The chief executive of Patisserie Holdings (CAKE) has resigned from the Mayor of London’s business advisory board and as a non-executive director of the Restaurant Group (RTN) amid the fallout from last week’s accounting scandal. Paul May, whose tenure at the operator of Patisserie Valerie has also been called into question, was part of the original 16-strong advisory board formed two years ago by Sadiq Khan on the back of his pledge to be the “most pro-business mayor ever” in an attempt to help London’s economy develop. He sat alongside business luminaries including Nicola Mendelsohn, European vice president of Facebook; Dame Inga Beale, former chief executive of Lloyd’s of London; Lloyd Dorfman, founder of Travelex and chairman of Doddle; and Nikhil Rathi, chief executive and director of international development of the London Stock Exchange.
Convatec boss quits after surprise profit warning. The chief executive of Convatec Group (CTEC) resigned yesterday alongside the latest profit warning from the medical equipment company. Paul Moraviec stepped down with immediate effect and has been replaced by Rick Anderson, a non-executive director and a former chairman of Johnson & Johnson, as interim chief. The change comes after a series of disappointing updates from Convatec since it was floated by Nordic Capital and Avista Capital Partners, the private equity firms, in London’s biggest IPO of 2016. It shares fell 33% yesterday to a fresh low of 150p, well below its float price of 225p.
Fashion chain hung out to dry by long, hot summer. Just months after its co-founder cashed in tens of millions of pounds through share sales Superdry (SDRY) has issued a profit warning, blaming the weather, foreign exchange pressures and falling consumer confidence. Julian Dunkerton raised £18 million in January and £71 million in July, selling down his stake to 18.5%. He left the business in March to focus on his family business interests including Dunkertons Cider and Lucky Onion, a luxury hotel group in the Cotswolds. Shares in the company, known for its jackets emblazoned with Japanese slogans, tumbled by a fifth yesterday as the stock market learnt that sluggish sales would take about £10 million off annual profits. It said that trading had been hit by “unseasonably hot weather”, which was made worse by poor consumer confidence in its markets. Inadequate foreign exchange hedging will add £8 million to costs, the group said.
Battled investors sold out of Babcock International Group (BAB) after bear analysts at Boatman Capital Research published an “investigative” dossier on the outsourcer at the weekend, claiming that it “systematically misled investors by burying bad news”. The research firm, which does not disclose the identity of its directors, said that Babcock, which provides specialist support for Britain’s defence industry and other governments, needed to “bring in new leadership capable of rebuilding the business”. Its analysts conceded that Babcock’s problems were not comparable to Carillion but claimed that the company “faces potentially massive exceptional costs, revenue pressure and declining margins in its core business”. Babcock declined to comment on the report yesterday, but Liberum Capital issued a defence case for the FTSE 250 group, taking each of Boatman Capital’s accusations in turn.
Randgold Resources Ltd. (RRS) was the biggest riser on the premier index, tracking gold prices higher as cautious investors flocked to the “safe haven” asset. The gold miner closed up 298p at £60.82. JP Morgan analysts said that “growth outlook” should be the focus for equities in the current market, with mining, insurance and capital goods sectors given an “overweight” recommendation. The analyst advised caution on the property sector, which could be hit by rising yields, and consumer staples, which they say will underperform if yields go up.
Nex Group (NXG), the UK trading and technology company rose 40p, or 4%, to £10.45 on the news that CME Group’s planned £3.9 billion purchase of Nex passed regulatory hurdles in the US and Europe.
Shoe Zone (SHOE) rose 19p, or 11.6%, to 183½p after reporting that pre-tax profits for the year were expected to be ahead of expectations at more than £11 million.
Paddy Power’s US bet pays off. The odds were back in favour for after sports betting activity in New Jersey, a key new market for the Irish bookmaker, nearly doubled in September. Figures from New Jersey’s division of gaming enforcement, published after the market closed on Friday, showed sports betting activity rose from $95.6 million to $183.9 million between August and September after the launch of four new sports betting sites and the start of the NFL football season.
Tempus – Greencore Group (GNC): Sell. After quitting the US, Greencore is overly exposed to an uncertain UK economy
Tempus – Schroders (SDR): Avoid. Wait until talks with Lloyds conclude
