Morning Financial Press Review
Paul Kettle
AM Press Round-Up -3 min read
06:41, 16th May 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.

Babcock rebounds after latest attack. Babcock International Group (BAB) FOLLOW bounced back from early losses after rebutting “malicious” claims made in the latest attack on the defence contractor by a mysterious research group. The Boatman Capital Research claimed that Babcock needed to write down its Defence Support Group business after overvaluing its main contract by £50m, an impairment it said would be equivalent to 13% of its profit. The anonymous group made a first stinging attack on Babcock’s management last October with long-serving chairman Mike Turner stepping down months later amid mounting pressure from investors.

Europe’s biggest travel group has reported widening first-half losses amid Brexit uncertainty, the grounding of its Boeing 737 Max fleet and the lingering impact of last summer’s heatwave. TUI AG Reg Shs (DI) (TUI) FOLLOW, which owns First Choice Holidays and hotel brands including Sensatori, Blue and Sensimar, said that underlying seasonal losses increased from €170 million to €301 million even though turnover rose by 1.7% to €6.7 billion. The FTSE 100 group has issued two profit warnings this year, but despite yesterday’s losses it maintained its full-year guidance and insisted that it was on track to deliver “another solid year”. Fritz Joussen, 56, chief executive of Tui, dismissed suggestions that the industry was facing structural issues. “My view is that it’s down to cyclicality and we are currently in a downturn,” he said. “There will be winners and losers, and we will not be losers.”

Playtech hit by investor pay revolt. Playtech (PTEC) FOLLOW, the company that provides gambling software to some of the world’s biggest bookmakers, has been left bruised by investors, which revolted against executive pay at the company’s annual general meeting on Wednesday. Chairman Alan Jackson also received a substantial vote against his re-election despite the company announcing last month that a search for his replacement has started. More than 40% of shareholders voted against Playtech’s remuneration policy and report. Despite the substantial vote against pay, the ballot represented a swing from last year when a majority voted against executive pay.

Provident Financial (PFG) FOLLOW shareholders refuse to back takeover by Non-Standard Finance (NSF) FOLLOW. The subprime lender trying to buy its bigger rival Provident Financial for £1.1 billion will seek to force through a hostile takeover after failing in its three-month campaign to win over opposing shareholders. Non-Standard Finance, led by John van Kuffeler, already had the support of three big Provident investors with 50% of the company’s stock when it launched its all-share bid in February. It set a cut-off of 1pm yesterday for remaining investors to accept its offer. NSF disclosed after the deadline passed that few other shareholders had decided to back the bid and that it had secured the support of investors holding just 53.53% of Provident’s stock.

Aston Martin Holdings (AML) FOLLOW has reset its sat-nav for June 10 when, in an update on the DBX, its 4×4 family car, it hopes to put the brakes on a downhill run in the share price. After a first-quarter update in which an up-and-down sales story and spending on its new factory in south Wales to build the DBX pushed it into the red, its shares recovered this week. Short sellers got their claws into Aston after its £4.3 billion, £19.50-a-share float last October. Some investors did not buy the story of a doubling of production into the next decade at the same time as building a factory and embracing electric cars, so bet heavily on the stock falling. That forced the share price down by 30% within three weeks.

The slowdown on the high street has wiped nearly £700 million off the value of British Land Company (BLND) FOLLOW portfolio in a year. The FTSE 100 property company, whose assets include the Meadowhall shopping centre in Sheffield, said that its like-for-like portfolio valuation fell 4.8% to £12.3 billion in the 12 months to the end of March. The landlord’s full-year accounts reveal the increasingly negative investor sentiment towards retail property, which has suffered from a number of familiar high street retailers shutting shops or falling into administration. The value of department stores owned by British Land was slashed by more than 40% to £70 million. Shopping centre valuations were cut by almost 10% to £2.1 billion, while retail park valuations tumbled 13.2% to £2.6 billion. Overall its retail property valuation dropped by 11.1%, or £752 million, to £5.6 billion.

The boss of Lloyds Banking Group (LLOY) FOLLOW has been slammed by MPs over his lucrative pension payments ahead of the bank’s AGM today. A significant investor rebellion is now expected at the Edinburgh meeting. Antonio Horta-Osorio, 55, was accused of greed by senior MPs over a deal giving him £419,000 towards his retirement, equal to 33% of his annual salary – while staff get a maximum of 13%. Rachel Reeves MP, head of the business committee, said: ‘Investors should take the opportunity to hold pay committees to account and vote against remuneration which includes chief executive pay packages vastly outstripping those of the wider workforce.’

Scandal-stricken Yu Group (YU.) FOLLOW saw its stock soar 62.2% after it revealed the results of an accounting review. The firm, which supplies energy to small businesses, lost more than 80% of its value last year after admitting it had invoiced for more electricity than it sold. It said it now has measures in place to prevent such errors, and that revenue rose 77% last year to £80.6million. Chief executive Bobby Kalar issued a ‘personal apology’ to shareholders over the scandal.

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