Legal & General Group (LGEN) to fight Unilever (ULVR) move. Pressure is mounting on Unilever over its plans to relocate to the Netherlands after a fifth big shareholder raised concerns and as a potential revolt emerged against the chairman’s re-election. In a blow to Unilever’s campaign to convince shareholders to back its restructuring, Legal & General Investment Management said that it would vote against the consumer group’s contentious plan to abandon its 88-year dual-governance structure.
Fresh questions are being asked about the culture at the top of Millennium & Copthorne Hotels (MLC) after the abrupt exit of another chief executive after less than four months in the post. Jennifer Fox, who will receive a £1 million payoff, is not the first chief to have taken an early checkout from a listed company regarded as having an unusually high turnover of board directors. Ms Fox, who during a 30-year career has held senior roles at hotel groups including Fairmont, Starwood and Intercontinental, is said by insiders to have had a clash of personalities with Kwek Leng Beng, M&C’s Singapore-based chairman and 65% shareholder.
Sir Martin Sorrell said yesterday that he was ready for more takeovers after his new venture took its bow on the stock exchange. The advertising tycoon, who left the industry giant WPP abruptly in April, vowed to turn S4 Capital (SFOR) into a “next generation” business fit for the digital era as shares in the company started trading. Sir Martin, 73, said that more deals were on the cards after his €300 million cash-and-shares acquisition of Media Monks, a Dutch agency that creates advertising campaigns for large companies.
United Utilities Group (UU.) provides services to 3.2 million homes and 200,000 businesses in a region that stretches from Liverpool up into Cumbria and the Lake District, where it operates the Thirlmere reservoir. With Britain enjoying, or enduring, the hottest summer on record this year, United Utilities said that it had deployed special teams to repair leaks and burst pipes. With reservoir levels running low, it had to bring in highly powered pumps to shift water into its pipes, as well as drilling bore holes to reach fresh reserves. It said that such measures were among the main reasons that no hosepipe bans were introduced in the region during the summer.
Following winds set to ease off, warns easyJet (EZJ). The honeymoon for the chief executive of Easyjet is over after Britain’s busiest airline admitted that the benefits over the past year from the failures of Monarch and Air Berlin, as well as industrial unrest and operational problems at Ryanair, would unwind over the next year. In an update before the end of its financial year this weekend, Easyjet said that it would make between £570 million and £580 million of profits this year, 40 per cent ahead of the previous year and in the top half of the airline’s forecasts.
There was a rare morsel of good news for the government contracting sector yesterday when Serco Group (SRP) said that its revenues, profit and debt would be much better than expected this year. The news was a partial vindication of the rescue plan put in place by Rupert Soames, who joined from Aggreko in 2014 charged with turning the company around after it had been caught lying to the Ministry of Justice over prisoner contracts. It also was investigated by the Serious Fraud Office.
A jump in insurance claims caused by flash floods in May and the hot summer months that followed has forced the group that owns the More Than brand into an unexpected profits warning. RSA Insurance Group (RSA) brought forward a scheduled quarterly trading update by more than a month yesterday to alert its shareholders to an underwriting loss of about £70 million suffered by its British division. The loss, on trading between July and September, has put growth in RSA’s annual earnings in jeopardy.
AA (AA.) blamed a “pothole epidemic” for hitting its profits this week, but that doesn’t appear to be the only obstacle disrupting its progress. Yesterday fears of new competition rules around customer pricing sent the motor group’s shares into reverse once again. The car insurance and breakdown service provider fell close to the bottom of the FTSE 250 after Citizens Advice, the consumer body, issued a “super complaint” to the Competition and Markets Authority over the practice of charging “loyal” customers far more than new ones. The complaint doesn’t mention breakdown services, but Barclays noted that the practice of charging lower premiums to newer customers was common among AA and its peers.
Randgold Resources Ltd. (RRS) ended the session as the top riser on the premier index. Having fallen earlier in the day after the Democratic Republic of Congo’s state miner threatened to “assert its rights” in the Kibali mine after Randgold’s planned $6 billion takeover by Barrick Gold, the stock recovered after Randgold refuted the miner’s claim.
Insurers were among the worst performers on the bib board after RSA Insurance warned that weather claims would have an impact on UK profits. RSA Insurance Group (RSA) fell 59p to 575p. Direct Line Insurance Group (DLG) closed down 7p at 324p and Admiral Group (ADM) edged down 22p to £20.80.
WPP (WPP) dipped 22½p to £11.25 after The Wall Street Journal reported that US federal prosecutors had started investigating media-buying practices in the American advertising industry. Analysts at Liberum said: “The news will raise concerns over these companies again. Our view is that the [inquiry] is likely to focus specifically on the digital parts of media buying, and not the wider space, and especially around how rebates have been given. In the short term, it is likely to be another reason for investors to avoid the agency space.” Media buying is estimated to represent around 45% of WPP’s profits, Liberum said.
A negative screening from Barclays sent Spire Healthcare Group (SPI) to a record low. Despite a 40% slump in the year to date, Spire shares are still not cheap, according to Barclays. The broker’s downgrade to “underweight” came as part of a review of IFRS 16, new rules which mean that from January companies have to add lease obligations to their balance sheets.
Games Workshop Group (GAW) sank 165p lower, to £37.85, after Tom Kirby, the company’s former chairman, sold a 1.7% stake. The sale at £36.50 per share was at a 5.1% discount to Thursday’s closing price.
