Morning Financial Press Review
Paul Kettle
AM Press Round-Up -3 min read
06:14, 9th 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.

Tobacco giant Imperial Brands (IMB) FOLLOW has abolished a key pledge on dividends as part of a shake-up to investor payouts. The Lambert & Butler and Davidoff maker said it would stick to increasing its dividend by a tenth this year but thereafter would link it to “underlying business performance”. In addition the Bristol-based company will return £200m to investors with the launch of a share buyback programme. The changes would allow Imperial “greater flexibility” to pay back loans and invest in growth opportunities, the company said. Unlike some of its rivals, Imperial has failed to arrest the decline in its share price this year. Its stock had fallen by almost 14% in 2019 prior to Monday’s announcement after dropping by a fifth in the previous year.

The government had a “pervasive” influence over the strategy taken by a scandal-hit restructuring division of Royal Bank of Scotland Group (RBS) FOLLOW that mistreated thousands of businesses, according to documents revealed in a legal claim against the bank. Court papers show that RBS executives complained that a division of the Treasury had pressured its Global Restructuring Group to use the bank’s contentious property unit to acquire customers’ assets. The revelations are likely to increase calls for a public inquiry into the state’s role in one of the biggest financial scandals of recent years. They appear in public documents in a legal battle between Oliver Morley, a wealthy property developer, and RBS.

British Airways has vowed to fight a record fine of £183m for a customer data breach last year. Willie Walsh, the boss of British Airways owner International Consolidated Airlines Group SA (CDI) (IAG) FOLLOW, said the airline would “take all appropriate steps to defend the airline’s position vigorously”. BA was hit by a “sophisticated, malicious criminal attack” that resulted in the details of 500,000 customers being accessed by hackers. Announcing the fine, the Information Commissioner’s Office (ICO) blamed the airline’s “poor security arrangements”. It is the first such fine to be handed down under new rules that have given the regulator powers to levy much bigger penalties. Previously, ICO fines were capped at £500,000, an amount it imposed on Facebook Ireland last October and credit agency Equifax in 2017.

The gambling group behind Ladbrokes and Sportingbet has tried to draw a line under allegations surrounding the disposal of its Turkish business by issuing a formal denial of wrongdoing. GVC Holdings (GVC) FOLLOW was responding to reports that it had offloaded the controversial Headlong operation to a business partner of Kenny Alexander, the chief executive, a connection that shareholders were never told about. In November 2017 it announced the sale to Ropso Malta, backed by investors who provided IT services to the business, in a deal worth up to €150 million over five years. However, it ended up waiving the payments when its continuing involvement in the unregulated Turkish business threatened to scupper last year’s £3.2 billion cash-and-shares takeover of Ladbrokes Coral Group.

Photo-Me International (PHTM) FOLLOW has delayed publishing its annual accounts, saying that its new auditor requires higher levels of scrutiny. The group had been due to report its annual accounts today. However, it said that Grant Thornton, its new auditor, needed more time to complete its work as it had recently introduced “enhanced internal regulatory scrutiny”. Photo-Me replaced KPMG as its auditor in October, citing “commercial reasons”. It said yesterday that its board believed that the accounts were “substantially complete” and it emphasised that the auditor had “not raised any material issues in relation to Photo-Me’s accounts”. The company also said that it expected to report results in line with present market expectations by July 23.

For a long time, online fashion firms seemed to be immune to the woes afflicting Britain’s bricks-and-mortar retail sector. But junior stock market darling ASOS (ASC) FOLLOW now looks to have been infected too. Weekend reports that around 100 redundancies are in the works at its head office – mainly focused on its marketing department – sent Asos’s stock down 146p, to 2461p yesterday. Asos hasn’t confirmed the claims but it should be noted that the company employs around 4,500 people in total, meaning 100 is quite a small proportion of its overall staff. There has been a general trend towards companies that are aimed at young people ditching old-style marketing tactics to focus instead on social media stars, who are wince-inducingly referred to as ‘influencers’. Analysts at financial group Mirabaud are optimistic the move could pay off, saying: ‘We think the cuts would most likely be focused on traditional marketing channels, while the company pivots to making significant efforts on social media. So rebalancing in this way would be a positive step long term.’

BP (BP.) FOLLOW solar subsidiary is on the hunt for Britain’s shiniest grass to help make the most of new double-sided solar panels that can harness light reflected off the ground. Lightsource BP hopes the “bi-facial” solar panels will boost the amount of renewable energy generated at its solar farms and could make them more economic in gloomier parts of Northern Ireland and Scotland. At a test site outside Belfast the company found that the bifacial panels can increase electricity output by almost 15% – but this can be much higher if the ground beneath the panel is particularly reflective. Lightsource BP is using the findings from its experiment to work with a seed company in Norfolk to find the “most reflective” grass type to grow underneath the solar panels.

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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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