Sirius warns its future may be in doubt as mine bill rises. A group attempting to set up a huge fertiliser mine in North Yorkshire has admitted there may be “significant doubt over its ability to continue as a going concern” as it nears crunch time in its attempts to find finance. Sirius Minerals (SXX) said yesterday that it still expected to secure up to $3.6 billion that it needs for the project to proceed, but admitted for the first time that this was subject to “material uncertainty”. Auditors at PWC included an “emphasis of matter” in Sirius’s half-year results announcement to draw attention to the “going concern” warning.
Sainsbury’s-Asda merger poses competition risk. Regulator’s finding means hundreds of stores may have to be sold. The competition watchdog has warned that the merger of Sainsbury (J) (SBRY) and Asda poses a substantial risk to competition in 463 areas across the country. In the first real sign of the regulatory challenge facing Britain’s second and third largest grocers, the Competition and Markets Authority (CMA) said there was “a realistic prospect of a substantial lessening of competition if Sainsbury’s and Asda are insufficiently constrained by other local competitors”. This means that the two grocers could be forced to offload hundreds of stores to get their merger cleared.
Rebels taste defeat as Russian miner’s founder Peter Hambro returns. Petropavlovsk (POG) co-founder Peter Hambro has rejoined the Russian gold mining group, more than a year after he was kicked off the board by rebel shareholders. He will become the company’s president, a newly-created non-board position, and act as a senior adviser as it attempts to move on from a period of corporate turmoil.
Uphill battle for Halfords Group (HFD) to sell expensive investment strategy. Britain’s biggest bike retailer is to invest in its online activities while opening more garages and specialist cycle shops in a plan that could stall any further profit growth until 2021. Halfords’ strategy announcement sent its shares down 7.6%, or 25½p, to close at 310¼p after its chief executive said that investment in the chain was needed to enable it to become a “truly differentiated, service-led super specialist”.
Tui’s strong earnings leave rivals in shade. TUI AG Reg Shs (DI) (TUI) shrugged off this week’s profit warning from Thomas Cook and reassured its investors that it remained on track to deliver a fourth consecutive year of double-digit earnings growth. The FTSE 100 travel group said that, despite the hot weather in northern Europe this summer, the number of holidays sold had grown in all its main markets, although the heat had “limited our ability to outperform”. It attributed its resilience to having its own hotels, resorts and cruise ships, which had reduced the business’s seasonality and its susceptibility to external factors.
The owner of Peppa Pig has raised the value of its library of TV shows and films as it prepares for the release of a feature-length version of children’s cartoon series. Entertainment One Limited (ETO), the film and TV company that is listed in London but based in Toronto, said that it was on track to launch Peppa Pig: My First Movie Experience in Chinese cinemas early next year. The film is a co-production with Alibaba, the Chinese ecommerce giant, and will be out in time for Chinese new year, the year of the pig.
Quite a Saga in insurance as profits fall. Profits at Saga (SAGA) have been dampened by an investment drive targeting new customers but the travel-to-insurance group said the strategy was working. Underlying pre-tax profit in the six months to the end of July was down 3.7% to £106.8 million from £110.9 million a year earlier as Saga boosted marketing expenditure and battled price competition.
Winemaker Chapel Down Group plc (CDGP) raises spirits with gin bar. Britain’s biggest winemaker is to branch out by opening a bar, restaurant and gin micro-distillery in King’s Cross as part of its ambitious expansion plans. Chapel Down Group said yesterday that it had exchanged contracts on a 5,000 sq ft site by Regent’s Canal where, subject to planning and licensing, it will open the Chapel Down Gin Works.
Drinks binge ends at M&B but the high costs remain. Mitchells & Butlers (MAB) said that its drink sales had returned to more normal levels after a surge in takings during the summer heatwave and World Cup. The Harvester and All Bar One operator sells a greater proportion of food than most of its peers, but in its third-quarter trading update in August it had reported a 3.9% jump in drink sales while food sales fell by 1.8%. In yesterday’s full-year update, however, M&B said that while overall like-for-like sales growth over the past eight weeks had accelerated from 0.9% to 2.2%, it had seen “a more normalised split between drink and food sales following a period of very strong drink growth over the summer”.
Fuel costs put Carnival cruises off course. Carnival (CCL) warned rising fuel costs would dent its fourth quarter performance, sending its shares tumbling. Stock in the world’s largest cruise line operator, a $45 billion company, which owns P&O Cruises and Cunard lines, fell by 4.8% to close at $63.74 in New York last night, having recovered from earlier heavy losses. The cost of oil has risen this year from $67 a barrel to $81. Carnival spent $434 million on fuel in the third quarter, up from $307 million in the quarter a year ago.
A harsh dose of reality around a potential blockbuster drug to treat opioid addicts sent shares in Indivior (INDV) on a severe downward spiral for a second consecutive day. Investors who missed the exit at the end of trading on Monday were out of the door yesterday, with 21 million shares changing hands, compared with a daily average of about 2 million. It said that it expects sentiment around the drug to remain low, despite the results from its survey showing demand for the drug could be about 20% of all patients. The analysts added: “The launch suggests that there are barriers in the prescription journey outside of Indivior’s control that are limiting the transfer from demand to treatment. “As a result, we expect while demand for the treatment is strong, prescriptions will be materially lower.”
The FTSE 100 rose to a four-week high, up 33.95 points to 7,545.44, as the dollar’s climb after the US interest rate rise boosted its overseas earning constituents. The broader FTSE 250 closed down 62.67 points at 20,374.21.
Fast fashion lived up to its name as buyers in a discounted sale of two million ASOS (ASC) shares by its biggest investor on Wednesday appeared to have flipped them for a quick profit the following day. Bestseller United, a Danish fashion firm, raised £113.7 million from the sale of shares at £56.85 each, a 5% discount to Wednesday’s close of £59.86 per share. Asos was sent down 288p, or 4.8 per cent, to £56.98. Bestseller retains about 27% of the company’s share capital and said it has no intention of seeing its position fall below 25%.
DCC (DCC) was among the biggest fallers on the premier index after announcing a 10% share placing to fund the £130 million acquisition of Jam Group, the Canada-based musical instruments distributor. Despite an in-line trading update, the placing was out of tune with investors, sending shares down 310p to £70.00.
The deal by Rothesay Life, the specialist insurer, to buy an £860 million portfolio of equity release loans from the “bad bank” set up by the government propelled Just Group (JUST) close to the top of the FTSE 250. Just Group’s shares have taken a hammering since the Prudential Regulation Authority began scrutinising the amount of capital insurers should be required to hold against equity release mortgages. However, the Rothesay deal represents a big bet that the PRA will not make the worst-case scenario changes to regulations. Just Group closed up 7½p, or 9 per cent, at 90p.
In a statement shortly after the market close, Games Workshop Group (GAW) said Tom Kirby, its former chairman, wants to sell £20 million of ordinary shares in the company, reflecting 1.6% of its issued share capital. The shares in the miniature wargaming manufacturing company will be sold through an accelerated bookbuild, with Peel Hunt acting as sole bookrunner.
Tempus – DCC (DCC): Buy. Well managed, acquisitive, growing business that shows no sign whatsoever of slowing down
Tempus – Halma (HLMA): Hold long term. Quality growth business whose share price is enviable
