Mortgage approvals and credit card borrowing fall amid uncertainty. Mortgage approvals dropped to an eight-month low amid falling household confidence and heightened uncertainty in December as consumer credit grew at its slowest pace since 2014, according to the Bank of England. Britain’s annual rate of consumer credit, which includes credit cards, overdrafts and car finance schemes, slowed to 6.6% last month, well below the 10.9% peak in November 2016. Consumers borrowed £700 million, up from £1 billion in November but less than the £1.2 billion summer peak borrowed in August and the previous six-month average of £1 billion. Only £100 million was loaded on to credit cards in December, down from £300 million in November, while £600 million was borrowed in other loans, representing no change on the previous month.
Co-op plans expansion of food shops and funeral homes. Central England Co-operative has announced plans to open new food stores and funeral homes and revamp dozens more as it ramps up its ambitious expansion plans this year. The Co-op said that it would open more than ten new food stores and funeral homes with sites already located in Stafford, Lichfield, Nottingham, Norfolk, Suffolk, Leicestershire, Cambridgeshire and Derbyshire. It said that several other stores and homes across a wide range of towns and cities, including in Northamptonshire and the West Midlands, would be given significant makeovers. Martyn Cheatle, chief executive of Central England Co-op, said: “We are really proud of the success of our business, especially with our continued good performance in what is a highly competitive and increasingly uncertain trading environment. We want to continue with that success and this is why we are committed to an ambitious growth and investment strategy during the next 12 months.”
Treasury had ‘control over RBS division’. Developer sues scandal-hit bank unit for £100m. The government had “day-to-day” involvement and “strategic” control over the treatment of companies in the hands of Royal Bank of Scotland’s scandal-hit restructuring division, according to allegations in a legal claim against the bank. Court papers reveal that Oliver Morley, a wealthy property developer who is suing Royal Bank of Scotland Group (RBS), is also considering taking legal action against the Treasury over its alleged role in influencing the aggressive tactics employed against businesses by the bank’s Global Restructuring Group (GRG). Mr Morley claims that GRG placed him under “economic duress” which resulted in the acquisition of some of his assets by the bank’s property division, West Register, in 2010. Documents that have come to light in the £100 million High Court action suggest that the government’s now disbanded Asset Protection Agency, which insured RBS’s toxic loans, played a key role.
Little Chef rescuer in mix to buy Patisserie Holdings (CAKE) leftovers. The private equity firm that rescued Little Chef from collapse is among the front runners in the race to acquire most of the remaining Patisserie Valerie business from administration. Rcapital, a turnaround specialist, is one of a small number of suitors vying to buy the 122 cafés that continue to trade after the appointment of KPMG to handle the administration of the chain’s parent company, Patisserie Holdings. The list of potential buyers is also thought to include Endless, another private equity firm that specialises in acquiring distressed assets. It has so far declined to comment. Chris Campbell, investment director at Rcapital, said: “We don’t comment on the details of possible investments. However, I am able to confirm that we have been speaking with KPMG in their capacity as administrators as well as a number of the landlords regarding a possible rescue.”
Crest Nicholson forced to halt building project. Crest Nicholson Holdings (CRST) has put a £400 million housing development in Hove on hold because of uncertainty around Brexit. The proposed project includes 560 homes and a redevelopment of the King Alfred leisure centre overlooking the seafront on Kingsway. It is one of the biggest housing projects in the UK to have been stalled because of Brexit. Patrick Bergin, chief executive of Crest Nicholson, said: “It would be imprudent of us to make a commitment on a scheme of that type when we’ve got limited visibility on future pricing.” However, he added that the company would commit to the project if an “orderly Brexit deal” with a “known exit strategy” was put in place. Brighton and Hove Council appointed Crest Nicholson, in partnership with Starr Trust, a local charity, as the preferred bidder to bring forward the project in 2016. The developer subsequently secured a commitment from the council for £8 million towards the sports centre and a £15.2 million grant from the government’s housing infrastructure project. The council has now given the developer a deadline of March 30 to sign its final development agreement, or face losing the project.
Royal Mail warning letter spooks investors. Investors deserted Royal Mail (RMG) yesterday after the postal network admitted that its profits would not be as high as hoped, with the volume of letters Britain is sending falling by more than expected. The company blamed the decline in letters on the slow death of the Christmas card and the business world’s anxiety about sending out junk mail that could breach privacy laws under the European General Data Protection Regulation (GDPR). The number of letters that Royal Mail delivered in the nine months to December 23 fell 8%, a far faster decline than the long-term average of 4% to 6%. In a trading update yesterday, Royal Mail narrowed its operating profit forecasts to between £500 million and £530 million for the year to the end of March. Only ten weeks ago, just before the vital festive trading period, Royal Mail was hoping that profits would be as high as £550 million.
Boardroom coup at Angus Energy gives Lord Lucan control. The eighth Earl of Lucan has seized control of a small listed oil explorer after a boardroom putsch. George Bingham was named yesterday as interim managing director of Angus Energy (ANGS), a £30 million Aim-quoted minnow looking for oil in the home counties. The 51-year-old replaces Paul Vonk, who has been ousted after a coup thought to have been orchestrated by Jonathan Tidswell-Pretorius, its former chairman, and David Lenigas, a prominent Aim energy investor. Lord Lucan became the eighth earl after fighting a court battle to inherit the title from his father, who vanished after the murder of the family’s nanny, Sandra Rivett, in 1974. Despite a lengthy police investigation and hundreds of purported sightings, he has never been found.
Hargreaves suffers as clients lose appetite. Hargreaves Lansdown (HL.) has posted faltering client inflows after falling share markets and Brexit uncertainty blunted investor appetites and slowed fee income growth in the second half of last year. Britain’s biggest fund supermarket gained an additional 45,000 customers and £2.53 billion of client assets in the six months to the end of December, but this was down on the 61,000 and £3.34 billion achieved in that period in 2017. Shares in Hargreaves slid by 6.3% to £16.84½, making it the worst performer in the FTSE 100, as it revealed that falling markets had reduced total assets under administration by 6%, to £85.9 billion. Chris Hill, chief executive, said that according to the firm’s own survey, investor confidence was at its lowest level since at least 1995.
Largest UK gas find in decade fuels optimism for North Sea. The discovery of the largest new North Sea gasfield in more than a decade has been hailed as a sign of the potential that still remains in the ageing basin. The Glengorm prospect in the central North Sea, about 120 miles east of Aberdeen, is estimated to contain gas and condensate volumes equivalent to about 250 million barrels of oil. It was drilled by a trio of international companies — the China National Offshore Oil Corporation (Cnooc), Total of France and Edison E&P of Italy. Glengorm is the largest UK gas find since Culzean in 2008, and the 11th biggest discovery of any kind in UK waters for 30 years, according to analysts from Wood Mackenzie, the energy consultancy. The North Sea oil and gas industry began in earnest in the early 1970s and production peaked about the turn of the millennium, before going into decline as old fields became exhausted.
Vet chain CVS struggles to keep costs on leash. One of Britain’s biggest veterinary companies has issued a profit warning, sending shares down by more than a third and triggering speculation that it was vulnerable to a predatory takeover. CVS Group (CVSG) said that a shortage of vets had led to above-inflation salary rises and left the company reliant on contractor cover, pushing up costs and hitting profits. The company is quoted on the London Stock Exchange’s junior Alternative Investment Market. It owns more than 500 veterinary surgeries and has been expanding by buying up practices and driving sales. It also operates four laboratories which perform diagnostic services for the veterinary industry, has seven pet crematoria and operates Animed Direct, the online medicines and animal products business. It has sought to expand overseas in the past two years by acquiring 24 practices in the Netherlands and has diversified into farm and equine practices. CVS said yesterday, however, that the early performance from the new businesses had been “disappointing, with financial results falling short of expectations.
Greene King brews up plan to support former offenders. One of Britain’s biggest brewers and pub operators will announce plans today to double the number of apprentices to 20,000 and launch an employment programme for ex-offenders as part of a commitment to improve social mobility. At an event in parliament backed by Damian Hinds, the education secretary, Greene King (GNK) will launch a report outlining its ambitions and calling on wider industry to give people of all backgrounds the chance to pursue a career. The company lists five ambitions: to increase apprenticeships from 11,000 to 20,000 by 2022; to work with prisons in London and the North West to support ex-offenders; to become a signatory to Business in the Community’s Race at Work Charter; to increase promotions to pub manager; and to extend its partnership with The Prince’s Trust.
Domino’s knocks down feud theory. The boss of Domino’s Pizza Group (DOM) said that the ambitions of some big franchisees “could be counterproductive” but dismissed talk of a feud with partners as “nonsense”. David Wild, chief executive, said that “a degree of tension” was normal. The culture at Britain’s biggest pizza delivery operator has come under scrutiny since three chief financial officers left in little more than three years. Many franchisees are said to believe that the financial pain caused by rising food and business costs is not being shared equitably.
Miners helped to lift the stock market yesterday as analysts forecast that China’s stimulus measures will lead to higher demand and prices for metals by the second half of the year. The sector has been unloved amid worries about an economic slowdown in China as its trade war with America continues to be unresolved. However, a weaker dollar in the past week has supported commodities prices and lifted mining stocks. Jefferies said its analysis of Chinese stimulus measures found there should be a stronger recovery in demand for metals in the second half of the year than it had anticipated. Iron ore miners are expected to outperform in the near term, after the tragic mining disaster at Vale’s Córrego do Feijão iron ore complex in Brazil last week increased iron ore price forecasts due to the loss of production. Jefferies said that it would shift its preference to copper miners as the year progresses, because it expected the copper price to recover due to a lack of supply growth and improving demand. Rio Tinto (RIO), the iron ore miner, rose 133p to £40.77½; Ferrexpo (FXPO), another iron ore miner, added 9½p to 218¾p; Hochschild Mining (HOC), the silver and gold miner, advanced 9¾p to 177¾p.
UDG Healthcare Public Limited Company (UDG) the FTSE 250 group which offers services to healthcare companies from sales and marketing to drug distribution and packaging, climbed 36p to 594½p, after reporting a “good start” to the year. In a trading update, the company said its profit before tax for the most recent quarter was “well ahead of the same quarter last year” on the back of gains from its recent acquisitions and growth across its businesses.
Bets on a rise in sterling if more clarity were achieved around Brexit boosted domestic-earning stocks. Hammerson (HMSO), the UK shopping centre owner with limited overseas exposure, climbed by 12¾p to 374p. Intu Properties (INTU), another UK shopping centre owner, gained 4½p to 117¼p.
Smith (DS) (SMDS), the maker of cardboard boxes, gained 15½p to 334½p after JP Morgan Cazenove reinstated its “overweight” rating on the stock after the completion of its €1.8 billion acquisition of the rival Europac.
Tycoon wages war on Chinatown. The owner of Chinatown in the West End of London faces renewed pressure from its biggest shareholder, who claims that the company is trying to dilute his holding. Samuel Tak Lee, the Hong Kong billionaire who owns 26% of Shaftesbury (SHB), has called on shareholders to join him at the group’s annual general meeting next month in voting against resolutions allowing the company’s board to issue new shares. Mr Lee has previously complained about a December 2017 share placing that raised £265 million. Shaftesbury is one of the biggest owners of property in the West End. Mr Lee owns the neighbouring Langham estate. If his shareholding reaches 30%, he will have to table an offer for the company. In a statement, Mr Lee said: “I firmly believe that the [December 2017] placing was motivated by a desire to dilute my interest in Shaftesbury.” Shaftesbury said Mr Lee’s statement was “not true”. It said Mr Lee was invited to participate in the placing and he received an allocation of 98.4% of the shares for which he applied.
Tempus – Johnson Matthey (JMAT): Buy. It is the clear leader in its field and at the front of the pack in new markets
Tempus – HICL Infrastructure Company Ltd (HICL): Hold. Stable dividend payer but political risks remain
