Afternoon Financial Press Update
Paul Kettle
PM Press Round-Up -2 min read
14:52, 14th May 2019

Below are the key headlines from the midday updated papers, featuring the Financial Times, The Times, The Telegraph, The Daily Mail & more - see the full Press section here.

Red alert for blue-chip dividends as Vodafone slashes £4bn payout. Vodafone Group (VOD) FOLLOW on Tuesday took the axe to its dividend in a “massive” blow to investors that increases the chances of other big companies following suit. The telecoms giant went back on a pledge six months ago to at least hold its dividend, cutting it by 40% from 15 euro cents a share to just nine. That saves it €1.6 billion (£1.4 billion) a year on the back of a £6.6 billion loss caused by the sale of Vodafone India. Chief executive Nick Read said the decision was “not taken lightly” but claimed it “secures the dividend going forward”. This is the first time since 1990 Voda has cut its dividend. It is a core holding of most UK pension funds, paying out nearly £33 billion in the past 10 years.

Property giant Landsec takes £500m hit as retail pain bites. Land Securities Group (LAND) FOLLOW, the UK’s largest property firm, on Tuesday warned that a wave of retail failures has dented the value of its empire by a whopping £557 million. The Bluewater shopping centre part-owner, which is shifting its focus to London offices, said its portfolio value dropped to £13.8 billion in the year to March. That was driven by income falls in its shopping centres, retail parks and some central London stores. The firm also suffered as numerous businesses closed shops or sought rent cuts using company voluntary arrangements. Since the start of last year, more than 80 retail and food chains have gone into CVA or administration across the UK, affecting more than 6000 stores across the industry. Rob Noel, Landsec’s chief executive, told the Standard: “Consumers are exercising caution and retailers are seeing their costs go up. There is increased stress for both parties.”

Greggs raises profit targets as vegan sausage roll flies off the shelves. Greggs (GRG) FOLLOW expects annual sales and profits to be “materially higher” than last year after the runaway success of its new vegan sausage roll. The high street bakery chain said the introduction of its £1 Quorn-filled baked rolls to its entire estate in February helped fix availability problems at the beginning of the year that saw surging demand outstrip supply. Its success helped sales rise 15% in the 19 weeks to March while sales in stores open for more than one year grew 11%, significantly faster than the growth rate a year ago. Shares soared by more than 10.5% in morning trading, sending the bakery’s market value to more than £2bn.

Legal & General to develop 1000 rental homes in Wandsworth. Legal & General Group (LGEN) FOLLOW on Tuesday backed its biggest build-to-rent deal after snapping up land for a £500 million project in Wandsworth in a bid to help ease the capital’s housing crisis. The investor, which is looking to cater for Londoners priced off the housing ladder, has teamed up with Dutch asset manager PGGM to buy two sites across six acres. Around 1000 homes will be built near Wandsworth Town rail station solely for rent. The scheme also includes 35% affordable housing and extensive commercial space which could be used for shops, cafes or gyms.

Investors set to tell Standard Life its new finance chief is paid too much. Standard Life Aberdeen (SLA) FOLLOW is bracing for an investor revolt at its annual general meeting today after proxy advisory firms Glass Lewis and Institutional Shareholder Services (ISS) raised concerns about its new finance chief’s salary. Shareholders have been advised to vote against Stephanie Bruce’s £525,000 pay, which is roughly 17% more than her male predecessor. Ms Bruce will join the asset manager from accounting giant PwC on June 1, replacing current chief finance officer Bill Rattray, who is retiring after more than three decades at the company.

Shoppers can pick up Amazon orders from Next in latest retail tie-up. Next (NXT) FOLLOW has signed a tie-up with Amazon that will mean shoppers can pick up their orders from the online giant at the high street retailer’s 500 shops. Lord Wolfson, boss of Next, said that the “Amazon Counter” service would help to “contribute to the continued relevance and vibrancy of our stores”. The move should drive extra footfall into the retailer’s store estate, which is battling with falling shop sales as more shoppers shift online. In March Next revealed that the business had made more from its website than its network of shops for the first time. The strength of Next’s Directory business has helped shield the retailer from the winds of change blowing through the high street.

BHP embraces nickel mines as demand rises. The world’s biggest mining company is to keep its nickel-mining operations, reversing plans to offload the division in light of anticipated demand for the commodity in electric vehicles. BHP Billiton (BLT) FOLLOW said that it would retain Nickel West in Australia — which it had looked to sell as recently as 2017 — saying that it now believes it to be a “future growth option”. Andrew Mackenzie, BHP chief executive, said: “Developments such as climate change and dramatic shifts in technology present both challenges and opportunities.” He added that the company was monitoring strategic themes such as decarbonisation and the electrification of transport. Nickel West is now seen having potential for high returns thanks to “the expected growth in battery markets and the relative scarcity of quality nickel sulphide supply”.


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