Domino’s Pizza Group (DOM) yesterday named its Australian counterpart as a potential buyer of its international business after announcing plans to sell the loss-making operations. David Wild, chief executive, confirmed that it would contact Domino’s Pizza Enterprises, which holds the Domino’s master franchise rights in Australia and New Zealand along with Belgium, France, the Netherlands, Japan, Germany, Luxembourg and Denmark. Asked whether its Australian listed sister company might buy the British group’s operations in Switzerland, Iceland, Norway and Sweden, Mr Wild, 64, said: “Clearly they’re somebody we’ll be making phone calls to, but we need more than one option.”
WH Smith (SMWH) has stepped up its overseas expansion with a $400 million takeover of Marshall Retail Group in the United States. The buyout will broadly double the size of the stationery retailer’s international travel business and follows its $198 million takeover of the US business Inmotion last October. Marshalls has 170 shops in North America, 59 of them inside airports, making $84 million in sales last year. Stephen Clarke said that his successor Carl Cowling, 46, was the architect of the deal. “It’s got his hard work and fingerprints all over it,” Mr Clarke, 51, said. “But if I were still here we would still be doing the deal because it is a fantastic acquisition and fits the strategy entirely.” Nick Bubb, a retail analyst, said the acquisition meant that Mr Clarke was “going out with a bang”.
Lacklustre ice cream sales and a slowdown in China and India stalled quarterly sales growth for Unilever (ULVR), causing the Anglo-Dutch consumer giant to narrowly miss market expectations. The muted sales growth has highlighted the challenge facing Alan Jope to keep up sales growth in emerging markets. Mr Jope, who took over from Paul Polman in January, had promised to accelerate sales in emerging markets and said that the company would deliver growth in “the lower half” of a 3% to 5% range this year. However, Unilever recorded 2.9% underlying sales growth in the third quarter. The company is sticking to its guidance for the full year, however, and highlighted that sales had risen by 3.4% over a longer nine-month period.
A former Barclays (BARC) senior executive would have risked a £50 million “good leaver” package if he had sought a criminal deal with Qatar during the credit crisis, a court was told yesterday. John Kelsey-Fry, QC, a lawyer for Roger Jenkins, told a jury at the Old Bailey in London that it would have been “lunacy” for his client to risk such accrued benefits and a job that had paid him £38 million in 2007 alone. Mr Jenkins is one of three former Barclays executives charged with substantive fraud and conspiracy to commit fraud by false representation over undisclosed payments to Qatar during emergency fundraisings at the height of the financial crisis in 2008. Barclays raised £11.2 billion from Qatar and other investors to avert a state bailout.
A slowdown in consumer spending on home improvement has prompted a profit warning from Grafton Group Units (GFTU), one of Britain’s biggest suppliers of building materials. Grafton said that annual profit would miss expectations in an unscheduled update that sent its shares closing more than 10% down. It said that third-quarter sales in the UK had been affected by “weak underlying demand fundamentals as households deferred discretionary spending on home improvement projects against the backdrop of increased economic uncertainty”. Consumer sentiment was weaker in Ireland, despite a more buoyant economy, causing a fall in demand in its merchanting and DIY markets.
One of South Africa’s biggest listed property companies has agreed to acquire a majority stake in Capital & Regional (CAL) in a rescue share deal. Growthpoint Properties will invest about £150 million for a 51% interest in Capital & Regional by buying shares at a discount to the property group’s net asset value. The offer includes an agreement to buy 30.3% of the issued share capital for £72.4 million, or 33p per share. Growthpoint will also acquire 311.5 million new shares at 25p per share to raise £77.9 million.
Rentokil Initial (RTO) boosted revenue by nearly 10% in the third quarter with its highest level of organic growth in ten years and a round of acquisitions. Revenue at the pest control and washroom supplies business increased by 9.8% to £723 million in the June to September period. The group noted the good growth in the UK in its pest control and hygiene businesses. Pest control services also performed well in the North American and Latin American markets with hygiene improving in Europe and the Pacific. The group said it was on track to meet full-year expectations and its M&A pipeline remained strong for the year.
Shares in Moneysupermarket.com Group (MONY) tumbled yesterday after the price comparison website posted a fall in revenues in its money business. The company said in an update that revenues from comparing loans, credit cards and mortgages fell 5% year-on-year to £20.6 million in the three months to the end of September. Moneysupermarket.com warned it faces “continuing challenges in product availability” in money and that the performance of the division will weaken in the rest of the year. Analysts at Peel Hunt blamed the slowdown in money on “limited” appetite among financial services firms for new customers.
Nearly a quarter of shareholders in Britain have voted to support a resolution calling on the Anglo-Australian mining group to suspend its membership of pro-fossil fuel lobbying groups. A total of 22.2% of BHP’s London-listed investors voted for a proposal initiated by investors including the Church of England Pensions Board, Standard Life Aberdeen and Aviva. Shareholders in Australia have yet to vote. It is a member of the Minerals Council of Australia, the main lobby group for the coal industry. Ken MacKenzie, chairman of BHP, had said that the miner could use its influence on pro-fossil fuel lobby groups by being a part of them. “If we’re going to successfully develop solutions we need to collaborate within our industry,” he said.
Prudential (PRU) found its way to the top of the market due to a bullish research note from analysts at Bank of America Merrill Lynch who argued the case for a re-rating ahead of the upcoming demerger of the UK business. Last spring, the Pru confirmed plans to separate its £7 billion UK and Europe-focused arm, which will be called M&G PLC, from the group’s operations in the US and Asia. Once their ways have parted, Bank of America thinks the Prudential share price will start life at about £12, which, according to their calculations, means the US business would be valued at next to nothing. More importantly, it would mean that the company would be valued at a similar ratio — close to eight times price-to-earnings — as the enlarged group at present. That’s despite the new bias towards the Asian business, which will account for 80% of the new Pru and, as the analysts note, is the “jewel in the crown”.
EVR Holdings (EVRH) unveiled a new tie-up with the phone giant, O2. As part of its 5G UK launch, O2’s customers will get a 12-month subscription to EVR’s MelodyVR platform, which lets users watch gigs and artists in virtual reality. For each O2 customer that takes advantage of the promotion, MelodyVR will receive an undisclosed fee, while O2 will also promote the app in six of its flagship stores.
Shares in Alpha Fx Group (AFX) have more than quadrupled since the foreign exchange and payments group floated in London in the spring of 2017. The stock was up again yesterday, 60p higher to 910p, as bosses lifted their full-year guidance for the second time in three months. “Growth continues to be derived from the core UK corporate market, European clients serviced from the London office, as well as the institutional division and the broadening of the product base into currency options,” Alpha said. “As a result of the strong performance, the board expects earnings for the year ending 31 December 2019 to be ahead of market expectations.” One of the big drivers of the company’s outperformance is that it helps companies to hedge their exposure to currencies. That has proved useful since the EU referendum, which kicked off a period of volatility for sterling that firms would wish to avoid as it can have undue influence on performance.
Tempus – Flutter Entertainment (FLTR): Hold. Fairly valued gaming growth stock with plenty of opportunities but also some regulatory pressure
Tempus – Ashmore Group (ASHM): Buy. High quality investment manager that generates good value over time
