The turmoil in the retail industry has hit the West End of London, as Shaftesbury (SHB), the owner of large parts of Covent Garden, Chinatown and Carnaby Street, has suffered a fall in earnings. Yesterday it reported an 85% slide in annual pre-tax profit to £26 million after the value of its Covent Garden properties was written down. The value of the company’s portfolio fell by 0.6% in the 12 months to the end of September, including an 8.5% drop in its Longmartin joint venture, which owns St Martin’s Courtyard in Covent Garden. Shaftesbury owns about 15 acres in the West End, including 600 buildings in Covent Garden, Chinatown, Soho, Fitzrovia and Carnaby Street.
The printer of Britain’s banknotes has warned that it could go bust. De La Rue (DLAR) admitted yesterday that there were doubts about its survival as it scrapped dividend payments and revealed a litany of issues. Reporting first-half figures that showed a slump into the red and a danger of breaking banking covenants because of spiralling debts, Kevin Loosemore, the chairman, told the stock market: “We have concluded there is material uncertainty that casts significant doubt on the group’s ability to continue as a going concern.” The news sent shares in De La Rue tumbling, closing down at 134p, a 19-year low.
Mortgage approvals by the big lenders fell to a seven-month low last month as uncertainty about the general election and Brexit put off buyers. The number of approvals for house purchases, which is regarded as an early indicator of the health of the property market, fell by 1,000 to 41,219 from 42,216 in September, figures from UK Finance, the industry association, showed. It was the third month running that approvals dropped and comes amid signs that the economy is struggling. Monthly approvals are now almost 2,000 below the recent July high. Gross mortgage lending, at £25.5 billion, was down 0.9% compared with October last year.
The boss of Virgin Trains has defected to FirstGroup (FGP) to run the west coast main line rail franchise just before it takes over the country’s most lucrative network next month. Phil Whittingham, a stalwart of Virgin Trains since it was handed the franchise at privatisation 23 years ago, is to continue running the line that links London, Birmingham, Manchester and Glasgow. This is despite Virgin’s criticism of the Department for Transport’s decision to ditch it in favour of a First Group joint venture with Trenitalia, the Italian state railway. Mr Whittingham, 48, Virgin Trains’ managing director since 2013, will lead a mass migration of his management team to First Group.
Compass Group (CPG), the world’s biggest catering group has sounded a warning about the European economy after being forced to take a £300 million hit amid deteriorating conditions in several countries on the Continent. Compass Group, which provides food for factory and office canteens, warned that fewer people were eating its products because several of its multinational clients in the automotive and banking sectors were cutting their workforces. It said that it was “not immune to the macro environment” and that there would be redundancies among its own employees, affecting about 3,000 of its global staff of 600,000 and “in the low hundreds” of its 60,000 UK workers.
Pampering more pooches and overhauling its vet practice has helped Pets at Home Group (PETS) to raise its profit guidance after an improvement in sales. Peter Pritchard, who took over as chief executive last April, has reacted to fears that the retailer was losing customers to online competitors by cutting prices and offering services, such as pet pedicures and dog walking, that cannot be bought on the internet. Pets at Home was founded by Anthony Preston in 1991 and has 452 stores. Last year its stock was the third most heavily shorted as hedge funds bet against its turnaround ambitions. The upbeat results propelled the shares up by 34¼p, to 233½p.
Codemasters (CDM) has had a storming first half, with millions more players signing up to its digital platforms. The video games developer known for its motor racing games, made a profit of £10.5 million, reversing a loss of £7.7 million previously. The company said that revenue in the six months to the end of September had inched up to £39.8 million from £39.7 million last time. Digital sales of games such as F1 2019, F1 Mobile Racing and Dirt Rally 2.0 continued to increase, representing 61.7% of total sales, compared with 53.4% last year.
One of Just Eat’s leading investors is calling on fellow shareholders to stem the “terrible value destruction” of recent years and accept the recommended all-paper bid from Takeaway.com. Cat Rock Capital Management, which has shares in both companies, has sent an open letter to shareholders claiming that the deal, worth 682p a share at the present Takeaway.com share price, would create a “formidable global leader”. Alex Captain, the Cat Rock founder and managing partner, also urges Just Eat (JE.) investors to rebuff a rival all-cash offer from Prosus, a Dutch subsidiary of Naspers, the South African technology group, dismissing the 710p-a-share level as “an incredibly low price”.
Labour’s plan to force landlords to submit their properties to an annual check would be good for the private rental market, according to Britain’s biggest specialist lender in the field. Banks already impose strict conditions on landlords as part of their loan agreements, so forcing the whole sector to raise standards would not be an extra burden for lenders, Nigel Terrington, chief executive of Paragon Banking Group (PAG), said. Jeremy Corbyn has pledged to introduce a legal requirement for landlords to submit their properties for annual inspection. “We do that anyway. Before we make a loan, we send a surveyor and if a property is not up to scratch we do not lend against it,” Mr Terrington said.
Converting rubbish to energy is ensuring that profits rise at Pennon Group (PNN), despite falling revenues in supplying water to the West Country, where most households are metered. Despite the uncertainties caused by Labour’s pledge to bring the monopoly regional water suppliers back into public ownership, the news sent shares in Pennon close to an all-time high. Pennon is valued at almost £4 billion and comprising South West Water, the regulated utility, and Viridor, the waste management company. The group floated in the 1989 water privatisation, moved into rubbish and recycling in the 1990s and consolidated acquisitions into what became Viridor.
