Shell veteran Ruth Cairnie tipped to replace Mike Turner as head of Babcock board. Defence giant Babcock International Group (BAB) is lining up a former oil executive as its first chairwoman. The FTSE 250 repairer of submarines, warships and tanks has identified Ruth Cairnie as the preferred successor to outgoing £330,000-a-year chairman Mike Turner. Cairnie, 65, has been a non-executive director at jet engine giant Rolls-Royce since 2014 and spent the bulk of her career at Shell, where she worked on strategy and planning, and ran its fuel sales business. She is also senior independent director at Primark owner Associated British Foods. The imminent appointment was first reported by Sky News.
Intu finds new boss at builders’ merchant Travis Perkins. The debt-laden owner of Manchester’s Trafford Centre is pinning its hopes for a turnaround on a former chief operating officer of the builders’ merchant Travis Perkins. Tony Buffin is understood to be Intu Properties (INTU) preferred candidate to succeed David Fischel as chief executive. With little experience of buying or managing shopping centres, Buffin is a left-field choice to spearhead a revival of the troubled owner of sites that include Lakeside in Essex. The priority for Intu’s new chief executive will be to cut the property giant’s £4.9bn debt pile, a concern for investors after a 13.3% slide in the value of Intu’s shopping centres last year. The company is considering selling stakes in its three Spanish malls to bring in up to £630m, and is in exclusive talks to dispose of a 50% stake in its Derby shopping centre.
A £2.6bn standoff over pensions threatens to derail a string of train franchises, in the latest blow to the transport secretary Chris Grayling. Plans to award long-term contracts to run the Southeastern, East Midlands and West Coast routes have been thrown into disarray by demands from the pensions watchdog that operators plug deficits in schemes. Some bidders, including the listed transport operator Stagecoach, are understood to have refused to take on the extra pension liabilities, saying they cannot afford to shoulder risks that previously lay with the state. That has led to an impasse. Operators argue the demands could cost them more than £2.6bn. Ministers had been due to announce several weeks ago the winner of a competition to run the Southeastern route between London and Kent. Stagecoach Group (SGC) has teamed up with Alstom and is vying with two other bids: a tie-up between Abellio, East Japan Railway and Mitsui; and another from Govia. Stagecoach’s bid for Southeastern is believed to have been “non-compliant” because it failed to take on the pensions liabilities demanded by the watchdog.
Barclays alerts Fed over Edward Bramson stake. Barclays (BARC) has alerted the US Federal Reserve and the Bank of England over activist investor Edward Bramson’s bid for a seat on the board, raising concerns over the way his shareholding is funded. Sources said Barclays had sounded an alarm over the structure of Bramson’s stake in it, which allows him to invest in the company while being protected from losses if the shares fall below a certain level. Analysts estimate Bramson could trigger protection through hedging if the share price drops below £1.60. Bramson’s stake is part-funded by Bank of America. The complicated deal gives Bramson a 5.5% stake in Barclays, making him a top 10 shareholder powerful enough to jostle for a seat on the board. Shareholders will vote on the idea at the annual meeting in May. One source said: “He [Bramson] cannot have the same alignment of interest as long-term shareholders. And the other issue is Bank of America, a US investment bank, is funding an activist to take down a competitor British investment bank.”
Indonesia row topples Churchill Mining. A troubled mining company is on the brink of administration after losing a long-running dispute with Indonesia over one of the world’s largest coal reserves. Churchill Mining (CHL) has put the advisory firm RSM on standby after filing a notice of its intention to appoint administrators at court. The final stage of Churchill’s battle with Indonesia was thrown out earlier this month by the International Centre for Settlement of Investment Disputes (ICSID), which ordered it to pay costs of almost $10m (7.6m). Churchill joined the AIM junior market in 2005, hoping to develop the East Kutai thermal coal mine in Kalimantan, Indonesia, which is thought to contain up to 2.7bn tons.
Builder MJ Gleeson, led by Jolyon Harrison, to sell land trading operation. MJ Gleeson (GLE) has put its lucrative land trading business up for sale in a move that could bring in more than £130m. Sheffield-based Gleeson specialises in building cheap homes in the north of England — properties that it says people earning £18,000 a year can afford. It also has a division, Gleeson Strategic Land, that buys land in the south and sells it on to bigger developers after securing planning permission. City sources said the cash from any sale of Gleeson Strategic Land could be used to boost its housebuilding output. Chief executive Jolyon Harrison, 71, has prioritised growing the housebuilding side of the business, with a target of doubling output to 2,000 homes a year by 2022.
New BT boss Philip Jansen speeds up office closures. The new chief executive of BT Group (BT.A) is accelerating plans to close nearly half its regional offices as he seeks to modernise the former telecoms monopoly. Philip Jansen wants BT to shut 20 of its 50 British offices within three to five years, instead of the five years outlined last May. The overhaul would shift the company towards 30 “modern strategic sites” and lead to the closure of its central London headquarters near St Paul’s Cathedral. The closures come as Jansen considers whether to make deeper cuts to BT’s workforce by slashing it from 106,000 globally to 75,000.
Joules launches hunt for new chief to succeed Colin Porter. The board of Joules Group (JOUL) is hunting for a new chief executive as Colin Porter calls time on his successful spell at the upmarket fashion chain. Joules is understood to have enlisted the headhunter Russell Reynolds to find a successor for Porter, who has led the business since 2015, before it floated. A source close to the process said Porter, 57, planned to retire from executive life, although he may remain in post for another year.
Allied Minds, led by Jill Smith, under siege by investor Crystal Amber. The activist fund Crystal Amber has accused Allied Minds (ALM), the tech incubator backed by Neil Woodford, of wasting investors’ money on high executive pay. Crystal Amber also hit out at a bonus scheme that handed chief executive Jill Smith $1.3m (£1m) in 2017. “The notion that staff will earn 10% on any winners while all losers are ignored is farcical,” said fund manager Richard Bernstein, who has built a 3% stake.
Video games makers have to spend big on manpower. Grand Theft Auto creator Rockstar Games is a case in point: the company employed more than 3,000 people to make the Wild West epic Red Dead Redemption 2, which sold 17m copies in eight days after release. Keywords Studios (KWS) wants to exploit that trend. The Dublin-based company is the largest provider of third-party services to the gaming industry, from visual effects to games testing. Keywords is convinced that as games become more complex, developers will have to outsource more work so they can scale up quickly and release games on time. Berenberg analyst Edward James thinks doubts over Keywords are “ill-founded” and says big developers have shown little sign of easing investment in new titles. Outsourcing could even grow faster than the video games sector as a whole, according to Liberum analyst Alexandre Schmidt, with the likes of Keywords snaffling market share by cross-selling services. Google announced this month that it would break into the £100bn global computer games industry by launching the Stadia streaming service. The American tech giant expects big things from “cloud gaming”, where players stream games from Google’s vast data centres. The move could trouble console makers such as Sony and Microsoft. For those down the food chain, it’s a big opportunity. With Amazon also preparing a push into cloud gaming, Keywords looks like a solid long-term bet. Buy.
