Morning Financial Press Round-Up
Paul Kettle
AM Press Review -2 min read
07:20, 6th February 2019

Below are the key morning headlines from today’s papers, featuring the Financial Times, The Times, The Telegraph, The Daily Mail & more - see the full Press section here.

BP’s new projects help profits treble to $10bn. Higher oil prices and production from a string of lucrative new projects helped BP (BP.) FOLLOWto more than treble its profits to $10 billion last year. The oil major cheered investors with a significantly better fourth-quarter performance than had been expected, sending shares up 27¾p, or more than 5%, to 547p and the top of the FTSE 100 yesterday. Bob Dudley, chief executive, said that record 96 per cent reliability levels across its oil and gas-producing assets and the start-up of six large projects with higher profit margins had compounded the benefit of stronger commodity prices. BP sold oil for an average of $65 a barrel in 2018, up from $50 a barrel in 2017, as global markets rebounded. The company also enjoyed what it called its “best ever year” in its refining and marketing division.

Interserve nears debt-for-equity rescue to safeguard the stricken outsourcer. Stricken Interserve (IRV) FOLLOWis closing in on a debt-for-equity rescue deal with banks that would safeguard 45,000 jobs at the outsourcer after crunch talks with lenders and ministers. Government sources said the company, which runs key public services including cleaning schools, maintaining prisons and building major infrastructure projects, could announce a deal in the next few days. Whitehall is understood to back bankers taking a large stake in the company in return for writing off debts. The Government is desperate to avert what insiders refer to as “Carillion 2.0”, in reference to the dramatic collapse of Interserve’s fellow outsourcer last January.

GVC Holdings (GVC)FOLLOW – Ladbrokes staff told to sign gamblers to online accounts to avoid redundancy. Bookmaker to close 1,000 of its 3,500 shops with redundancies decided by ranking system. Bookmaker Ladbrokes Coral is telling shop staff to sign up as many gamblers as possible to online accounts if they want to avoid being among 5,000 employees it plans to make redundant, the Guardian has learned. According to letters circulated among employees – and seen by the Guardian – the bookmaker will close up to 1,000 of its 3,500 shops over the next 18 to 24 months, blaming imminent curbs on £100-per-spin fixed-odds betting terminals (FOBTs). Redundancies will be decided via a ranking system, with staff grouped by area and competing against each other on a range of criteria to escape the axe

Tobacco firms not paying fair share of UK corporation tax – report. Four largest companies dispute claim that they consistently pay less than headline rate. Global tobacco companies should be paying more UK corporation tax, according to a report that claims they are not contributing their fair share despite making massive profits. Academics at the University of Bath found that the four largest cigarette companies pay hundreds of millions of pounds in tax overseas but consistently pay less than the headline rate of UK corporation tax. The companies, which disputed the report’s findings, include Gauloises-maker Imperial Brands (IMB) FOLLOWand British American Tobacco (BATS),FOLLOW owner of Camel and Lucky Strike. According to the report, Imperial Brands, BAT and Gallaher, a subsidiary of Japan Tobacco International (JTI), made UK operating profits of more than £1bn between them in 2016 but paid £83.6m combined, a rate of less than 10%.

Another knock for the beleaguered drugs company Indivior (INDV)FOLLOW has sent its shares on a downward spiral. The company, which makes medication to treat heroin addiction, has been battling competitors producing cheaper versions of its Suboxone film drug. After a long-running court battle with rival Dr Reddy’s Laboratories, Indivior said its application to have the case reheard had been dismissed. Indivior wanted judges to overturn a previous court’s decision, which gave Dr Reddy’s permission to sell rival products in the US. Chief executive Shaun Thaxter said he was ‘disappointed’ but assured shareholders that the company was taking steps to reduce its dependence on its star drug.

Amino Technologies (AMO) FOLLOW, which creates technology to help TV watchers wirelessly connect other devices to their screen, has had a disappointing year. Revenue fell 7% in 2018 to £68.6million, while profit before tax dipped 26% to £8.6million. It didn’t give investors much more hope for the year ahead, as Amino said challenging conditions were likely to continue into 2019. It blamed foreign exchange headwinds and general uncertainty for its troubles

Corporate raider Edward Bramson demands a vote on his plans to grab a seat on the Barclays (BARC) FOLLOWboard. Edward Bramson will ask shareholders to make him a director at the lender’s annual meeting in May. The proposal, announced last night, will trigger a showdown with Barclays bosses that has been brewing for months. If the 68-year-old New Yorker wins the vote, he is likely to push for huge cutbacks at the prized investment bank. Bramson’s firm Sherborne Investors controls 5.51% of Barclays’ stock, giving him the right to table the vote but he needs the backing of many other shareholders to win a seat. He has criticised the investment arm’s performance but shed little light on what he would do.

Estate agent LSL Property Services (LSL) FOLLOWaxes 124 branches in shake up that is feared will mean some 500 job losses. The number of Your Move and Reeds Rains branches will fall from 404 to 280. Between two to six people are thought to work in each branch, meaning around 500 jobs could go.Forty-three sites will close and 40 or so will be franchised out. The operations of around 81 neighbouring branches will be closed or merged to create a network of bigger offices. LSL said these sites will be branded as either Your Move or Reeds Rains and will ‘generally have larger teams of dedicated experts in residential sales, lettings and financial services roles than the average Your Move and Reeds Rains branches have’. It fired the starting gun on the overhaul of its structure in the second half of 2017. Consultations with staff are expected to be completed by the summer.

British Gas to import supply from Mozambique in $25bn deal. Millions of British homes could soon be warmed by gas from Mozambique after the owner of British Gas clinched a $25bn (£19bn) deal to ship gas from a new project on the East African coast. Centrica (CNA) FOLLOWagreed to tap Mozambique’s giant gas reserves alongside Japan’s Tokyo Gas in a $25bn supply deal that will deliver gas to the UK, North America and the Far East. The pair will buy a total of 2.6m tonnes of super-cooled liquified natural gas (LNG) from Mozambique every year once US energy giant Anadarko begins production at Mozambique’s first gas export project. Iain Conn, Centrica’s chief executive, said the Mozambique deal would help it secure a a flexible LNG supply.

St Modwen eyes more warehouses after turning back on retail. Property developer St. Modwen Properties (SMP) FOLLOWis on the hunt for more small warehouses after switching its focus away from retail space to focus on logistics. St Modwen, which is best known for regenerating brownfield sites such as the New Covent Garden Market, sold off more than half its retail portfolio last year for a combined £177m as it retreated from the country’s ailing high streets. It also ramped up its pipeline of new warehouse developments to 1.5m, from 1m one year ago, in a bid to take advantage of the shift to online shopping. Warehouse development has rocketed in the past 18 months as investors hunt out returns in one of the few areas of the property market that is booming.

Glaxo agrees £3.2bn cancer therapy deal. Britain’s biggest pharmaceuticals company has agreed a tie-up with a German rival worth up to £3.2 billion as it seeks to accelerate its drug development programme. GlaxoSmithKline (GSK) FOLLOWhas struck a partnership to develop and commercialise a cancer treatment in clinical development at Merck, which the companies hope could treat multiple cancer types and may be used with other drugs. The deal is the latest as Glaxo seeks to boost research and development and revive its under-performing pharmaceuticals business. Oncology, a fiercely competitive area for global drugs companies, has been identified by Emma Walmsley, Glaxo’s chief executive, as a key area. Under Sir Andrew Witty, Ms Walmsley’s predecessor, Glaxo offloaded the bulk of its oncology business in an asset swap with Novartis, the Swiss company.

Graze provides tasty snack for Unilever. Unilever (ULVR) FOLLOWhas snapped up Graze, the healthy snacking brand, as it continues its “bolt-on” acquisition strategy focusing on fast-growing companies. The Anglo-Dutch consumer goods group group, which makes hundreds of products including Magnum ice cream, Lynx deodorant and Surf detergent, said that it had bought Graze as it was a “truly multichannel brand” that offered convenience and nutritional benefits while attracting millennial consumers. The price was undisclosed, but it is thought that the purchase was completed at less than £100 million, about a third of the £300 million asking price.

Value Act, the hedge fund, has increased its stake in Horizon Discovery Group (HZD) FOLLOWfrom 14.3% to 18.3%, after buying more shares from Neil Woodford, the renowned stockpicker. Value Act is now the largest shareholder in the company. It installed Margarita Krivitski on the board in November. Woodford Investment Management now has a 10.4% stake, down from 14.5%. The share-buying spree, which was revealed in a regulatory filing yesterday, led investors to wonder what Value Act knows about Horizon that the market doesn’t. The company builds cell models that harbour the genetics of human disease. The cells are used for a range of products and services, providing researchers and drug developers with insights that they need to develop medicines and cell and gene therapies. It is thought that Value Act has been attracted to Horizon’s CRISPR-based gene editing technology, which it acquired through the purchase of Dharmacon, an American biotechnology company, in 2017. It obtained a licence last month from Rutgers University in New Jersey to develop a gene-editing tool with the technology, with potential applications in cancer and genetic disease.

 

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