Afternoon Press Round-Up
Paul Kettle
PM Financial Press Review
15:05, 9th November 2018

Summer surge fades as Brexit chill threatens UK economy. The nation’s economic momentum is spluttering despite the strongest growth for two years, worrying official figures showed on Friday. The economy managed 0.6% growth between July and September, the best since the end of 2016, as household spending was boosted by the summer heatwave and the World Cup in the early part of the quarter. But monthly figures showed growth flat-lining in August and September as the warm weather boost faded. The key services sector, accounting for more than three quarters of overall growth, also shrank in September as retailers struggled and car sales fell. “The economy saw a strong summer, although longer-term economic growth remained subdued,” the Office for National Statistics’ Rob Kent-Smith said.

Unilever mulls $1bn bid for toothpaste maker Weimeizi. Consumer goods behemoth Unilever (ULVR) is considering a $1 billion (£770 million) bid for Chinese dental firm Weimeizi, it emerged on Friday. Other bidders include US toothpaste-maker Colgate-Palmolive and Church & Dwight, the South China Morning Post said. Each suitor has a presence in China and a City source said the move shows that the country remains attractive to consumer goods firms despite its trade war with Donald Trump’s America. Guangzhou-headquartered Weimeizi, backed by Asian venture capital firms, makes toothpaste and toothbrushes under the Saky brand. Citigroup is advising on a sale.

Embattled high street retailers call for help as closures soar. Pubs, fashion outlets and estate agents prominent among 24,205 closures recorded in the first six months of this yearRetailers have called for “decisive action” from the government to support the UK’s battered high streets after new data showed the number of shops, pubs and restaurants lying empty has soared by more than 4,400 in the first six months of this year. Closures increased by nearly 17% to 24,205 across 3,000 towns, cities, retail parks and shopping centres monitored by the Local Data Company. The number of new openings of shops, restaurants, pubs and other leisure destinations declined by 2.1% to 19,803 over the half year – leaving 4,402 more gaps on the high street. That total is more than double the number ever previously recorded over the first six months of a year since LDC began its research five years ago.

High Streets in London ‘are worst hit for closures’. London’s High Streets have been plagued by more closures than anywhere else in the country, as the number of empty shops, pubs and restaurants soared. A net 268 stores vanished from the capital in the first six months of the year, industry figures showed on Friday. That’s a five-year high. Central London was the worst hit, with 163 units disappearing, followed by Kingston-upon-Thames and Romford. Pubs and inns have seen the largest decline, accountant PwC and the Local Data Company said. About 14 shops are closing every day, hurt by customers shopping more online and eating in. The biggest casualties this year include the collapse of electrical goods seller Maplin as well as restaurant chains Jamie’s Italian and Prezzo which have shut stores.

Merger of SSE and npower is hanging in the balance. Companies admit tie-up is threatened by government’s price cap and market conditions. The merger of two of the UK’s biggest energy firms is hanging in the balance after npower and SSE (SSE) said they would have to reconsider the terms of the deal because of the government’s price cap and tough market conditions. Late on Thursday the companies admitted the merger was unlikely to complete at the start of 2019 as planned, due to the new considerations. Innogy SE, the German owner of npower, said the parent companies may have to inject more cash into the planned new merged energy giant, which would be almost as big as market leader British Gas if it goes ahead. UK-listed SSE blamed the impact of the government’s price cap on default tariffs and the challenge of securing an “appropriate credit rating” for the new energy supplier

Sir Martin Sorrell is back with a vengeance. Within months of being booted from his advertising giant WPP over cringeworthy allegations not fit for a family newspaper, he has snapped up one forward-looking agency and is now poised to buy another. The first was MediaMonks, a company making online ads for the likes of Adidas, Netflix and Shell. That deal set up Sorrell’s new company, S4 Capital (SFOR), as a rival to WPP’s creative agencies. Now he’s hunting for what’s known as programmatic ad companies. These replace with algorithms the human beings who buy advertising space. How? When content — a news story, say — is loaded up onto a website, reams of data about the kind of people likely to view it are sent to an online marketplace. Potential advertisers can assess how likely those folks are to be potential customers, then bid to place an ad.

M&S to air low-key Christmas ad in attempt to drive sales. Cinematic ad ditched in favour of Holly Willoughby, Keith Lemon and focus on low prices. Marks & Spencer Group (MKS) has eschewed a John Lewis-style blockbuster Christmas ad in favour of a TV and social media campaign starring Celebrity Juice duo Holly Willoughby and Keith Lemon with a sharper focus on its products and prices. Last year the struggling retailer’s ads featured Paddington, but while the ad attracted nearly 7m views on YouTube alone, its Christmas sales were a washout. So instead of blowing this year’s marketing budget on a cinematic ad, M&S has decided to spend the cash on airing it. Nathan Ansell, its director of marketing for clothing and home, said customers would see the ad 10 times as often as last year’s: “It’s a more efficient use of our spend. CGI [computer-generated imagery] is quite expensive. The world’s moved on [from blockbuster Christmas ads]  … The most important thing is people remember the product and come out and shop.”

MySQUAR’s missing cash and forced redundancies puts spotlight on AIM governance. App developer MySquar Limited (DI) (MYSQ)was teetering on the brink of collapse today after the company confirmed nearly £1 million had gone missing in the latest blow to the AIM’s reputation. Following an internal investigation AIM-listed MySQUAR said £900,000 was paid out of company funds to either third parties or former directors without board approval. The group, which includes recently-acquired MyPay Myanmar, has had to make staff redundant to conserve cash as it scrambles to find funds. MySQUAR said: “Trading continues but the ongoing viability of these businesses depends upon urgent external funding to meet working capital requirements.”

AO World (AO.) has struck a ‘game-changer’ multi-million pound deal to acquire online phone retailer Mobile Phones Direct to boost its mobile supply offering before the introduction of the 5G network. The electrical goods giant, whose mobile offering is currently limited to handsets only, agreed to pay £32.5million to acquire the company. Mobile Phones Direct generated a revenue of £121.7million in revenue during the 12 months up to March 31 as well as underlying earnings of £5.5million

 

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