Intu Properties (INTU) wants to launch a huge rights issue either alongside its full-year results at the end of February, or shortly afterwards. In a trading statement in November, Intu said fixing its balance sheet, which is loaded with £4.7bn of debt, was its “No 1 priority” and flagged that an equity raising was “likely”. The move will test whether investors believe the full extent of the retail property crisis is now “priced in” to the stock market valuations of big landlords. Intu, which rejected a takeover bid worth 425p a share, or £3bn, in 2010, has seen its share price tumble to 22.9p, valuing it at £311.6m — a fraction of the £8bn at which its properties are officially valued.
Lenders to Premier Oil (PMO) have reported its biggest creditor to the City watchdog. A group of creditors have urged the Financial Conduct Authority (FCA) to investigate the Hong Kong hedge fund Asia Research & Capital Management (ARCM) over claims that it broke rules by failing to disclose it had built a £132m bet against the share price while blocking attempts by the FTSE 250 explorer to restructure its £2bn of debts. ARCM disclosed that it had secretly built a 17% short position on Premier Oil shares on December 4. A source said it was a “massive conflict of interest” for ARCM to hold debt as well as bet against the shares. The position is thought to be the biggest on the London market as a percentage. A source close to ARCM said the hedge fund had reported itself to the FCA last month after being made aware of the rules on disclosing short positions. ARCM started shorting Premier Oil’s shares three years ago.
KPMG is facing legal action over its auditing of Goals Soccer Centres (GOAL), months after the chain collapsed following an accounting fraud going back almost a decade. Deloitte, which acted as administrator to Goals, is understood to be chasing KPMG over an alleged misdeclaration of the company’s VAT liabilities for several years. It is also pursuing the former finance chief, Bill Gow, who set up Goals with chief executive Keith Rogers in 2000. Sources said HM Revenue & Customs was also preparing to prosecute the directors over a £16.3m tax bill.
Legal & General Group (LGEN) is embroiled in a row over a property development amid claims that a council will underwrite it and is avoiding scrutiny. Discontent about the Temple Island scheme in Bristol is growing as a decision looms on whether to let the insurer develop the site. Opposition councillors have accused Marvin Rees, the Labour mayor, of withholding documents that spell out the deal’s terms. It threatens to become an embarrassment for L&G chief executive Nigel Wilson, who has embarked on a series of developments in cities such as Cardiff and Newcastle. As well as 400 homes, the Temple Island plans include a 345-room hotel and offices. Anthony Negus, a Liberal Democrat councillor, said the terms of the deal meant that Bristol taxpayers would, in effect, be “underwriting” the scheme for 40 years if tenants cannot be found.
A pay row looks set to erupt at Virgin Money Holdings (UK) (VM.) over bonuses paid to executive directors, despite the lender reporting a loss and dropping its dividend. Institutional Shareholder Services (ISS), a proxy group, has urged investors to vote against the remuneration report at its annual meeting on January 29. David Duffy, 59, chief executive, could pocket as much as £5.1m this year — exceeding the pay taken by John Flint, the former boss of the much bigger HSBC, who took home £4.6m in 2018. Duffy’s package includes £1.2m for salary, cash benefits and pension. He could earn £3.9m in bonuses if he hits targets including boosting the Virgin Money share price by 50% over the year. ISS said it viewed the “overall quantum of pay for the year excessive”. Another proxy agency, Glass Lewis, recommended supporting the report.
Carphone Warehouse risks sliding into irrelevance. Exorbitant prices and a lack of product innovation mean that consumers are hanging on to their mobiles for longer, leaving Carphone short of the minimum sales targets set in its contracts with networks and plunging the division to an expected loss of £90m this year. It is a headache for Alex Baldock, the cerebral boss of Dixons Carphone (DC.). Analysts at Goldman Sachs expect a Christmas trading update this week to show a 1% drop in like-for-like sales for its electricals division, which includes Dixons, Currys and PC World. Baldock is likely to accelerate store closures at Carphone Warehouse, where leases on average have two years to run. “Alex has to re-engineer that business quickly,” an industry source said. “He needs to reduce their number of stores to about 150. If he can do that in the time available to him, then he will have a business.”
HSBC Holdings (HSBA) is preparing another round of branch closures, as the bank draws up broader plans to make sweeping cost cuts next month. HSBC is aiming to shut more than 10 high-street locations this year in an attempt to slash its bloated cost base and boost profits. The move will shrink its 621-strong network, which suffered five closures last year. The first closure is expected in the next few weeks, ahead of the annual results in mid-February, according to a source. HSBC declined to comment. Although shutting branches will help HSBC shave some costs, caretaker boss Noel Quinn, 57, tipped to be named chief executive next month, is expected to take the knife to other parts of the bank, including its investment banking division.
A year ago, Greggs (GRG) launched its vegan sausage roll and jumped on the craze for plant-based food. It was a bold move for a company known to many for its old-fashioned sausage rolls, but it appears to have paid off. Ned Hammond, an analyst at Berenberg, said the launch produced a “massive brand-awareness spike”. Last week it moved into home delivery by announcing a tie-up with Just Eat — the latest effort by chief executive Roger Whiteside to transform what was once a staid bakery business. Nigel Parson, leisure analyst at Canaccord Genuity, said: “This is driven by Whiteside after they took the view that if you are going on a weekly bread shop you’re probably going to buy it at a supermarket. That was historically their custom. That led to a transformation.” Hammond said expanding into coffee — Greggs is now No 3 in the market — and moving into breakfasts, where it is second only to McDonald’s, plus a healthier range of products, also helped. “The big question is can Greggs sustain this positive performance,” said Parson. A vegan steak bake and doughnut have already been launched this year and it is trialling late opening in a number of locations. This signals potential for further momentum. Sales of those vegan products and some of its newer items are still only a small proportion of total sales, which rose 13.5% last year. “If you look at what’s really caused the big jump in sales it’s actually been — albeit some from the vegan versions — a lot of old-school bakery products,” said Hammond. The shares were within a whisker of their record high on Friday, closing at £24.24, valuing the chain at £2.5bn. Hold.
Flybe Group (FLYB) faces a backlash over its decision to switch its taxpayer-funded domestic flights between London and Cornwall away from Heathrow, in a move that rivals fear could benefit Virgin Atlantic, one of its principal investors. The airline has moved its four-times-a-day Newquay-to-Heathrow route to Gatwick from March 29, freeing up valuable slots at Heathrow, one of the world’s busiest airports. Michael O’Leary, chief executive of Ryanair Holdings (RYA), a rival, yesterday raised concerns about the arrangement, which he warned could boost Virgin’s core transatlantic business at Heathrow and also could reduce “connectivity”. Mr O’Leary, 58, said that the slots were much more lucrative and were worth about £60 million. He demanded to know whether they could benefit Virgin and questioned whether Flybe needed government support. International Consolidated Airlines Group SA (CDI) (IAG), the owner of British Airways, said the “government must ensure that agreements between Flybe and its shareholders’ airlines are on normal commercial grounds that protect Flybe’s interests”.
GVC Holdings (GVC), the gambling group behind the Ladbrokes and Coral brands, said yesterday that it expected to report full-year earnings towards the top end of its upgraded guidance after strong online growth. GVC Holdings, which raised its underlying earnings guidance in October to between £670 million and £680 million, said that its online net gaming revenues had grown by 11% in the fourth quarter, while it was making “good progress” in America. Although its British betting shops are being cut back after a government crackdown on lucrative fixed-odds betting terminals, the fall in revenues of 11 per cent was ahead of initial guidance, partly helped by William Hill’s rapid exit from all 700 of the shops it had earmarked for closure.
NMC Health (NMC) has appointed a former FBI director to investigate claims of financial irregularities levelled against it by an American short-seller. NMC Health said that Louis Freeh, 70, and Freeh Group International Solutions, his company, would examine the allegations by Muddy Waters. Muddy Waters has built a reputation for researching allegedly overvalued companies and then publishing hard-hitting reports to drive down the share price and turn a profit.
Higher motor claims costs have been blamed for a profit warning by that shocked the insurance market yesterday. Earnings are set to be 42% lower and the dividend will be cut, the insurer said, adding that trading this month had been “in line with expectations”. Hastings said that claims expenses had risen in the fourth quarter because of increases in repairs and third-party credit hire, winter claims that were slightly higher than expected and a small number of larger-range bodily injury losses.
