Royal Mail (RMG) warned that its domestic business could fall into the red next year owing to a steeper-than-expected decline in letter deliveries. The former postal monopoly said that volumes would fall by between 7% and 9% in the current financial year, two percentage points worse than its previous forecast. It said that it would deliver between 6 and 8% fewer letters next year, compared with earlier guidance for a 4-6% decline.
The chairman of Wetherspoon (J.D.) (JDW) renewed his attack on “box-ticking institutions” yesterday after a potential shareholder revolt against the pub company’s practices at the annual meeting turned into a damp squib. Tim Martin had last week launched a scathing attack on City shareholders and the proxy voting agencies that advise them, accusing them of “short-termism, inexperience and navel-gazing”. He also branded them hypocritical for failing to adopt the practices they demand of quoted companies. However, calls by agencies including Pirc, ISS and Glass Lewis, to vote against resolutions ranging from remuneration to Mr Martin’s re-election were roundly defeated.
The owner of British Gas moved to reassure shareholders that customer defections were slowing at its consumer energy supply arm as it stuck to its annual earnings targets but lifted its efficiency savings drive by £50 million. Shares in Centrica (CNA) jumped more than 9% after it reported that British Gas had lost 107,000 customers since the end of June, far fewer than the 178,000 accounts that had gone over the previous six months. Britain’s biggest energy supplier said that the departures at British Gas had been more than offset by new customers at its Centrica Consumer business, which provides services to householders who receive their energy from other suppliers as well as British Gas.
The chief executive of Severn Trent (SVT) has warned Labour against nationalising the water industry, arguing it risks reducing investment or potentially hitting school and hospital budgets. The company and its peers are facing heightened political and regulatory uncertainty with next month’s general election coming just days before Ofwat is due to outline its pricing settlement for the next five years. Severn Trent issued its half-year results yesterday, with profit falling 4.6% to £285.3 million in the six months to September 30, but attention in the City was on Ofwat’s plans and the potential for a Labour majority.
Mitie Group (MTO) has warned that some clients were putting new projects on ice because of uncertainties over Brexit and the forthcoming general election. Mitie, which provides building maintenance, cleaning, catering and security services, said revenues would be “broadly” flat this year. Phil Bentley, chief executive, said “day-to-day projects carry on”, but “decisions on new roofs, boilers, etc” had been “pushed back”. “There is no doubt that we continue to operate in a challenging industry of rising labour costs and margin pressures. Political and economic uncertainty may adversely affect our customers’ approach to outsourcing decisions and our ability to plan and invest”, the company said yesterday.
The chief executive of easyHotel (EZH) is expected to take on a number of non-executive and part-time roles after announcing his surprise resignation. Guy Parsons, 56, who had run the budget chain since 2015, left with immediate effect yesterday and has been replaced by Scott Christie, 53, the non-executive interim chairman, until a permanent replacement is found. His abrupt exit comes less than two months after the conclusion of a recommended 95p-a-share takeover bid for Easyhotel by two property groups — Icamap Investments, a Luxembourg-based fund that held a 38.7% stake, and Ivanhoé Cambridge, of Canada.
Rowan Gormley, the man who transformed Majestic Wine into a solely online business, has announced his shock retirement only three months after striking a deal to sell all its shops. Majestic Wine (WINE), as the business is now known, said that Mr Gormley, 57, would be retiring after the Christmas trading season and once the £95 million sale of Majestic’s 180 shops to Softbank’s Fortress investment arm was complete. He will be succeeded by Nick Devlin, 34, chief operating officer, after an 18-month succession planning process to focus on the “next chapter”, the company said. “Now it is time to hand over to a new team,” Mr Gormley said.
The closure of 700 betting shops took its toll of William Hill (WMH) over the past four months, although the sharp fall in retail revenues was offset by strong growth in its US operations. The bookmaker, which was founded in 1934 and has 12,500 employees, reported a 1% rise in total net revenue in the 17 weeks to October 29 after a 23% decline in retail takings. Betting shops have been closing as a result of the slashing of the maximum stake on lucrative fixed-odds betting terminals from £100 to £2 in April. Machine revenues at William Hill’s shops fell by 45% in the 17 weeks.
Profits at Johnson Matthey (JMAT) fell in the first half of the year as it struggled with the costs resulting from delays in opening a new factory in Poland. The chemicals company, which helps produce catalytic converters that cut pollution and emissions from engines, said it had enjoyed sales growth in its clean air division as automotive companies responded to stricter environmental targets. This, however, put extra pressure on Johnson Matthey’s manufacturing capacity. The company has 13 factories around the world and is building three new ones in Poland, India and China.
The owner of Jet2.com, Britain’s third biggest airline, has continued to flourish as it reported a 16 per cent rise in revenues and a 2% rise pre-tax profits, sending its shares up 5%. Dart Group (DTG), which is now worth more than £2 billion, said its performance had been boosted by an increase in customer demand for holidays in the later half of the summer season, partly as a result of the collapse of Thomas Cook. The AIM-quoted group reported a rise in profits to £339.7 million for the six months to the end of September, building on the 63% rise in its previous financial year.
