The £4 billion takeover of Cobham (COB) by an American private equity group is back on track after the business secretary said she is minded to clear the deal. Shares in the British defence company rose after the announcement by the business department. However, the shares still trade at a small discount to the 165p offer price, reflecting the view that the deal might yet be derailed. The deal had been put on hold while the government investigated whether the sale of the air-to-air refuelling equipment maker posed a threat to national security.
Gloucester city council has bought a local retail park for £54 million, almost four times its net annual budget. It acquired St Oswalds from Hammerson (HMSO), the shopping centre owner that is seeking to sell all its out-of-town properties. Tenants at the site include B&Q, Homesense and Mothercare, which went into administration this month. A spokeswoman for the council said that it could not yet comment on the acquisition because of a non-disclosure agreement. Councils have spent hundreds of millions of pounds on commercial property in recent years as they try to create a rental income stream to plug funding cuts from central government. Some have sought to buy neglected shopping centres in their areas as part of regeneration plans.
Plans to relaunch easyJet (EZJ) package holiday business were confirmed yesterday as it reported pre-tax profits down by more than a quarter after what had been “a difficult year”. However, the budget airline said that it had finished the period with a strong performance, including a record summer, enabling it to hit its full-year results expectations. Although headline pre-tax profits were £427 million, down 26% on last year, this was at the top of the £420 million to £430 million range it had estimated in October. Revenue in the year to the end of September increased by 8.3% to £6.3 billion, helped by a near-9% rise in passenger numbers to a record 96.1 million.
A strong first half in which it won more than £4 billion of investment mandates has prompted Intermediate Capital Group (ICP) to lift its key margin target. Assets under management were up by 11% to €41.1 billion after the group raised €4.6 billion from institutional investors buying into 14 funds. Intermediate Capital, which once specialised in mezzanine finance, has diversified into a wide range of asset categories, from private equity to property. Clients include sovereign wealth funds, insurers and pension funds. It manages about €2.7 billion of its own assets as principal, as well as €38.4 billion of third-party assets.
A second profit warning in just over four months darkened the mood around an industrial lighting company yesterday, sending its shares to a nine-year low. Dialight (DIA) said that it now expected its 2019 earnings before interest and taxes to be between £5 million and £8 million, after adjusting for about £6 million of additional costs. The lighting manufacturer reported earnings before interest and taxes of £8 million last year and in July had said that it expected to report underlying operating profit of between £10 million and £13 million. “We have seen early signs of recovery, but this has been hampered by the slowdown in the global markets,” Dialight said in a trading statement yesterday.
Polypipe Group (PLP), one of Britain’s biggest building materials suppliers has issued a profit warning, blaming a Brexit-driven slowdown in construction and the impact of flooding in the north and the Midlands. Polypipe said that it expected underlying operating profit for the year to be “just below” analysts’ expectations of between £72 million and £75 million. In a trading update for the ten months to the end of October, it said that group revenue was £381.7 million, up 4.3% on the previous year. However, trading over the past four months was only 1.7% higher because of difficult market conditions.
One of Britain’s leading online retailers is reining back its ambitions to expand overseas by closing its Netherlands operation after only four years. AO World (AO.), the online electricals retailer, will take a €3 million hit from shutting its Dutch base, which loses €6 million annually, after failing to turn it around. John Roberts, chief executive, said that he had “real conviction” that AO could improve its German operations, but gave himself a deadline of next summer. If he was wrong, he said, the German division also would be closed, at a cost of £20 million.
A customer corporate account held at HSBC Holdings (HSBA) that helped to fund protest-related activities in Hong Kong is being shut down. The bank moved to close the account after discovering that it was being used contrary to its initial documentation, according to reports. HSBC is among several leading companies grappling with the issue of conducting business in Hong Kong after five months of anti-government demonstrations and amid rising tensions between Beijing and the former British colony. The client, whose identity is not known, was informed by HSBC last month that it would close the account after a 30-day notice period which ends this week, according to the Hong Kong Economic Journal.
Legal & General Group (LGEN) has pulled in another £23 billion of investment mandates since June, but sales of equity release mortgages have faltered. The insurer and asset manager gave a brief snapshot of second-half trading yesterday as it prepared to tap bond investors for an unspecified amount to take advantage of favourable market conditions. Nigel Wilson, 63, chief executive, said: “Our business continues to go from strength to strength. Our year-to-date operating performance across all five of our divisions is good, reflecting the strong execution of our stated strategy.” L&G is planning to take advantage of rock-bottom gilt yields, which reduce its debt costs, with the launch “shortly” of a sterling-denominated subordinated debt issue.
Homeserve (HSV), the company behind Checkatrade has doubled down on its bet to create a worldwide platform matching local tradespeople with householders by making a $140 million acquisition in the United States. Homeserve said that it was acquiring 79% of the Philadelphia-based Elocal as part of its strategy to expand and extend its “local experts” division. Shares in the group, whose main business is providing emergency home insurance cover, rose after news of the deal emerged and following the publication of its interim results.
