Davos 2019: Hasty Brexit is in nobody’s interest, warns ex‑Bundesbank chief. A disorderly Brexit would “set Europe back for years to come”, Germany’s former central bank boss has warned as he called on both sides to make compromises to deliver a deal that is acceptable to everyone. Axel Weber, the former Bundesbank president who is now chairman of UBS, the global Swiss bank, said that it was in the interest of both Britain and the European Union to strike a deal and remove the tail risk of no deal. If time is running out, Article 50 should be extended to continue negotiations, he added. He was speaking after the International Monetary Fund’s latest growth forecasts revealed that eurozone growth was slowing sharply and amid signs of rising populism across the continent. France has been hit by broad protests at President Macron’s economic reforms and the German chancellor Angela Merkel was forced to step down as leader of her party amid a backlash over her decision to open the borders to refugees.
Kier Group (KIE) chief hangs up his boots after disastrous rights issue. The chief executive of Kier has left the construction group following a failed deeply discounted rights issue last month. Haydn Mursell, 48, will be replaced temporarily by Philip Cox, who will become executive chairman until a new chief executive is appointed. Mr Cox said: “The board believes that, following the completion of the recent rights issue, now is the right time for a new leader to take Kier forward to the next stage of its development.” Kier, a housebuilder and construction company involved in projects such as Crossrail, launched the £264 million rights issue on November 30 to reduce debt and bolster its balance sheet after the banking sector reduced its exposure to the construction sector in the wake of the collapse of Carillion.
Dixons keeps its eye on big picture as Carphone sales lag. Strong demand for televisions and gaming improved sales at Dixons Carphone (DC.) over Christmas but its mobile business continues to lag. The electronics retailer said that its like-for-like group revenue rose by 1%, which included a 2% comparable sales rise in its UK and Ireland electricals business in the ten weeks to January 5. The chain said that its peak trading was in line with expectations even as like-for-like sales in its struggling mobile phones arm fell by 7%. Alex Baldock, chief executive of Dixons Carphone, maintained its profit guidance, with the group expecting to make a full-year pre-tax profit of £300 million. He said that he was pleased that the group had managed to report record sales despite a challenging marketplace.
easyJet (EZJ) was lifted more than 7% on an upbeat trading statement, despite revealing a £15 million hit from the drone disruption at Gatwick airport. The budget airline said that its expectations for full-year profits were unchanged, citing its second half bookings which continue to be ahead of last year. Total revenue per seat fell by 4.2% at constant currency, as predicted, although this was partly due to one-off benefits last year not being repeated, including winter schedule cancellations at Ryanair.
Britain’s steady growth to beat Europe’s big players. Sharp slowdown in eurozone to drag on world economy, IMF warns. Britain will grow at least as fast as its biggest eurozone neighbours over the next two years as a sharp economic slowdown in the single currency bloc drags on global growth, the International Monetary Fund has said. Downgrades for Germany and Italy were to blame for the IMF’s decision to reduce its world growth forecast for this year to 3.5%, below its October projection of 3.7%. The outlook for the UK was left unchanged at 1.5% this year and 1.6% in 2020, which means that Britain is expected to grow faster than Germany and Italy and just as fast as France. Of the nations in the G7, only the United States and Canada are expected to outpace Britain.
Glaxo chairman surprises City by leaving before break-up deal. Sir Philip Hampton has told GlaxoSmithKline (GSK) that he plans to step down as chairman only a month after it struck a landmark deal with a US rival that prepares the way for its break-up. In an announcement that caught the City by surprise yesterday, Britain’s biggest pharmaceuticals company did not set out a timeline for his departure and said it had started to search for a replacement. Sir Philip, 65, has been Glaxo’s chairman only since May 2015 and the latest boardroom change comes after it revealed plans in December to merge its consumer healthcare division with Pfizer’s through a joint venture. Glaxo plans to demerge the business within three years of the Pfizer deal closing in the second half of this year through a separate British stock market listing.
Just Eat boss is out after failing to feed investors’ appetites. The chief executive of Just Eat (JE.) has left the takeaway delivery company abruptly after only 16 months following criticism from an American activist investor and a slump in the group’s shares. Peter Plumb, who joined Just Eat in September 2017 after eight years in charge of Moneysupermarket, has stepped down with immediate effect, the company said. Just Eat’s board will start the hunt for a permanent successor while Peter Duffy, the chief customer officer, leads the group in the interim. The shares reversed early falls in morning trade to close up 4½p at 662¾p, valuing the business at £4.5 billion.
Germans take control of BAE combat arm. BAE Systems (BA.) has sold a majority stake in the combat vehicles business behind the Challenger 2 tank to Rheinmetall for almost £30 million, in a deal that will safeguard more than 400 jobs. Rheinmetall, the German group, is spending £28.6 million on a 55% stake in the BAE business, creating a joint venture that will be headquartered at BAE’s facility in Telford. The deal, which is subject to regulatory approval and is expected to complete in the first half of the year, will “sustain” over 400 British jobs “as well as preserve key technology and engineering skills,” the companies said. The two businesses said that the new company, to be called Rheinmetall BAE Systems Land, would be a European market leader in military vehicles.
Meggitt lands $750m jet engine deal. A British aerospace company has secured a $750 million extension to its contract to supply components for the engines of stealth fighter jets. Meggitt (MGGT) said it had struck a ten-year global agreement with Pratt & Whitney, the US company that makes engines for Lockheed Martin’s F-22 Raptor and F-35 Lightning II aircraft. Meggitt, which was founded in 1947, provides products and services to the aerospace, defence and energy sectors and employs more than 11,000 people at about 40 manufacturing sites and offices worldwide. It reported revenues of £2.1 billion and pre-tax profits of £356 million in 2017. It acquired its existing contract to supply the engine parts for Pratt & Whitney’s F119 and F135 engines through its acquisition of Cobham’s composite business in 2015. Cobham first secured its contract in 2011, when it was announced as a $45 million, five-year deal.
Rolls-Royce vies for British nuclear role at Bradwell. Rolls-Royce Holdings (RR.) has made a fresh play to secure a central role in Britain’s nuclear revival, pitching its equipment for use in the proposed Chinese plant in Essex. The engineering giant has approached China General Nuclear (CGN) to propose using its control systems at the Bradwell plant instead of the Chinese company’s own kit. Rolls-Royce’s approach marks a change of tack in its UK nuclear strategy after its efforts to develop smaller reactors, dubbed “mini nukes”, foundered. Its talks with CGN, which were first reported by the Financial Times, come amid heightened scrutiny of Chinese control over UK critical infrastructure. CGN told The Times that it intended to proceed with its own control systems for the Essex plant and was seeking permission from UK safety authorities to use them.
British Land’s bosses head for exit in plan to slim down management. British Land Company (BLND) hailed a changing of the guard yesterday as it ousted two of its longest-serving and highest-paid executive directors. The 163-year-old property company said that Tim Roberts, head of offices, and Charlie Maudsley, head of retail, leisure and residential, were leaving the business by mutual agreement. Mr Roberts, 54, has been at the company for 22 years and was appointed to the board in 2006. Since then he has been head of the £6.1 billion offices portfolio. Mr Maudsley, 54, joined in 2010. The retail and leisure assets are worth £6.4 billion. Both directors were paid £1.1 million last year in salary, incentives, pension and benefits, making them the highest-paid executives at the company after Chris Grigg, the chief executive, who took home total rewards of £2.2 million.
Nike executive joins Superdry amid war of words. Superdry (SDRY) has hired a former Nike executive as creative director amid a continued public battle with its co-founder, Julian Dunkerton. The fashion retailer, best known for its jackets emblazoned with Japanese characters, said that Phil Dickinson would replace Brigitte Danielmeyer, who left for personal reasons after only a few months. Mr Dickinson has held a number of senior roles at Nike, the global footwear giant, and spearheaded the brand’s 2007 push into football. He also led the turnaround of the Umbro brand. Since 2013 Mr Dickinson, a graduate of Central Saint Martins, has been running his own design agency, with clients including Adidas, Diadora and Soho house. Mr Dickinson joins Superdry as it faces criticism from Mr Dunkerton, 53, about its performance and strategy.
Patisserie Valerie shareholders still in dark. The future of Patisserie Valerie remained unresolved last night, three days after a deadline with its banks came and went. Staff, shareholders and suppliers had to endure an agonising wait as last-ditch talks with HSBC and Barclays continued. Patisserie Holdings (CAKE), the parent company behind the troubled café chain, issued an update yesterday saying it was “still in discussions” with its lenders, and that it would notify investors when the talks have concluded. Patisserie Valerie employs about 2,800 workers at 200 cafés and factories in the UK. Luke Johnson, the former chairman of Channel 4 and Pizza Express, bought Patisserie Holdings in 2006 and floated the company on Aim, London’s junior market, in 2014 with a market value of £170 million.
Bookmaker cuts odds of site closures. William Hill (WMH) is gearing up to close betting shops and overhaul other sites as it battles tough conditions on the high street and the government clampdown on fixed-odds betting terminals. The bookmaker’s shares were down by 2¾p to 172¾p after it said that it expected to record a fall of about 15% in adjusted operating profits from continuing operations last year to about £234 million. It had previously guided investors to expect between £225 million and £245 million. William Hill traces its roots back 85 years and now has about 2,300 shops in the UK. Like other bookmakers, it is grappling with a range of pressures, such as the rise of online operations. As it seeks to mitigate the impact of the plan to cut maximum stakes wagered on fixed-odds betting terminals from £100 to £2, William Hill is now preparing to “remodel” its shops as it changes its focus on other products.
Activist investor Elliott Advisors is said to be considering taking a sizeable position in Dixons Carphone (DC.) following a sharp fall in the electronics retailer’s share price. Shares in the company moved higher on reports that the American investor has been carrying out a detailed analysis of its finances for several weeks. Dixons Carphone is due to issue a trading statement today in its first update since reporting heavy losses and a dividend cut last month. The group’s new boss, Alex Baldock, has initiated a turnaround strategy after the company reported a £440 million pre-tax loss compared with a profit of £54 million in 2017. The loss came as the chain booked nearly £500 million of exceptional charges linked with its struggling mobile business, regulatory issues and its British store estate. If Elliott decides to build a stake, it could campaign for Dixons Carphone to sell some of its more lucrative assets, according to Sky News, which first reported its interest in the retailer.
Kingfisher (KGF), the home improvement group, pulled back 9p to 217¾p after RBC cut the company to “underperform” from “sector perform”, citing a challenging outlook for the French and British housing markets.
Draper Esprit (GROW), the venture capital backer of technology businesses such as Revolut, Transferwise and Currencyfair, fell sharply after announcing a share placing at a 10% discount to the prior trading session’s close. The company raised £100 million to fund acquisitions via a placing of 18.9 million new ordinary shares at 530p per share.
Keystone Law Group (KEYS) added 50p to 390p after the law firm said it expected to report profits which were “comfortably ahead of current market expectations”. The self-styled “challenger law firm” targets the mid-market and said its platform model had “successfully attracted a significant number of new, high-quality lawyers which has helped us scale the business”.
LSE ‘plans to bid for Oslo Bors’. London Stock Exchange Group (LSE) was one of the biggest risers in the FTSE 100 following speculation that it is considering a bid for Norway’s Oslo Bors. Such an approach would be its first attempt at a deal with a rival exchange since its proposed merger with Deutsche Börse failed in 2017. The planned bid was first reported by the Evening Standard, which said the stock market operator has appointed banking advisers, although it did not name them. The LSE and Oslo Bors declined to comment. An approach by the LSE would start a bidding war for Oslo Bors, which is already the subject of a bid by Euronext, which operates stock exchanges in Paris, Amsterdam, Brussels, Lisbon and Dublin. It has offered to buy Oslo Bors for €625 million. In December it secured the backing of a majority of shareholders in the Oslo exchange to take it over, but the company took issue with the approach and said it would explore alternatives. This month the holding company for Oslo Bors said it had received interest from other parties, which are speculated to include Nasdaq.
Tempus – C&C Group (CCR): Hold. Impressive start to turning around Matthew Clark and Bibendum but businesses with exposure to discretionary consumer products are likely to face pressures this year
Tempus – Animalcare Group (ANCR): Sell. Shares have re-rated sharply but limited signs of performance stabilising
