Morning Financial Press Review
Paul Kettle
AM Press Round-Up -3 min read
07:25, 14th March 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

Sports Direct International (SPD) FOLLOWoffers £150m loan to bail out Debenhams (DEB).FOLLOW Sports Direct has offered Debenhams an alternate £150m deal, just days after the troubled high street retailer revealed it was in crunch talks with its lenders over a bailout of the same amount. In a brief statement Sports Direct said that the loan would be “guaranteed to be interest-free” if the fashion house issues 5% new shares to the company and appoints retail tycoon Mike Ashley as director and chief executive. “If such approvals were not forthcoming, the loan would bear interest at 3%,” it said. A total of £40m would be used to repay Debenhams’ bridge facility for 12 months with the remaining £110m available for general working capital

Doubts over Standard Life shake-up, A management shake-up at Standard Life Aberdeen (SLA) FOLLOWin which Martin Gilbert will cease to be co-chief executive has been branded “entirely cosmetic”. Analysts and senior industry observers expressed surprise that Mr Gilbert, 63, would become vice-chairman of Standard Life Aberdeen and focus on winning new business while Keith Skeoch, 62, would become responsible for the troubled asset management group. “It is entirely cosmetic. Martin’s role as vice-chairman is exactly the role he has been engaged in since the merger,” said one person close to the company. Another said: “What change? The new chairman has passed up the opportunity for more root and branch reform.”

Avast Software (AVST)FOLLOW CEO steps down less than a year after UK’s biggest tech listing. Te chief executive behind one of Europe’s biggest technology floats of 2018 has stepped down only ten months after listing on the London Stock Exchange. Vincent Steckler, who has led anti-virus software provider Avast since 2009, said that he plans to retire this year. He will be succeeded by the president of the company’s consumer business, Ondrej Vlcek. In May 2018, Mr Steckler led Avast to its debut as the largest UK technology float on the London Stock Exchange, with a market value of more than $3bn (£2.5bn). Mr Steckler also led the Czech company through its major acquisition of AVG and is credited with growing its revenues from $20m to $800m in a decade

Drugs maker Hikma Pharmaceuticals (HIK) FOLLOWback in black despite fierce competition. Hikma has swung back into profit after putting the hefty costs associated with an acquisition two years ago behind it. The Jordanian generic drug maker made a $293m (£223m) pre-tax profit in 2018, compared to a $738m loss a year earlier, when it booked a massive impairment charge and paid restructuring costs for its acquisition of Roxane Laboratories, now renamed West-Ward Columbus. Siggi Olafsson, Hikma’s Icelandic chief executive, said 2017 had been a tough year, but that the teething problems related to Roxane were now behind it. “We have a new team in place and are on track with our plan for growth,” he added.

Carphone fined £29m over Geek Squad sales. Mis-selling mobile phone insurance and support products has landed Carphone Warehouse with a £29.1 million fine and it will have to stump up a further £2.3 million in compensation to customers. The fine follows an investigation by the Financial Conduct Authority (FCA), which found problems in the selling processes of the electronics retailer’s support division, which it calls the Geek Squad, between December 2008 and June 2015. After the FCA found that the company had fallen short of “expected standards” it agreed an early settlement. Carphone Warehouse is part of Dixons Carphone (DC.),FOLLOW which was created in 2014 through a merger between Dixons Retail and Carphone Warehouse. It has 42,000 employees in nine countries and about 1,000 shops.

Prudential (PRU)FOLLOW shifts £37bn to Luxembourg ahead of Brexit. Britain’s biggest insurer has shifted billions of pounds worth of assets into Luxembourg ahead of Brexit, joining the long list of banks, asset managers and insurers that have moved nearly £1 trillion out of the UK. Prudential revealed that it had spent £27m preparing for Brexit, which includes setting up an operation in Luxembourg, and has transferred £37bn in customer assets to the EU hub. The figures emerged days after think tank New Financial identified more than 275 firms that have moved or are moving some of their business, staff, assets or legal entities from the UK to the EU in preparation for Brexit

Dignity defends pricing as watchdog probes funeral sector. Funeral provider Dignity (DTY) FOLLOWhas mounted a defence of its pricing and service after suffering a “challenging year” marked by a fierce price war and an impending competition probe into the sector. Dignity boss Mike McCollum insisted the company “offered the highest levels of client service” and said it had cut prices well in advance of the Competition and Markets ­Authority opening an inquiry into “unaffordable” funeral plans. “The changes in our pricing last year predated the CMA [probe] by about six months. We are very much reacting changing competitive market environment,” he said.

Stobart cuts dividend in fresh blow to feuding shareholders. Aviation and energy conglomerate Stobart Group Ltd. (STOB) FOLLOWhas cut its dividend and will use the cash to expand Southend Airport in a move likely to aggravate two of its biggest investors. The company will lower its investor payouts from 15p to 6p a share as it looks to boost footfall through the Essex airport, which is seen as key to its growth plans. The move means that the annual dividend cheques received by former chief executive Andrew Tinkler and star fund manager Neil Woodford, who between them own more than 85 million shares according to Bloomberg filings, will fall by almost £8m. Last year the pair attempted to oust Stobart’s chairman in one of the biggest boardroom bust-up of 2018.

Wellcome Trust yesterday offloaded about 57 million shares in Syncona Limited NPV (SYNC)FOLLOW at 245p a share, raising £141 million. The placing, handled by the brokers Goldman Sachs and Numis, cuts its stake from 36.8% to 28.1% and was priced at a 4.7% discount to the share price on Tuesday. Wellcome remains by far the biggest shareholder and said it would “continue to be a supportive, long-term shareholder”. It had agreed not to sell further shares for 180 days. The Syncona share price has doubled since it reversed into Bacit, a London-listed investment group, in 2016 and then this month sold Nightstar Therapeutics, a gene therapy specialist, to Biogen in the US for $877 million, its first disposal.

Shares in the oil and gas explorer Red Emperor Resources NL (DI) (RMP)FOLLOW tanked after a test at a well at its Alaska site turned out to be a dud. The London-listed company, with partners 88 Energy Limited (DI) (88E) FOLLOWand Pantheon Resources (PANR),FOLLOW said the quality of oil at the site did not warrant further testing. It was a major blow for the firm, which lists the location as one of only two projects it is involved in on its website. Yesterday, shares in Red Emperor plunged 85.2%, or 4.33p, to 0.75p.

Veronique Laury’s future as chief executive of B&Q owner Kingfisher (KGF) FOLLOWlooks increasingly uncertain after analysts asked if time was running out for the FTSE 100 boss. Investment bank Stifel downgraded the DIY group, suggesting shareholders were losing confidence in her five-year transformation plan. Laury has been racing to reduce costs, improve its IT system and integrate the products sold across the entire business. But Stifel suggested that shareholders now think Laury’s ambitions to achieve £500million in additional profits in less than two years are unachievable. She is now more than halfway through the transformation plan. Analysts at the bank blamed poor planning and an out-of-date DIY business model for the group’s woes. Stifel has now urged the board to take action on management ahead of Kingfisher’s full-year results next Wednesday.

Shopping centre owners Hammerson (HMSO) FOLLOWand Intu Properties (INTU) FOLLOWboth fell after a report by Liberum issued a disappointing outlook for the retail property sector. It forecasted a 20% decline in retail values across the two companies’ portfolio over the next two years. The grim forecast follows Hammerson’s botched attempt to buy Intu for £3.4billion last year.

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