The Australian bushfires have hit the production of climate-polluting coal, the world’s biggest mining company said. BHP Group PLC (BHP) said that output of energy coal at its New South Wales operations had been affected and risked being further constrained by the fires, which experts say have been exacerbated by global warming. “Smoke from regional bushfires and dust have reduced air quality at our operations, which has impacted December 2019 production,” it said. Machinery had to be operated more slowly amid reduced visibility and some staff had taken leave to protect their homes or to join volunteer firefighting efforts, the company said. “We are monitoring the situation and if air quality continues to deteriorate, then operations could be constrained further in the second half of the year,” it said. The irony was not lost on commentators as the bushfires intensify calls for the world’s biggest coal exporter, to scale back production. “You can’t make this stuff up!” Terry Serio, an Australian actor, tweeted.
Dixons Carphone (DC.) blamed a “clerical error” yesterday for an about-turn in which the electricals retailer admitted that a reported 2% rise in its sales over the Christmas period was actually a 2% decline. Almost seven hours after publishing its trading update for the key holiday season, Dixons Carphone issued an correction to its group sales figure that briefly sent its shares down.
A strong Christmas trading quarter, helped by the demise of the rival Thomas Cook Airlines, has enabled easyJet (EZJ) to proclaim that this winter will not be as bad as last year’s record worst. However, the budget airline has been put on notice by Sir Stelios Haji-Ioannou, its founder and 34% shareholder, that it needs to do much better and that he may cut up rough again unless annual earnings improve sharply. Total revenues between October and December, the first trading quarter of Easyjet’s financial year, rose by nearly 10% to £1.42 billion on passenger numbers up 2.8% at 22.2 million, demonstrating that the airline has been able to force through profitable fare increases.
Camellia (CAM) said that it faces allegations of serious assault and sexual misconduct against its staff in Africa. Camellia revealed the allegations as it warned that profits would be lower than expected because of sinking tea prices, hurricane damage in the Caribbean and a high tax bill. Employees in two of its African subsidiaries are facing allegations of assault, harassment and sexual misconduct. The company said that it had “received notification of claims to be made in the UK relating to allegations made by multiple individuals”, and added: “The company and its wider group takes any complaint of criminality, misconduct, illegality, or unethical behaviour extremely seriously. “The allegations are being urgently investigated. We have incurred legal costs during 2019 relating to this and further expenses are expected in 2020.”
TalkTalk Telecom Group (TALK) has agreed the delayed sale of its fledgling fibre broadband infrastructure business for £200 million to a rival backed by Goldman Sachs. The telecoms company also has agreed a long-term wholesale agreement with CityFibre Infrastructure Holdings (CITY), the buyer, to access its emerging full-fibre network. The sale of Talktalk’s Fibre Nation venture was expected last year, but it was postponed after Labour’s general election pledges to nationalise Openreach, BT’s broadband infrastructure division, and to provide “free” full-fibre broadband.
Long-serving chief financial officer of BP (BP.) is to retire this year after missing out on the top job. Brian Gilvary, 57, will leave BP at the end of June and will be replaced by Murray Auchincloss, 49, as the changing of the guard at the top of the group continues. Mr Auchincloss has worked closely with Bernard Looney, 49, BP’s incoming chief executive, who takes over from Bob Dudley, 64, in February. The departure of Mr Gilvary means that the company will have an all-new team at the top within the space of only 18 months, after Helge Lund, 57, replaced Carl-Henric Svanberg, 67, as chairman at the start of last year.
Hundreds of management jobs at Sainsbury (J) (SBRY) are being axed in the latest round of cutbacks by the company. It said that the job cuts were driven by its motivation to unite its supermarket with Argos, which it bought four years ago as part of attempts to tap into how modern shoppers buy online. Sainsbury’s refused to say how many jobs would go in this latest cull, but it said that it had cut one in five jobs across its senior leadership team since March last year. It added that plans to bring together teams in its commercial, retail, finance, digital, technology and HR functions would lead to a reduction of “hundreds of management roles”.
Setbacks on several fronts forced Joules Group (JOUL) to report an 82% fall in half-year pre-tax profit to £1.7 million, from £9.3 million last year. The retailer partly blamed a late Black Friday, but also had to pay out £6.7 million to close stores that were underperforming and to relocate its head office. Extending its distribution centre lease cost it £700,000. Revenue fell by 1.4% to £111.6 million in the half-year to November 24.
Sensyne Health (SENS) is considering potential acquisitions to accelerate its growth and arrest a slump in its share price. Sensyne Health said that it was “exploring a small number of strategic [mergers and acquisitions] opportunities that have the potential to scale our business more quickly to achieve a leadership position in the clinical artificial intelligence market and create value for shareholders”. The update was made alongside Sensyne’s half-year results, which showed a loss before tax of £9.9 million in the six months to the end of October, down from £10.3 million a year earlier.
Lloyds Banking Group (LLOY) has been accused of relying on contractual clauses to try to “evade” regulations governing the fair treatment of customers. A dispute in the High Court starting in June will examine whether Lloyds is entitled to use small print in its loan contracts to avoid rules designed to protect borrowers. Jason Schofield, a property developer, is seeking “consequential loss” damages of £6 million, which he claims arise from mis-sold interest rate swaps. Under a compensation scheme ordered by the Financial Conduct Authority, Mr Schofield, 57, received an undisclosed redress payment from Lloyds for direct costs associated with three swaps sold to him alongside loans from Bank of Scotland, part of Lloyds. However, when he sued the bank for the alleged knock-on effects of the swaps, it noted contractual clauses that meant Mr Schofield effectively had agreed that the bank was not offering him any advice on the merits of the swaps. It also claimed that it had not breached any regulatory requirements. He has pointed to financial regulations, which he claims mean that a bank cannot contractually exclude itself from regulatory obligations to private customers, including a requirement to clearly explain the nature of products.
The boss of Royal Bank of Scotland Group (RBS) is planning a clearout of several senior managers, with the head of the digital bank set to follow the leadership of the investment bank out of the door. The changes orchestrated by Alison Rose, who took on the top job last November, include the likely departure of Mark Bailie, 46, who runs Bo, RBS’s digital lender. RBS is also searching for a new head of its retail bank, while its marketing boss is likely to retire. Sky News first reported the changes. The departures are expected to take place within a few months and come after the chief executive and finance boss of Natwest Markets, RBS’s investment bank, left in December.
The chairman of Aviva (AV.) is to step down as the insurer wrestles with shareholder dissatisfaction over its strategy. Sir Adrian Montague, 71, the City grandee who has chaired the company since April 2015, will retire this year once a replacement has been found. The move marks further change at the top of the business after Maurice Tulloch, 50, took over as chief executive last March and Andy Briggs, 53, a senior executive who had been a contender for the top job, abruptly quit a month later. Jason Windsor, 47, replaced Tom Stoddard, 53, as Aviva’s finance chief last year, while there also has been a reshuffle of its non-executives.
The struggling foam mattress retailer that has tried to sell itself as a “sleep wellness brand” has sharply narrowed its losses after slashing the amount it spends on marketing. Eve Sleep PLC (EVE) has had its shares almost wiped out by profit warnings. In September, Eve called off merger talks with Simba, a rival, after cautioning that its sales would be below expectations. The company, valued at £5.6 million, said yesterday that its turnaround strategy had led to a 43% fall in full-year losses to £10.8 million and that it had halved its “cash burn”. Sales fell by a fifth to £23.8 million in the year to the end of December 2018 as the company said that it was focusing on “prioritising long-term profitability and cash-generation over short-term sales growth”.
Shares in Quilter PLC (QLT) jumped yesterday amid rumours that Warburg Pincus, the American private equity firm, was mulling a takeover bid. Both the British wealth manager and its possible suitor declined to comment, but many in the City seemed to think that such a tie-up could make sense. It is understood that Warburg Pincus is looking to sell its stake in Reiss, the fashion retailer, freeing up money to invest elsewhere. The initial talk was for a bid of £3.1 billion, although that is unlikely to be enough to win the backing of shareholders.
Legal & General Group (LGEN) rose 5½p to 307½p thanks to a gushing “buy” note from Bank of America. “We see L&G as a quality business, leading in each of its key markets, with an attractive (and growing) dividend yield,” Andrew Sinclair, an analyst at the bank, said.
Learning Technologies Group (LTG) re-established itself as one of the few billion-pound stocks on Aim after its shares rose 19½ to 157p. The online learning group, which provides tools to help businesses such as Glaxosmithkline and the BBC to train staff, lifted its profit forecasts again and expects adjusted underlying profit of at least £41 million in 2019.
Shares in Lekoil Ltd (DI) (LEK) jumped by a fifth yesterday after it secured extra time to find crucial funding to replace a $184 million loan that turned out to be fake. The oil producer believed that it had a deal with the Qatar Investment Authority to fund its share of development on its most promising asset, the Ogo field off the coast of Nigeria. It owed Optimum, its partner in the field, $10 million by the end of February and had to prove that it could raise a further $28 million or else risk losing the asset altogether. Lekoil said yesterday that Optimum had agreed to defer its obligations, so Lekoil must pay $2 million by March 20 and a further $7.6 million by May 2. It will have until July 2020 to show that it can raise the $28 million. Olalekan Akinyanmi, Lekoil’s chief executive, said: “We are focused on securing the necessary funding under the revised schedule.”
Tempus – Whitbread (WTB): Avoid. Frailties in the British and German economies make predicting stronger sales gains highly difficult
Tempus – Gamma Communications (GAMA): Buy. Quality, high-growth business with lots of overseas potential
