Morning Financial Press Review
Paul Kettle
AM Press Round-Up -3 min read
06:45, 11th June 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.

Aston Martin opens new factory in south Wales to build SUV. DBX to be ready for sale next year, with bosses hoping to broaden Aston’s appeal. The first DBX will leave the production line at Aston Martin Holdings (AML) FOLLOW new factory in St Athan, south Wales, in the first half of 2020, in a major departure for the British manufacturer as it tries to rapidly double its annual production numbers. The DBX, the brand’s first sports utility vehicle in its 106-year history, is part of a strategy by the chief executive, Andy Palmer, to bring the carmaker into the modern era and broaden its appeal beyond its mainly male sports car clientele. Speaking at the factory, which is already producing test vehicles, Palmer said Aston Martin was targeting the tens of thousands of multimillionaire women in countries such as the US and China who are able to spend more than £140,000 on a car. “The DBX is seen as being neither male- nor female-biased – it’s neutral,” he said, referring to the results of testing with wealthy SUV owners.

AstraZeneca still on the hunt for ‘transformational’ cancer drug deals. AstraZeneca (AZN) FOLLOW will continue to look for ‘transformational’ drugs to add to its oncology portfolio, as it sharpens its focus under new cancer R&D chief José Baselga. Earlier this year the drug maker paid $1.36bn (£1.07bn) to work with Japanese pharmaceutical company Daiichi Sankyo on a promising breast cancer treatment, with a further $5.54bn to be paid to Daiichi if the drug achieves certain milestones. The size of the deal raised eyebrows among some analysts who worry about AstraZeneca’s growing debt pile and ability to make generous dividend payments to shareholders. However, it is a critical part of the company’s bid to beef up its ageing pipeline and a cornerstone of its new tactic to focus resources on cancer treatments that deliver major benefits rather than incremental improvements, according to head of oncology David Fredrickson.

Furious traders have wiped £1.5billion off the value of Hargreaves Lansdown (HL.) FOLLOW amid a backlash over its cosy relationship with Neil Woodford. Shares in the online fund supermarket fell for the fifth day in a row on Monday, as Hargreaves was forced to deny that ripples from Woodford’s calamity will cause problems for its own in-house funds. And analysts warned it could lose almost £3million in missing fees alone form the meltdown. The value of Hargreaves has fallen by 15% or £1.5billion since Woodford was forced to stop withdrawals from his flagship Equity Income fund on Monday last week. There are questions over whether the fallout will hit Hargreaves’ own-brand Multi-Manager funds, where in-house experts choose a range of fund managers to invest savers’ money in. Around £620million has been invested in Woodford Equity Income through these funds. In an effort to allay investors’ concerns yesterday, Hargreaves emphasised the total invested in Woodford Equity Income ‘is just 6.2 per cent of the total value of our Multi-Manager funds’.

Ocado Group (OCDO) FOLLOW has taken another step away from food delivery and towards technology as it unveiled plans to expand into food production with two major investments in vertical farming. The online grocer, which is focused on growing and diversifying its tech solutions arm, said it has splashed out £17million on a majority stake in Jones Food Company and a joint venture to build technology for vertical farming. Vertical farming is when food is grown at indoor facilities in multi-level vertical stacks. It allows growers to fit a lot of produce into a small space and make it available all-year round. This method has become more popular in recent years as it is often seen as an answer to provide local, fresh food to a growing urban population. It is also considered to be more sustainable, as it uses less water, less space and lower wastage than traditional agriculture methods.

Saga sets sights on members’ savings in Goldman Sachs deal. Saga (SAGA) FOLLOW is hoping to revive its fortunes in an unlikely alliance with Wall Street banking giant Goldman Sachs. A deal between the retirement specialist and the US bank, dubbed the “great vampire squid” for its influence over the banking industry, is expected to be announced on Tuesday morning. Saga chief Lance Batchelor said the group has signed a partnership with Goldman’s savings arm Marcus, the online bank that launched in the UK late last year, as many of the group’s customers “hold a large proportion of their wealth in savings”. The move has emerged months after Saga unveiled an annual loss and promised a “fundamental” change in strategy that would cut profits in an announcement that sent shares tumbling almost 40% to a record low.

The investment trust run by Neil Woodford risks raising new scepticism about its true value because it may ignore future “fire sale” transactions by his separate open-ended fund, with which it owns many unlisted company shares in common. Traditionally, unlisted shares are valued at the level of the most recent significant transaction, but Woodford Patient Capital Trust (WPCT) FOLLOW and its advisers are set to invoke European rules that allow it to ignore transactions at “distressed prices” so long as there is no change to the circumstances of the investee companies. Doubts about the real value of the trust intensified yesterday as its shares were marked down by another 6% to 59p, valuing it at £538 million. That represents a 32% discount to the official most recent estimate of net asset value per share of 86¾p. An estimated 60% of the holdings in Patient Capital are also held in Mr Woodford’s main fund Equity Income, which was gated last Monday, effectively locking in its investors indefinitely. Mr Woodford has pledged to sell all the fund’s unlisted holdings, raising the spectre of a forced sale of assets.

Chinese shareholder has its eye on larger slice of Thomas Cook Group (TCG) FOLLOW. Thomas Cook could fall into Chinese ownership after the troubled travel group confirmed that it has received an approach from Fosun International for its tour operator business. Thomas Cook is understood to have received between seven and ten preliminary offers for some or all of the company, including one from an undisclosed private equity firm. Fosun, which is Thomas Cook’s biggest shareholder, is interested in its tour operator business. It is precluded by European ownership rules from owning the airline. In a statement to the stock market yesterday, Thomas Cook said that it was in talks with Fosun after an approach. The company added: “There can be no certainty that this approach will result in a formal offer. However, the board will consider any potential offer alongside the other strategic options that it has, with the aim of maximising value for all its stakeholders.”

Vectura Group (VEC) FOLLOW searching for new leader. A respiratory drug company has announced the unexpected departure of its chief executive, despite having no permanent replacement lined up. Vectura said James Ward-Lilley, a former executive at Astrazeneca who was appointed in September 2015, would be stepping down at the end of the month after the board agreed it was “time for a new leader”. Mr Ward-Lilley, 54, has been replaced in the interim by Paul Fry, 52, Vectura’s chief financial officer, while the board searches for a new boss.

West African gold producer Avesoro Resources Inc. (DI) (ASO) FOLLOW has warned that production at its mine in Burkina Faso will grind to a halt if a labour dispute isn’t resolved within the next two days. The company is planning to contract out its mining work, to reduce costs and increase the volumes of gold it mines. But, faced with the threat of losing their jobs, miners have refused to work.

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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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