BP’s retiring chief executive has accused campaigners and politicians of oversimplifying the climate change crisis, arguing that natural gas should be a bridge between fossil fuels and renewables. Bob Dudley said it was “hard to find people who understand the complexity of the energy system” and warned the world would “not even come close” to replacing fossil fuels with renewables in the next two decades. Dudley’s comments to The Sunday Times follow a year of increasing pressure on energy giants and their investors over climate change. BP (BP.), which produces the equivalent of 3.7m barrels of oil and gas a day and is directly or indirectly responsible for 491m tons of annual carbon emissions — more than the entire UK — has been targeted by Extinction Rebellion protesters and dropped as a sponsor by the Royal Shakespeare Company (RSC) and National Galleries Scotland. BP’s forecasts suggest that if the world continues to tackle climate change at its current pace, oil, gas and coal will still account for 73% of energy consumed in 2040. Even under a “rapid transition”, along the lines of the Paris Agreement, they will account for an estimated 56%.
The boss of conglomerate Smiths Group (SMIN) is likely to step down next year after the demerger of its £2bn medical business. Andy Reynolds Smith, chief executive since 2015, has been under pressure from investors since he was forced to abandon a merger of Smiths Medical, which makes devices such as catheters, with American rival ICU Medical. The Smiths board was uncomfortable with the terms of the deal, which would have seen ICU pay in shares. Since Smiths pulled out in September last year, ICU’s stock has tumbled by more than a third. In March, Smiths, which also makes airport scanners and industrial equipment, said it would spin off the medical business into a separate listing. The division’s performance has been deteriorating: sales rose 1% to £874m last year but operating profits fell 6% to £147m, which Smiths blamed on regulatory costs and “inefficiencies”.
The Schroders (SDR) dynasty are this year’s biggest winners on the London stock market, having chalked up gains at a rate of more than £4m a day. By Christmas Eve, the Schroder family’s stake in the eponymous fund manager had grown to £3.9bn — up almost £1.5bn after a strong year for the FTSE 100 which gilded the fortunes of many of Britain’s wealthiest individuals and families. Analysts at Argus Vickers provided The Sunday Times with details of all London-listed shareholdings worth more than £10m. The analysis showed that easyJet (EZJ) founder Sir Stelios Haji-Ioannou is another of 2019’s winners. His family’s shares in the budget airline are now worth £1.28bn — up by £289.7m over the year. Amid gloom on the high street, one of this year’s surprising successes has been the share price of Dunelm Group (DNLM). Members of the Adderley family, who own more than half the retailer, have seen the value of their stake increase by more than £537m. Meanwhile, the shares owned by Boohoo.com (BOO)-founder Mahmud Kamani and his family in the fast-fashion brand have risen by £434.1m. Ivan Glasenberg, the chief executive of Glencore (GLEN), has seen the value of his stake in the commodities giant plunge by £663m. Two other Glencore investors, Daniel Maté and Telis Mistakidis, are sitting on losses of £248.4m and £246.2m respectively. Roman Abramovich’s stake in Evraz (EVR) is down more than £458.6m. The London-listed steel giant has been hit by the slowing global economy and the US-China trade war. Ray Kelvin’s stake in Ted Baker (TED) is now worth less than £65m — down from £225.4m a year ago. The tycoon resigned in March amid disputed claims of “forced hugging”.
Stock Spirits Group (STCK) handed its boss a £200,000 package so he could move from Poland to Britain — even though most of its products are sold in eastern Europe. The company’s annual report revealed the arrangement with Mirek Stachowicz, who relocated in August to “focus on the group’s strategy, which includes M&A”. He will be reimbursed for school fees, rent and other expenses for two years, capped at £200,000 a year. News of the relocation package comes as an activist investor is pressing for a special dividend. Western Gate, which represents the family office of Portuguese cash-and-carry tycoon Luis Amaral and is Stock Spirits’ second-biggest shareholder, claims the company offers the lowest cash return among its peers, with a dividend payout of 60.5% against an average of 71.3%.
AstraZeneca (AZN) has been riding high for the past year as one after another of its most promising drugs has won approval from the world’s medicine regulators. Cancer treatments such as Tagrisso, Calquence and Lynparza won the approval of America’s Food & Drug Administration. Chief executive Pascal Soriot has been applauded for returning the Cambridge-based drugs giant to a leading position. Sales were once dominated by maturing blockbusters such as Crestor, Symbicort and Nexium, but are spread across cancer and cardiovascular drugs. Now these drugs are on the market, they are at the mercy of external winds such as China’s drug reforms and pricing pressure in America, where there is greater discipline on budgets. Analysts at UBS point to slowing prescriptions for Tagrisso in America and warn that Lynparza will face stiff competition next year. Astra’s top drug, Tagrisso, is on track to reach sales of $5.9bn by 2023, provided the healthcare payers continue to pay up. Soriot still has a challenge ahead. Hold.
