Some of the world’s biggest consumer companies have revealed the cost of doing business in Hong Kong, which is beset by anti-government protests, after Burberry Group (BRBY) led a series of warnings. The fashion retailer said yesterday that it had taken a £14 million writedown on the value of its shops in the territory and that it was negotiating with landlords about rent reductions over fears that the escalating levels of unrest will not end soon. Cathay Pacific, the Hong Kong-based airline, said that the protests had “severely impacted demand and operations”, with a 35% drop year-on-year in the number of passengers arriving in Hong Kong last month.
Losses at FirstGroup (FGP) have widened after it booked a £124 million charge on the struggling American coach service that it is seeking to offload. The transport group blamed a lower level of immigration in southern US states and increased competition for the hit to Greyhound, but said that plans to sell the business remained on course as part of a wider shake-up. Matthew Gregory, chief executive of First, said that the auction and talks with a number of prospective bidders were “well advanced”. However, apparent investor unease about the progress of the shake-up sent its shares down by as much 22%.
G4S (GFS) is being boycotted by one of the world’s biggest and most influential investment funds after being accused of serious and systematic human rights violations. Norway’s $1.1 trillion sovereign wealth fund said yesterday that it could no longer hold shares in G4S on ethical grounds because of its treatment of migrant workers in Qatar and the United Arab Emirates. In late 2018, it held a 2.3% stake in G4S valued at $90 million, according to its own figures, while as recently as last month it still owned a 0.34% holding. The fund’s ethics council said it was concerned about the so-called “recruitment fees” that migrant workers were required to pay to join the company.
National Grid (NG.) boss has insisted that he will be able to address the concerns of the governor of New York over gas supplies and that his company met regulatory standards in Britain during the blackouts in August. John Pettigrew, 51, acknowledged that both issues had led to disruption for customers but said that the company had been operating appropriately. Andrew Cuomo, New York’s governor, warned the energy supplier in a letter this week that it could be stripped of its licence in New York City and Long Island after it failed to provide “adequate and reliable service”. The reprimand comes after months of difficulty for National Grid in its attempts to update its gas supply systems on America’s east coast.
The boss of Purecircle Limited (DI) (PURE) has stepped down temporarily after an investigation of the book-keeping found signs of possible wrongdoing. Pure Circle, which produces stevia, a natural sugar substitute, said yesterday that Magomet Malsagov, its chief executive, had “voluntarily agreed to stand aside on a temporary basis” after an examination of the company’s accounts identified “potential impropriety”. He will remain involved in the company as an adviser to John Slosar, the chairman, who has taken the role of chief executive on an interim basis. The disclosures mark a deepening of a crisis that began almost two months ago.
The private equity group 3i Group (III) has rejected suggestions it might have too many eggs in one basket after lifting its stake in Action, the fast-growing continental discount chain, to almost 50%. The listed group is spending more than €600 million (£515 million) to raise its stake in Action from 45% as part of a deal to give third-party investors in the retailer the choice of an exit or the chance to reinvest. 3i declined to put a precise value on its holding after the deal, which will complete in early January, but its stake was worth £3.2 billion in September, suggesting the enlarged holding could be worth £4 billion or more.
Eddie Stobart Logistics (ESL) announced last night that it has entered into a conditional sale and purchase agreement with Dbay Advisors, an Isle of Man-based private equity group. Under the deal Dbay, formerly Laxey Partners, will inject £55 million of new financing into Eddie Stobart. Dbay is Eddie Stobart’s second biggest shareholder, with about 10 per cent. It owned 51% of the group before it was listed on Aim in 2017 at 160p a share, which valued the company at £572 million. Eddie Stobart had been taken private in 2014 when it was spun out of Stobart Group.
Strong performances at its South African and Middle Eastern businesses and a regulatory change at its Swiss business helped Mediclinic International (MDC), the private healthcare group, to increase profits. The company, which is also listed in Johannesburg, said revenues rose 9 per cent year-on-year in the six months to the end of September while earnings before interest, tax, depreciation and amortisation (ebitda) rose 4% to £222 million. On a statutory basis, Mediclinic reported pre-tax profits of £111 million, compared with a loss of £150 million last year after a writedown in the value of its investment in UK hospital group Spire Healthcare.
The newly appointed boss of BHP Group PLC (BHP), the world’s biggest miner, has been described as “a really straight up-and-down guy,” who will bring “great diligence” to the role when he takes over in the new year. Canadian-born Mike Henry, who has 30 years’ experience in mining, including 16 at BHP and the past three at the head of its Australian business, was named as successor to Andrew Mackenzie, 62, on Wednesday night. He will earn a base salary of $1.7 million and receive a pension contribution of 10% of his basic wage. Mr Henry, 53, is responsible for the mining group’s vast iron ore, coal, copper and nickel assets in the country, leading almost 40,000 people.
