Vodafone kicks off search for successor to chairman Gerard Kleisterlee. Vodafone Group (VOD) has started the hunt for a successor to chairman Gerard Kleisterlee in the latest top-level change after the appointment of a new chief executive last year. The telecoms giant has instructed headhunters at MWM Consulting to find a replacement for Kleisterlee. Companies are required to replace their chairmen after nine years under the corporate governance code. Kleisterlee, 72, who was paid £710,000 last year, will have served nine years by 2020. It is understood there has been no final decision taken on his future at Vodafone and any change will be made next year at the earliest.
Ailing SSE explores sell-off to TalkTalk. Struggling power supplier SSE (SSE) has held talks about selling its retail division to telecoms company TalkTalk Telecom Group (TALK). SSE has had discussions with several utility providers and is believed to value the division at about £1bn, according to Sky News. It had planned to spin off the division, which supplies about 6m households, into an independent listed entity with rival Npower. However, the deal fell through last year amid changing market conditions. SSE, which is being advised by investment banks Credit Suisse and Morgan Stanley, is now stepping up efforts to find an alternative solution. TalkTalk does not sell gas or power but there may be logic in a tie-up as utility companies look to lock in customers with different services. Energy giant Shell’s First Utility sells broadband alongside power and gas. A deal with TalkTalk is unlikely, but the talks show how desperate SSE, run by Alistair Phillips-Davies, has become to get rid of the business. It wants to focus on renewable power generation.
Barclays set for showdown over Edward Bramson and pay. Barclays (BARC) is braced for a bruising shareholder row over boardroom pay this week, after a leading investor body added to concerns about rewards at the bank. The Investment Association (IA) issued an “amber top” alert last week to warn about the scale of pension payments to chief executive Jes Staley, as part of its campaign to clamp down on outsized retirement contributions to bosses. It comes amid heightened attention on Thursday’s annual meeting, where Staley faces a showdown with activist Edward Bramson, who is pressing to be elected to the board. His Sherborne investment vehicle has a 5.5% stake in Barclays and is pushing for a review of the investment banking division. The scale of support for the New York-based activist will be scrutinised alongside the vote on pay. One investor said: “If Bramson gets less than 20%, then I think the bank is in a good place. If he gets 30% . . . it does look like a severe marking of the card.”
Metro Bank freezes bosses’ bonuses. Metro Bank (MTRO) has frozen almost £1m of bonuses for three executives while investigations into accounting errors continue. The decision was taken after the bank admitted in January that it had not properly measured the risk attached to some lending. Metro plans to raise £350m and faces inquiries by the Financial Conduct Authority and the Bank of England. Shares worth about £480,000 were due to chief executive Craig Donaldson, and about £250,000 each for finance director David Arden and his predecessor Mike Brierley. The details are given in Metro’s annual report, which was published last week ahead of the quarterly results this Wednesday.
Sales dive as Sainsbury’s boss Mike Coupe plots future. Coupe pressed to refresh strategy after Asda defeat. Sainsbury (J) (SBRY) is poised to report falling sales as the supermarket giant faces questions about its future after regulators blocked its £14bn merger with Asda. Analysts expect like-for-like sales, excluding fuel, to be down 0.3% when Britain’s third-biggest supermarket reveals full-year results on Wednesday. Sluggish performance in food is expected to have dragged sales 1.6% lower during the fourth quarter, leading to a second consecutive quarter of decline. That slump, however, will not stop underlying pre-tax profits growing by 6% to £626m for the year. Investors will pay close attention to chief executive Mike Coupe’s comments on strategy after the Competition & Markets Authority (CMA) shot down his attempt to leapfrog Tesco and forge Britain’s No 1 supermarket chain.
Petrofac chief Ayman Asfari under fire. The boss of the embattled oil services supplier Petrofac Ltd. (PFC) faces a showdown with investors. The advisory company Institutional Shareholder Services has recommended that investors abstain on Ayman Asfari’s re-election at the annual meeting on Friday. Petrofac is being investigated by the Serious Fraud Office for suspected bribery, corruption and money laundering. The probe is part of the SFO’s investigation into the Monaco-based consultancy Unaoil. As part of the case, Petrofac’s ex-head of sales, David Lufkin, 51, pleaded guilty to 11 counts of bribery over payments worth about $51m made to win contracts in Iraq and Saudi Arabia. Asfari, 60, has been fined for insider trading in Italy but is taking his case to appeal.
Thomas Cook Group (TCG) caught between debt and a China boom. The struggling travel operator is looking east for a new source of tourists and funds. Friends questioned Wolfgang Georg Arlt’s judgment when he set up a tour operator in Berlin in the late 1990s with a single focus: attracting visitors from China. Arlt, though, was convinced he had spotted an opportunity. The Communist government under President Jiang Zemin had just passed legislation allowing its citizens to travel abroad. It was reasonable to think that the German capital would be one of the first stops in Europe for the newly emancipated wave of Chinese holidaymakers. At first, the going was slow. It was difficult for aspiring tourists to apply for passports or get hold of hard currency. Worse still, couples were banned from travelling together because it was feared that they might never return to the People’s Republic. Wives remained at home under state surveillance and were sent to labour camps if their husbands did not come back.
Boku, Inc (DI) Reg S (BOKU) allows users to make payments through their handsets, charging them via their mobile phone bills. The way it tackles payment friction has been one of the company’s biggest draws: users do not need to register with a credit or debit card to start spending. Boku takes a fee for processing the payment. So far, customers have been convinced. It has more than 176 carriers for DCB, including mobile operators O2, Vodafone and EE. Apple and Microsoft use it in their app stores, while Spotify, the music subscription service, saw a 20% rise in payments for its premium service when it brought Boku on board. Investors, however, have stayed stubbornly sceptical. Shareholders balked when it warned that this year’s earnings would come under pressure as it invests in the loss-making acquisition, which counts Uber and French bank BNP Paribas among its customers. There are signs, however, that the market overreacted. Growth is motoring ahead. Sales were up 45% to £27m last year, while monthly users rose 69% to 13.5m in December against 2017. Analysts at Peel Hunt have set a price target of 245p, tipping the payment business to “surprise on the upside”. Industry analysts expect payments using DCB to grow from $26bn (£20bn) last year to $49bn by 2023, and Boku should be in a prime position to capitalise. Buy.
