Morning Financial Press Review
Paul Kettle
AM Press Round-Up -2 min read
07:49, 20th February 2019

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

Fear of Barclays executive pay cuts prompted Qatari deal, court hears. Former chairman says ability to offer board ‘competitive rates’ would have been compromised by UK bailout. Barclays (BARC) FOLLOWboard worried that executive pay would be cut if the lender failed to raise private funds and succumbed to a government bailout at the height of the 2008 crash, the lender’s former chairman told a court on Tuesday. Marcus Agius is the first senior Barclays board member to be questioned during the trial at Southwark crown court in central London. Agius, wearing a dark grey suit and blue tie, was questioned by the Serious Fraud Office’s lead prosecutors for nearly five hours over the bank’s £11bn emergency fundraising in 2008. Lead prosecutor Edward Brown QC asked the former chairman to provide details about a board meeting held in early October that year, just as the UK government was preparing to bail out Barclays’ high street peers Royal Bank of Scotland and Lloyds TSB.

GlaxoSmithKline (GSK) FOLLOWboss Emma Walmsley hands her husband £1.6m in company shares. The 49-year-old transferred 102,035 shares to spouse David Owen on Monday, according to stock market filings. She lives with Owen, 54, in a £3.7million house in London and the couple have four children. Owen is an entrepreneur and they met at a party when she was in her twenties. They married a year later, with Walmsley saying it was the best decision she ever made. The chief executive – Britain’s most powerful female FTSE 100 boss – has said joining Glaxo was her second-best choice

Nervy investors wiped £5.8billion off the market value of HSBC Holdings (HSBA) FOLLOWas it said revenues had collapsed at the end of last year amid market turmoil. The bank’s shares suffered their biggest one-day fall in two years following the warning by chief executive John Flint. HSBC posted a rise in profits and revenues for 2018 but analysts expected better and said the figures were concerning. Flint blamed problems at the end of last year on turbulent markets, at a time of sharp falls in stocks around the world. He said: ‘I was disappointed as well. Revenue collapsed in the last few weeks of the year.’ Flint is overseeing a pivot to Asia by HSBC, which has a long history in China and started out as the Hong Kong and Shanghai Banking Corporation.

Shopping centre owner Intu Properties (INTU)FOLLOW has fallen prey to hedge funds betting on a fall in its share price. Positions held by short-sellers in Intu have risen to a record high, with hedge funds holding 5.3% of its stock. Intu, which owns shopping centres including Metrocentre in Gateshead, Lakeside in Essex and the Trafford Centre in Manchester, has suffered a dramatic slump in its share price over the past year. A total of £1.2billion has been wiped off its value, and rival Hammerson walked away from plans to buy it for £3.4billion. The embarrassing climbdown prompted the resignation of Intu chief executive David Fischel, who will step down once a replacement is found.

Intercontinental Hotels Group hikes dividend handing £530m to investors after China boosts sales. The owner of the Holiday Inn and Crowne Plaza chains posted a 6.4% jump in sales to £3.3billion in the year to December 31 as it opened a record 19,000 rooms in China during the period. Revenue per available room climbed 2.5%. InterContinental Hotels Group (IHG)FOLLOW rewarded investors with a 10% hike to its dividend to $1.144 per share and the payment of a £384million special dividend, taking the total amount returned to shareholders in the period to £530million.

Patagonia Gold (PGD) FOLLOWshine was dulled as it announced the closure of one Argentine mine and the pause of operations at another. The precious metals miner said the closure was due to lower than expected production. The other mine will be placed on care and maintenance – production there has also been below predictions. Patagonia said it was still evaluating the development of other resources, but the shares tumbled 49%, or 46.5p, to 48.5p.

US airline Mesa Air bids to snap up Flybe. US airline Mesa Air has proposed a last-minute deal to takeover struggling regional carrier Flybe Group (FLYB),FOLLOW according to Sky News. The Arizona-based company is part of a consortium of investors which has offered to inject £65m into the troubled FTSE 250 carrier and pull the rug from Virgin Atlantic’s takeover bid. The refinancing plan is reportedly being led by South African aviation investment firm Bateleur Capital and US hedge fund Avenue Capital. The group plans to inject £65m of new equity at roughly 4.5p per share, a significantly higher offer than the 1p per share from the Virgin-led consortium.US airline Mesa Air bids to snap up Flybe. 

BHP backs dam disasters scrutiny. Regulator needed to avert future collapses, mining giant warns. The boss of the world’s biggest miner has admitted that the industry does not fully understand why its waste dams keep collapsing and needs to urgently invest in research to prevent more disasters. BHP Billiton (BLT) FOLLOWjoined calls for an “international, independent body” to oversee the thousands of dams holding mining waste worldwide, after the catastrophic collapse in Brazil last month believed to have killed more than 300 people. Andrew Mackenzie, its chief executive, said that the industry needed to “acknowledge the deficiencies in the scientific and technical understanding” and to “redouble our efforts to make sure that these things can’t happen again”. The collapse of the Córrego do Feijão dam in Brumadinho, owned by Vale, the Brazilian iron ore giant, unleashed millions of tonnes of crushed rock and water known as “tailings” that buried all in its path. The death toll stands at 169, with a further 141 people still missing. Three years ago, 19 people died when a similar tailings dam collapsed at Samarco, another Brazilian mine co-owned by Vale and BHP. Researchers have catalogued more than a dozen other serious collapses since 2007.

InterContinental vows to ‘up its game’ in German turf war with Whitbread. InterContinental Hotels Group (IHG) FOLLOWhas promised to “up its game” as a battle with blue-chip rival Whitbread (WTB) FOLLOWerupts in Germany. The global hotel powerhouse views the country as one of a handful of “strategic markets”. But it faces growing opposition from its FTSE 100 peer. Whitbread boss Alison Brittain has vowed to “stamp across Europe” with Premier Inn; and Germany is her primary growth target. Premier Inn, Britain’s biggest hotel chain, wants to quickly replicate its success abroad. It is aiming to establish itself as one of Germany’s biggest hotel firms, where it is aiming to have 33 hotels with 6,000 by 2021.

Cobham takes another £160m hit on troubled tanker contract. Cobham (COB) FOLLOWwill take a further £160m hit on the troubled KC-46 air-to-air tanker project after striking an agreement with Boeing. The figure includes a £86m compensation payment for delays in building a refuelling system for the tanker’s fuselage, which has yet to be certified by regulators. Boeing will withhold a £37m payment owed to Cobham as part of the fee. The remaining £74m charge related to Cobham’s delivery of similar systems mounted on the KC-46’s wingtips. Testing for the system will begin this year and is expected to be completed in 2020.

South Western rail deadlock takes shine off FirstGroup trading. Bus and rail operator FirstGroup (FGP)FOLLOW is in deadlock with the Government over a contractual row about one of Britain’s biggest rail networks. The sprawling South Western train franchise remains a thorn in the side of the transport giant, causing sales growth to slow over the last final four months. While problems on the network quickly became an open secret across the industry last summer, it was not until November that FirstGroup said it was in talks with the Government about renegotiating terms on the country’s fourth-largest rail franchise.

Glencore gave Kazakh dictator’s ally big share in school. Glencore (GLEN)FOLLOW gifted a majority share in an elite school in Kazakhstan to a trusted lieutenant of the country’s ruling autocrat in a previously undisclosed deal that sheds light on how the company built relations with the  repressive regime. A subsidiary of the FTSE 100 mining group invested $23 million in Haileybury Astana, a Kazakh offshoot of the Hertfordshire public school that counts Clement Attlee and Sir Stirling Moss among its alumni and traces its origins to a college set up by the East India Company in 1806.

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