for most of its revenues.
A warning of a sales slowdown at Puma, the sportswear brand known for its jumping cat logo, sent shivers across sports fashion retailers and JD Sports Fashion (JD.) yesterday. The trend for wearing sports clothing outside the gym, dubbed “athleisure”, has made sportswear sales surprisingly resilient compared with more traditional high street fashion brands. However, Puma warned that it expects sales growth of about 10% this year, despite reporting a 20% rise in fourth-quarter sales to €1.3 billion. It put the strong quarterly sales down to it reacting quickly to the trend for retro sneakers with thick soles and launching new styles. But investors were concerned by the conservative forecast in its sales growth, sending shares in the German group down €30.50 to €451. The warning had an impact on Sports Direct and JD Sports Fashion, which both sell Puma shoes and clothes. Sports Direct shares fell 5½p to 271¾p while those in JD Sports Fashion lost 10p to 448½p.
fell 150p to £62.60 when the gambling group commented after market close on Wednesday on €55 million of tax bills from Germany and Greece. The company said that it will challenge the bills and was confident in its grounds of appeal.
Friedrich Joussen, 55, chief executive of TUI AG Reg Shs (DI) (TUI), appeared to signal his confidence in the troubled travel company by spending almost €1 million on shares a week after it issued a profit warning. The shares have fallen by about 30% since the warning.
Motif Bio (MTFB), the London-listed antibiotics developer, lost three quarters of its market value after the US Food and Drug administration said it could not approve Iclaprim, the group’s skin infection treatment. The decision was a shock to investors because recent patient trials had shown the drug had a “favourable” safety profile. Peel Hunt analysts said: “With no clear route to approval of commercialisation and a requirement to raise additional capital, we expect this news to be met with a material rebasing of the share price.” The shares fell 29p to 10¾p.
MJ Gleeson (GLE) rose 27p to 779p on its half-year results. The company reported a 62.8% rise in pre-tax profit to £22.3 million on the back of a 52.8% rise in revenue to £118.3 million. As well as building homes on brownfield sites targeting low-income buyers, the company has a strategic land division, which helps landowners gain planning consents to increase the value of sites. It expects to see significant growth in the division on the back of a land identification mapping system it has developed to identify potential housing development sites that landowners are sitting on.
GB Group (GBG), the data intelligence firm, added 28p to 458p on continued optimism around its acquisition of Idology, a US identity verification vendor. While giving GB Group a stronger presence in America, it has also provided it with a “differentiated identity verification platform”, analysts at Peel Hunt said.
There was no love for Card Factory (CARD) on Valentine’s Day as shares fell almost 7%. The company was caught in a retail sell-off after sterling weakened and data from America showed that sales in December had fallen at the fastest pace in almost a decade. Card Factory was founded by Dean Hoyle, now 51, in 1997 and was sold 13 years later for £350 million to Charterhouse. The company, which listed in 2014, has faced challenges in the past few years, including weaker sterling, a higher national living wage and electricity wholesale prices.
Tempus – Wood Group (John) (WG.): Avoid for now. Strong business with prospects, but the shares look stuck in the doldrums
Tempus – Boku, Inc (DI) Reg S (BOKU): Buy. Intriguing idea that is oversold but could go places
