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Afternoon Financial Press Update

13:25, 7th May 2019
Paul Kettle Kettle
PM Press
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Below are the key headlines from the midday updated papers, featuring the Financial Times, The Times, The Telegraph, The Daily Mail & more - see the full Press section here.

Purplebricks Group (PURP) FOLLOW ousts boss and U-turns on global ambitions. The UK’s best-known online estate agent Purplebricks shocked the City on Tuesday as it ousted its boss and revealed plans to slash the size of its international business. The AIM-listed firm said 45-year-old Michael Bruce, credited with turning Purplebricks into the biggest competitor to traditional High Street estate agents, will step down with immediate effect. In a remarkable retreat from ambitious international growth plans, the company also said it will exit the Australia market and review its US business.

Domino’s reports flat pizza sales. Rivals eat into chain’s sales as most-popular UK takeaway food starts to lose its edge. Domino’s Pizza Group (DOM) FOLLOW has reported a fall in UK orders and warned its international arm would remain loss-making this year. The pizza chain said its international business was no longer expected to break even this year , and sales across Germany, Norway, Sweden, Iceland, Switzerland and Liechtenstein down 2% to £25m in the 13 weeks to the end of March. Shares in the FTSE 250-listed company fell more than 7% in early trading, before recovering some of the losses to be down 3% in afternoon trading. The UK and Ireland, which accounts for 90% of sales, posted 4.8% sales growth to nearly £300m over the first quarter. In the UK alone, like-for-like sales grew 3.1% – but order volumes fell 2.7%. David Wild, the chief executive, said the fall in orders was down to high sales a year ago when it gave away a lot of pizzas on promotion. Excluding this effect, orders were flat.

Hiscox hit by higher number of property claims in Lloyd’s market. Hiscox Limited (DI) (HSX) FOLLOW today revealed a rise in the number of property insurance losses in the Lloyd’s market, including a $10 million (£7.6 million) claim on a luxury log cabin. The Lloyd’s of London insurer said there was a higher number of losses on the book for the first quarter of the year, including damage to the cabin – located in Canada – and the impact of the California wild fires. The fires, the worst on record, killed 98 people and led to $3.5 billion damage when they ripped through the US state last November. Rates in the London market were up 4%, bouncing back from several years of sluggish growth because of a flood of capital chasing premiums and a lack of large claims.

G4S shares dive as Garda backs out of takeover. G4S (GFS) FOLLOW shares tumbled more than 8% today after Canada’s Garda World walked away from a possible bid for the security giant. In April Garda was forced into admitting it was pondering a bid after the Standard revealed its intentions — sending shares rocketing 20%. It wasn’t clear then whether Garda was looking at an offer for all or just part of the company, which has been plagued by controversy. G4S has earned a reputation for losing prisoners on the way to court and this year reported a 63% drop in profits, leaving it potentially vulnerable to a bid. This weekend Garda said it had decided against a deal. G4S in turn said it had received no proposal from Garda and would continue its review of the cash solutions business, which moves money to and from banks, shops and cash machines. Selling that would leave it free to concentrate on its security arm.

Vodafone Group (VOD)FOLLOW  has agreed to sell access to its German broadband network to rival Telefonica in a bid to have its acquisition of Liberty Global’s cable business in Germany and Eastern Europe approved. The telecoms giant said Telefonica Deutschland will be able to offer super-fast broadband using Vodafone and Liberty’s Unitymedia cable networks in Germany if its Liberty deal is approved. Vodafone last year inked a £16billion deal with Liberty Global, the American owner of Virgin Media, to buy its European cable assets in Germany, Czech Republic, Hungary and Romania. To fund the deal, Vodafone recently raised £3.4billion for the takeover through convertible bonds that will convert into shares from 2021. German rival Deutsche Telekom has opposed Vodafone’s tie-up with Liberty. And the European Commission opened a full-scale probe into the deal in December amid competition concerns, which is expected to conclude in the next months.

Lufthansa interested in Thomas Cook’s Condor airline. Shares in Thomas Cook Group (TCG) FOLLOW took off this morning after Lufthansa said that it would make bid for Condor, the travel group’s German airline. The cash-strapped company put the airline business up for sale in February after a string of profit warnings. Carten Spohr, chief executive of Lufthansa, Germany’s largest airline, said that the company had decided “to bid for all of Condor with the option to be able to extend this [bid] to all Thomas Cook airlines”. Thomas Cook shares, which have collapsed by more than 80% in a year, were trading 11%, or 2.4p, higher at 24.08p by mid-morning.

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