Morning Financial Press Review
Paul Kettle
AM Press Round-Up -3 min read
06:06, 12th July 2019

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

Marks & Spencer Group (MKS) FOLLOW has ousted its clothing boss after she failed to get a grip on the biggest job in high street fashion. The departure of Jill McDonald was confirmed on Thursday and followed recent criticism of the performance of the retailer’s clothing ranges by M&S’s overall boss, Steve Rowe. He revealed that buying errors on her watch meant that at times key products such as jeans had sold out, resulting in the poorest stock levels “I have ever seen in my life”. McDonald’s appointment in October 2017 had raised eyebrows in the first place because the high-profile businesswoman had no experience of the fashion industry. M&S is thought to have paid her a seven-figure signing-on fee in cash and shares as part of the move from the cycle and car parts specialist Halfords, where she had to leave behind £1.7m in bonuses when she jumped ship. The company declined to say whether the 55-year-old was receiving a payoff.

Reckitt Benckiser Group (RB.)FOLLOW  said it will pay $1.4billion (£1billion) to settle US federal investigations into Suboxone, an opioid addiction drug made by its former subsidiary Indivior. Indivior (INDV)FOLLOW , which was fully spun out as a separate company from Reckitt in 2014, was accused of wrongly marketing a new version of Suboxone, a drug used by people with heroin addiction, as having a lower risk of being abused. But prosecutors said Indivior knew the film form of the drug could potentially be more dangerous than other drugs, but still marketed it that way for nearly ten years – between 2006 and 2015. Indivior was indicted, and if found guilty it could be liable to pay as much as $3billion (£2.4billion). But despite the investigations, Soboxone Film has continued to sell well and better than the company had expected in the first half, helping it to lift its outlook for the year. In a trading update also issued today, Indivior said it now expects net revenue to be in the range of $670million to $720million, up from previous guidance of $525million to $575million.

BAE Systems (BA.) FOLLOW is positioning to sell its Type 26 frigate to New Zealand, making it the third export customer for the advanced warship. The defence business has agreed a £3.7bn contract to produce three of the advanced ships for the Royal Navy, and the British government has said it wants eight of the ships in total, with the first batch already under construction in Glasgow. Last summer Australia signed up for eight of the ships based on the design which will built by BAE in Adelaide. The deal is estimated to be worth £20bn to BAE over its lifetime. Earlier this year Canada confirmed it had licensed the Type 26 design which will be used as the basis for 15 new ships which will be built by Irving in Halifax. The licence agreement is thought to be worth several hundred million and is set to rise as work progresses on how BAE will support Canadian prime contractor Irving with construction work.

North Sea oil and gas firm Hurricane Energy (HUR) FOLLOW reassured investors by upgrading its production forecasts from next year. It expects to pump out as much as 20,000 barrels of oil per day at its Lancaster well from 2020, up from previous guidance of 17,000. Earlier this month Hurricane bosses chose to plug and abandon its Warwick Deep well, because it was not producing enough to be profitable.

The chief executive of Land Securities Group (LAND) FOLLOW has resigned after eight years. Rob Noel will leave Landsec next year after his successor is appointed, handing over the management of a £13.8 billion portfolio that includes the £4 billion Nova regeneration project in Victoria and the Bluewater shopping centre in Kent. Mr Noel, 55, who earned £1.6 million last year, said that he was ready for a break after working “flat out” in the property industry for 33 years. He took over from Francis Salway as chief executive of the FTSE 100 company in 2012, having built a reputation as a tough-talking manager with a good read on the market. During his tenure he has sold £8 billion of assets and reinvested £8 billion in new developments, overseeing projects including the Walkie Talkie skyscraper in the City of London. The building sold for £1.28 billion in 2017, the largest amount paid for an office building. “We’ve changed the skyline of London, rebuilt Victoria and [parts of] Leeds and Oxford city centres,” he said of his time at the company. “It’s been great fun and really busy.”

The furniture retailer DFS Furniture (DFS) FOLLOW has defied pressure on the high street by reporting a strong rise in underlying sales. It said in a trading update that underlying gross sales rose 7% in the 52 weeks to the end of June compared with the year to July 28, 2018. This growth included a 17% rise in online sales. DFS did not publish in-store sales, but analysts at Peel Hunt said that like-for-like sales were up 2 to 3%. DFS said underlying pre-tax profits for the year are expected to be “slightly above” £50 million, compared with £38.3 million last year.

Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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