The main trade union at Royal Mail (RMG) has served notice for a strike ballot among 110,000 workers. The Communication Workers Union is in dispute with the postal delivery company over issues including threats to the universal service obligation, which means that post is delivered at uniform prices across Britain six days a week, and claims that the “four pillars agreement” reached between the union and Royal Mail last year has been breached. The agreement includes pay rises, new pension proposals and a pledge to reduce weekly working hours from 39 to 35 by 2022, dependent on productivity improvements. Royal Mail workers last took part in national strikes ten years ago, when it was state-owned. The company employs 143,000 people in Britain.
The government has intervened in the £4 billion takeover of Cobham (COB) by ordering an investigation into the implications for national security. Andrea Leadsom said yesterday that the Competition and Markets Authority would carry out a review of the takeover of the aerospace and defence group by Advent, the American private equity firm, and would report back by October 29. “The government’s goals are to support private sector innovation while safeguarding the public interest,” the business secretary said. It marks a fresh twist in what has become a controversial takeover attempt. Cobham, which is led by David Lockwood, 57, its chief executive, is one of Britain’s biggest defence and aerospace businesses, employing about 10,000 staff globally, including almost 1,800 in the UK.
The sell-off in Sirius Minerals (SXX) shares continued yesterday as investors reeled from its admission that the funding plan for its $5 billion fertiliser mine had failed. Analysts at Liberum, one of the company’s house brokers, cut their price target to 9p from 40p amid uncertainty over alternative funding models and their potential impact on investors. Sirius has been seeking to raise $3.8 billion to fund the development of its Woodsmith mine beneath the North York Moors National Park near Whitby. It wants to extract polyhalite, a type of potash fertiliser. On Tuesday it abandoned a $500 million junk bond issue that was a crucial part in its plan, blaming market conditions and Brexit.
Metro Bank (MTRO) has warned it could face a “significant” bill after regulators widened their investigations into a £900 million accounting scandal. A bond prospectus from the bank has revealed that risks associated with possible action from the Financial Conduct Authority and Prudential Regulation Authority may lead to “criminal and/or civil liability for the bank” or suspension of its regulatory permissions. It warned that “making redress and the cost of any regulatory sanctions may involve significant expense” and that the FCA’s investigation had been broadened to include “certain senior members of management”.
The new chief executive of Kingfisher (KGF) will be given the freedom to consider a possible break-up of the DIY group after its chairman promised that he would not be “handcuffed” on strategy. Andy Cosslett said that although he believed Kingfisher had “the right building blocks” in place, Thierry Garnier, 53, the Carrefour veteran who takes over from Véronique Laury as chief executive next week, could form his own view. Mr Cosslett, 64, was speaking after the release of first-half results showing that wary British consumers and a poor performance in France had hit sales and profits at the B&Q and Screwfix owner.
Andrew Tinkler, the controversial architect of the Eddie Stobart brand, could return to running the company. Eddie Stobart Logistics (ESL) has confirmed that it has had a “highly preliminary expression of interest” from Mr Tinkler, 56, to buy the business. It is the second offer for the trucking company this month and since its shares were suspended during an unfolding accounting scandal and the departure of its chief executive. If Mr Tinkler is serious, it will pitch him against DBay, the private equity firm formerly known as Laxey Partners, to which he sold 51 per cent of Eddie Stobart Logistics for £195 million in 2014, money that Mr Tinkler used to expand Stobart Group, the parent company of which he was chief executive and which he left last year after a high-profile multimillion-pound High Court battle.
A panel of bankers will rule today whether some investors in Thomas Cook’s credit are due a payout, which could ease a rescue of the travel company. Thomas Cook Group (TCG) filed for bankruptcy in the United States on Tuesday, which protects it from legal action by American creditors during restructuring. Its debts have left it vulnerable to the weather and to political and economic turmoil, forcing it to accept a rescue deal led by Fosun Tourism Group, of China, last month. If the panel decides that a bankruptcy credit event has occurred, it is likely to remove the risk of a rejection of its restructuring plan next week. However, if the creditors reject the plan, Thomas Cook would be left scrambling to secure its future by early next month, when cash reserves are low because of the off-peak travel season.
International Consolidated Airlines Group SA (CDI) (IAG) flew yesterday after British Airways’ pilots called off next week’s planned strike action, potentially saving its parent company tens of millions of pounds. Members of the British Airline Pilots’ Association walked out for two days last week in a row over pay, forcing BA to cancel almost all of its flights. Some had pegged the cost to the carrier at as much as £40 million a day. However, the union, which is organising the strikes, has cancelled another day of industrial action planned for next Friday, saying that last week’s walkouts had demonstrated the “anger and resolve” of the pilots and that it was now time for “a period of reflection before the dispute escalates further and irreparable damage is done to the brand”.
Burberry Group (BRBY) slipped 55p to £21.20 after analysts at UBS took a fresh look at the expensive trench coat maker. In a trading update in July, Burberry reported a 4% rise in first-quarter, like-for-like sales, which sent the shares soaring amid expectations that it might be the next turnaround story in the luxury goods sector. However, having analysed thousands of social media posts and Google searches, UBS reckons that its brand momentum is “stable” rather than accelerating and that prices haven’t increased, either. “It may be too early to expect Burberry to deliver high-single-digit growth already next year, especially in an increasingly uncertain economic environment,” the analysts, who are “neutral” on the stock, said.
Cenkos Securities (CNKS) reshuffled its board with one of its founders and another director stepping aside. The City broker has come under fire from Crystal Amber, an activist investor that has been critical of the present management. The board changes came as the broker swung to a £200,000 loss in the first half amid a dearth of initial public offerings on Aim at the beginning of the year. Its bosses said that the second half had started better, but warned that the “weak” opening six months could lead to a drop in full-year revenues.
The boss of Dechra Pharmaceuticals (DPH) has taken advantage of the veterinary product maker’s booming share price to cash in almost £6 million of his stock. Ian Page, 58, who has been chief executive since 2001, sold 200,000 shares at about £29.17, while Tony Rice, 67, the chairman, offloaded 20,000 shares. The FTSE 250 company said that they had cut their holdings to “satisfy long-term personal financial planning considerations and [to] widen their investment portfolios”.
Tempus – Pendragon (PDG): Avoid. This is a company stuck in a bad place and which has managed to reverse itself into a wall
Tempus – Springfield Properties (SPR): Buy. Focused, knows its market well and unfazed by whatever Brexit may bring
