Morning Financial Press Review 06/01/20
Below are the key morning and weekend press headlines, featuring the The Times, The Telegraph, The Daily Mail & more - see the full Press section here.
The supermarket giants will reveal underwhelming Christmas sales figures this week, as the relentless pressure from discount rivals Aldi and Lidl continues to cast a shadow over the sector. is expected to be the biggest loser, with analysts at Barclays forecasting that, excluding its wholesale business, like-for-like sales will have fallen by 2.5% over the festive period. The City also expects and to report declines in sales, albeit more modest. “I don’t think there will be any great disasters, but people won’t exactly be popping champagne corks,” one senior supermarket source said. “The volume of sales has been buoyant but that hasn’t translated into value because the price competition has been so intense.” Aldi and Lidl reduced prices on bags of festive vegetables to just 15p to lure shoppers through their doors in the run-up to Christmas. Over the past decade, the expansion of the discounters squeezed the big four supermarkets’ profitability by about 40%. Aldi and Lidl are still opening about 100 stores a year between them. Apart from Aldi and Lidl, and Home Bargains are expanding their store networks, while online takeaway firms such as and meal-kit providers such as Hello Fresh are progressively nibbling away at supermarket sales, which have been especially subdued since the summer. The societal shift towards lower waste and more mindful consumption brings additional challenges. - The Times
Oil prices were expected to jump this week after the threat of retaliation for the assassination of Iranian general Qassem Suleimani spooked international commodity markets, sending prices up 3.6%. The price of a barrel of Brent crude leapt to $68.60, up from $66.25 on Friday when the US launched its rocket attack against Suleimani and his convoy near Baghdad international airport. Analysts warned any retaliation could affect supplies of crude oil through the Strait of Hormuz, which is the world’s busiest passageway for tankers carrying oil and natural gas. - The Guardian
has come under pressure from a small cohort of investors to keep mining thermal coal, highlighting the conflicting demands of climate change on the company. Anglo has been under growing pressure from investors to quit its thermal coal business. Burnt in power stations, it is a big factor in carbon emissions. Anglo, revived by chief executive Mark Cutifani, has said it will quit thermal coal mining, but has not stated when. Anglo has come under pressure from South African investors not to ditch thermal coal completely, over fears for the country’s energy security and economy. However, other investors are against coal mining: Norway’s $1 trillion (£764bn) wealth fund is to stop backing companies that extract more than 20m tons of coal a year, while Australia’s bush fires have stoked debate about coal mining in the country. - The Times
Senior executives in the UK’s top 100 companies took just 33 hours to be paid more than the typical worker’s annual salary, according to data that unions say should be a “source of national shame”. Figures released by the High Pay Centre thinktank showed that the typical FTSE 100 chief executive is paid 117 times more than the median worker, at £901.30 an hour or £3.46m a year. It means that by 5pm on 6 January 2020, the chief executives of Britain’s largest listed businesses will have pocketed more than the £29,559 annual salary earned by the median full-time employee, who is taking home about £14.37 an hour. Tim Roache, general secretary of the GMB union, said: “It should be a source of national shame that in just a handful of days, company fat cats will have made more money than the typical UK full-time worker will earn in the entire year. “These empires are built on the back of hardworking staff, many of whom will be struggling to make ends meet.” - The Guardian
Aggressive activist investor Elliott Advisors has quietly cut its stake in , easing some of the pressure on the heavily indebted shopping centre owner. Last month, Elliott reduced its position, held through derivatives, to below 5% of Hammerson’s stock. The activist started ploughing in to Hammerson shares after the owner of Birmingham’s Bullring shopping centre rebuffed a £5bn takeover approach from French mall owner Klépierre in April 2018 — a 41% premium to its share price at the time. Since then, the share prices of retail landlords have plunged amid a spate of bankruptcies and store closures. With more pain expected on the high street this year, Trafford Centre owner Intu has told investors it will likely resort to a rights issue to stave off collapse. - The Times
The eurozone has suffered the weakest post-crisis recovery after a lost decade for swathes of the ailing region, with analysts predicting the economic malaise will extend into the 2020s. The currency bloc has lagged every other major developed economy since the global recovery started in 2009 as a chasm between the performance of northern and southern eurozone countries emerged. Real GDP rose by 15% over the period, nearly half that of the US and behind other developed economies, including the UK and even sluggish Japan. The output of southern eurozone economies – Greece, Italy, Portugal and Spain – collectively inched up just 4%pc as tensions simmer with their stronger northern counterparts. - The Telegraph
One of the country’s biggest property investment families has called the bottom of the shopping centre slump after spending almost £23 million on two struggling properties. The Oglesbys, who are worth an estimated £667 million and control more than £1 billion of properties, say that the slide in retail values has reached its nadir and the asset class now represents a big opportunity. Bruntwood, the Oglsebys’ company, which is based in Manchester, bought Stretford Mall and the Stamford Quarter in Trafford in a 50:50 joint venture with Trafford council. Each invested £22.5 million in the centres and adjacent land suitable for development. - The Times
suffered the biggest plunge in investment banking fees in the City last year following a turbulent 12 months for Europe’s biggest lender. The bank, which is finalising plans to assemble a new mergers and acquisitions team focused on mid-market transactions, saw its deal advisory fees drop by nearly half last year, according to data commissioned by The Telegraph from data provider Refinitiv. HSBC received income of more than $212m (£162m) for work on M&A deals last year, down from $377m the previous year. The nosedive represented the biggest decline for a major investment bank across the City, reducing HSBC’s share of the overall UK total from 6% in 2018 to just under 4% last year. - The Telegraph
is set to launch the search for a new chairman as Paul Walsh prepares to leave the contract catering business earlier than some had expected. Mr Walsh has chaired the £30 billion business for six years. Directors of Compass are expected to consider internal and external candidates to succeed him, according to Sky News. Many had believed that Mr Walsh, 64, would stay on until 2023. - The Times
Word on the street is that is likely to see significant ‘corporate activity’ in the very near future. City sources said the business may soon be involved in a ‘major corporate move’ such as a merger. However, the precise details remain hazy at the very best. Some investors suggested that Quilter – formerly known as Old Mutual Wealth Management – might be planning to announce a special dividend or share buyback following the completion of the £445 million sale of its life insurance business, Quilter Life Assurance, to ReAssure Group. The company said last week it expects to finalise the potential cash return to shareholders no later than when Quilter’s full-year results are released in March. - The Mail
An activist shareholder has increased the pressure on after the vodka maker dismissed its proposal for a special dividend. Western Gate Private Investments accused the Stock Spirits board of arrogance after it said that it could legally disregard a vote in favour of the special resolution. Western Gate represents the family office of Luís Amaral, a Portuguese businessman with a 10 per cent stake in Stock Spirits, which is listed in London. It had urged fellow investors to vote in favour of a special dividend at the company’s annual meeting on Thursday and accused the board of being “unwilling to return cash to patient investors”. - The Times
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