Primark profits buoy ABF as sugar business sours. Strong demand for clothes at Primark in the first half of its financial year has helped to cushion plummeting profits from sugar at its parent company, Associated British Foods (ABF). Adjusted operating profits at the retailer jumped 25% to £426 million on revenue of £3.63 billion in the six months to March 2. “Early customer reaction to the new spring/summer range has been encouraging,” the company said, adding that the UK was continuing to perform well. The sugar business has suffered from lower prices since the European Union ended its sugar quota regime and operating profits fell to £1 million from £106 million last year. The performance was slightly better than expected as company had said that sugar was on course to make “a marginal loss”.
The executive leading Aviva (AV.) UK business has abruptly left the insurance giant after missing out on the top job last month. Andy Briggs, 53, has stepped down from his role as the head of Aviva’s largest division with immediate effect after four years with the FTSE 100 company. He had been considered a frontrunner for the job of chief executive but was passed over for Maurice Tulloch, who led the insurer’s international business. Mr Briggs was previously the boss of Friends Life, which Aviva bought for £5.6 billion in 2015. Aviva is one of Britain’s biggest insurance companies, with 33 million customers. Last year it generated operating profits of £3.1 billion. Mr Tulloch, 50, was appointed following a five-month search after Mark Wilson was ousted in October.
Loungers seeks a cosy £80m with Aim listing. The neighbourhood café-bar operator behind the Lounge and Cosy Club brands has shrugged off sector fears and Brexit uncertainty to raise more than £80 million via a listing on the junior Aim market. Loungers, which operates 146 outlets across England and Wales, said that trading in its shares would start on Monday at 200p, valuing the company at £185 million, or £212.5 million including debt, a little below pre-listing estimates of at least £250 million. To ensure the success of the placing, the company has not only cut the price but also the amount raised. The proceeds of £83.3 million, of which £61.6 million is new money, compare to an original target of more than £100 million. Existing investors are selling shares worth £21.7 million, fewer than planned.
Builder’s boss makes U-turn on flat perk. Taylor Wimpey’s discount offer drew criticism. The chief executive of Taylor Wimpey (TW.) has moved to defuse a potential row by pulling out of plans to buy a luxury flat from the housebuilder at a £436,000 discount to the original asking price. The decision to scrap the plan came 24 hours after The Times reported how Pete Redfern, 46, was being offered the chance to buy the apartment in central London, which was originally priced at £2.48 million, for £2.04 million.
Bid talk breathes life into Thomas Cook Group (TCG). The floundering share price of Thomas Cook showed signs of life yesterday amid hopes that the travel group’s biggest shareholder could launch a £500 million-plus takeover bid. Shares of the 178-year-old company jumped by 4½p, or 18.3%, to 29p, on the back of speculation that Fosun International, co-founded by Guo Guangchang, 52, the Chinese billionaire owner of Club Med, could employ its 17% stake to make an offer. It is also believed to have received informal interest from private equity firms, although Thomas Cook’s failure to issue a stock exchange statement yesterday, despite the rise in its shares, suggests that the putative suitors are still a long way from putting a proposal on the table.
Johnson joins Patisserie Valerie creditor committee. Luke Johnson, the former executive chairman of Patisserie Valerie, has taken the “unusual” step of joining a committee of creditors to the failed café chain. He has been appointed, alongside his longstanding public relations consultancy, despite the committee’s role overseeing a review of potential legal claims against Patisserie Valerie’s board, of which he was executive chairman. The committee was formed last week to appoint a new administrator that will consider lawsuits against the auditor and directors of the chain. Mr Johnson, 57, was the largest shareholder in Patisserie Holdings (CAKE), the chain’s parent company. Maitland, the PR consultancy that advised the chain’s board, and HM Revenue & Customs also have been appointed.
‘Misappropriated’ funds put Ferrexpo charity in spotlight. Funds donated by Ferrexpo (FXPO) to its Ukrainian partner charity may have been misappropriated, the iron ore miner has warned. Ferrexpo published delayed annual results yesterday with a qualified opinion from auditors at Deloitte, who were unable to conclude whether the Blooming Land charity had spent $33.5 million that it had received from the miner on “legitimate business payments for charitable purposes”. Auditors also raised questions over the relationship between Blooming Land and Kostyantin Zhevago, Ferrexpo’s chief executive, saying that their investigations into the charity had identified “a significant number of potential associations and linkages adjacent” to him. As such, Deloitte was unable to conclude that Mr Zhevago, 45, did not have significant influence over Blooming Land, despite that being the unanimous conclusion reached by the Ferrexpo board.
Fevertree bosses toast £7m payday. The co-founders of Fevertree Drinks (FEVR) have raised a glass to total pay of more than £7 million last year after smashing performance targets linked to a long-term incentive scheme. Tim Warrillow, 44, chief executive of the premium mixers group, saw his pay packet soar from £844,000 in 2017 to £3.98 million thanks to a £3.06 million payout on a 2016 incentive scheme, alongside a £552,000 annual bonus. Charles Rolls, 61, non-executive deputy chairman, was paid a total of £3.18 million, up from £360,000 in 2017, after he qualified for the same 2016 incentive scheme award.
Sainsbury’s stores are sold by the dozen. British Land Company (BLND) has sold a dozen Sainsbury’s superstores for £429 million as it reduces its exposure to retail property. The FTSE 100 group said that it had sold 12 stores, part of a joint venture with Sainsbury’s, to Realty Income Corporation, a New York-based investor. The sale price represents a 7.4% discount to the portfolio’s peak valuation at £463.1 million in 2007. British Land’s interest in the properties accounted for £193.5 million of the total figure, which it said was a “modest premium” to its value in September.
Barclays boss faces AGM protest vote. Shareholders in Barclays (BARC) have been advised to vote against its remuneration report after the bank’s chief executive was embroiled in a long-running investigation into his pursuit of an internal whistleblower. Institutional Shareholder Services, which is used by fund managers to guide their decisions about how to vote at companies’ annual meetings, said that shareholders should register a protest over the scandal by voting against the pay report. Barclays said that it would cut Jes Staley’s pay by £500,000 and he was fined £642,000 by UK regulators last May. The bank also was fined $15 million by the New York department of financial services in December.
Former London executives named in BT Italy inquiry. Two senior executives working for BT Group (BT.A) in London have been implicated in a £530 million accounting fraud at the telecoms group’s Italian division. A report on the scandal, which led to the departure of Gavin Patterson, 51, as BT’s chief executive last year, has alleged that individuals working at the group’s head office were aware of the fraud. The 353-page report prepared by prosecutors in Italy has been seen by Reuters, the news agency. The document claims that a network of people in BT’s Italian unit exaggerated revenues, faked contract renewals and invoices and invented supplier transactions in order to hide the true financial performance of the division and to meet bonus targets. Prosecutors name three group executives, two of whom worked in London, as suspects in its case. All three have left BT since the scandal surfaced.
Deutsche and UBS in talks over asset manager merger. The asset management divisions of UBS and Deutsche Bank are believed to be in talks about a merger that would create one of Europe’s largest investment houses. The discussions about a possible deal have been taking place “for a couple of months”, according to The Financial Times. If successful, the two sides would create an investment manager with €1.4 trillion of assets. One structure being considered would be for UBS to separate its asset management unit, which looks after €700 billion, and fold it into Deutsche Bank’s wealth management division in exchange for shares in the larger group. Deutsche Bank’s investment unit, which is 79%-owned by the banking group, has €662 billion of assets under management.
Bank of America Merrill Lynch isued an unusual “double upgrade” for Travis Perkins (TPK) yesterday. No longer a mere “underperform”, they decided that the builders’ merchant was a “buy”, citing signs of a stabilisation in the housing market, low interest rates and healthier consumer confidence — enough, they predicted, to send DIYers out in search of supplies and the company’s share price on an upward trajectory. They liked the planned simplification of the business through the sale of its plumbing and heating division, a move that was discussed as far back as December, and went further, forecasting that Wickes, the company’s DIY chain, could be sold in the medium term. Add to that positive vibes from the arrival of Nick Roberts as the new chief executive back in the summer and the analysts decided that the “worst-case scenario is now less likely to materialise” and said that they did not see signs of “incremental deterioration.” Bank of America Merrill Lynch issued a price target of £17.
Fresnillo (FRES), the precious metals miner, slipped 18½p, or 2.4 per cent, to 760p, after gold prices fell as a result of a higher dollar and after Bank of Montreal downgraded the stock.
A strong sales outlook from Proctor & Gamble, the American consumer goods giant, sent shares higher across the sector. Reckitt Benckiser Group (RB.) added 130p, or 2.2%, to £59.42; Unilever (ULVR) edged up 24p, or 0.5%, to £45.28.
Indivior (INDV), the drugs maker facing a US Department of Justice indictment and damages claims of more than $3 billion, rose 2p to 43p as Jefferies analysts said that a “lack of visibility means volatility is likely to continue”. Issuing a “hold” rating, they said: “We expect any damages would likely be settled with phased payments. If the penalty for Indivior was $1.5 billion, we calculate that Indivior would need to sell assets as this can’t be funded with current liquidity and our forecasted free cashflow.”
Oxford Biomedica (OXB), the gene and cell therapy company, was lifted 29p to 694p after stock exchange filings showed Andrew Heath, its deputy chairman, had spent more than £40,000 buying shares in the business.
Jadestone Energy (JSE), an oil and gas production company focused on the Asia Pacific region, added 1½p to 51p after analysts at Cantor Fitzgerald issued a “buy” rating for the stock and a 103p price target. “Jadestone continues to trade at a significant discount to both peers and net asset value, despite the strong performance since the IPO,” they said. “With the company benefiting from higher commodity prices, we anticipate the company moving into a net cash position in 2019.”
Totally (TLY), the out-of-hospital healthcare provider, rose ½p to 12p after it said that Vocare, its subsidiary, had won a contract with the NHS Newcastle & Gateshead Clinical Commissioning Group worth up to £13.5 million.
Angling retailer nets sales leap. Shares in a fishing tackle and equipment retailer shot up more than 8% after it reported a big rise in sales. Angling Direct (ANG) said that like-for-like sales in its 27 stores were up 28.5% in February and March, while the like-for-like number of shopper visits was 29.5% higher. It sells more than 21,500 products, including consumables, luggage and clothing for fishing and has launched German, French and Dutch websites, helping to drive a 27 per cent rise in online orders and a 66% jump in European sales, the company said in a trading update.
Tempus – Mercantile Investment Trust (The) (MRC): Hold. Cautious but reliable investment trust whose shares have regained momentum this year
Tempus – Homeserve (HSV): Buy. US growth targets look conservative and Checkatrade has potential
