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.
Sainsbury’s merger ‘will hit shoppers’. Rival chains warn watchdog of damaging impact. The proposed merger of and Asda could reduce competition, increase fuel prices, damage the business of small retailers and suppliers, and result in higher prices for consumers. Detailed submissions to the competition watchdog from rivals and suppliers about the proposed tie-up between Britain’s second and third largest grocers have revealed the full extent of opposition to a merger that will change the face of the grocery business. Wm Morrison, one of the big four grocers with Sainsbury’s, Asda and Tesco, warned that even a small price rise after the merger could have a “significant adverse impact” on shoppers. It also believes that its rivals are overstating the importance of the discounters Aldi and Lidl, claiming that most consumers continue to rely on large grocery stores for their weekly or fortnightly food shop.
Energy price cap threatens viability of tie-up with Npower. The merger of two of Britain’s biggest energy suppliers has been thrown into doubt after the government’s price cap threatened the financial viability of the combined company. SSE agreed last year to spin off its household supply arm and merge it with Npower, owned by Innogy, to form a new independent supplier that would be listed in London. The deal was due to complete in the first quarter of next year but the companies warned last night that this was likely to be delayed. Innogy blamed “adverse developments in the UK retail market and regulatory interventions such as the price cap”. It said these had “had a significant impact on the outlook for the combined retail company” and the two sides were now in talks to revise the terms of the deal including a potential cash injection into the new supplier. SSE said that the price cap would affect the new company’s “ability to obtain and retain an appropriate credit rating”.
National Grid welcomes a Viking raider. A £1.7 billion project to build the world’s longest subsea power cable between Britain and Denmark has been approved by . The 760km Viking Link interconnector between Bicker Fen in Lincolnshire and Revsing in Jutland is scheduled to be completed by 2023, the FTSE 100 group said. It will be able to carry up to 1.4 gigawatts of electricity, enough to power more than a million homes, and will enable the UK to tap surplus energy from Denmark’s wind farms. The project is a 50-50 joint venture between the Grid, which is responsible for operating Britain’s electricity transmission system, and its Danish counterpart.
Burberry ahead of the game with new look. Profits rose at after an “exceptional” response to the creations of the luxury brand’s new designer Riccardo Tisci. The British fashion house said it was feeling “energised” by the early results from its transformation strategy as it reported a first-half operating profit of £173 million, up from £127 million last year. Adjusted operating profit fell 4% to £178 million but this was ahead of the £169 million the City expected and Burberry said it was on track to meet its full-year targets. Marco Gobbetti, chief executive, credited Mr Tisci’s first runway collection, Kingdom, for building significant “brand heat” and said it was the second most viewed show this season on Vogue.com. “Riccardo’s vision is of a Burberry that is as much for the young as for the old,” he said. “Street influences play just as important a role as codes of luxury and sophistication.”
Profits fall as Halfords changes gear. Profits at fell by 23% in the first half of the financial year amid rising costs and investment in its new strategy, as the company said it was trading “broadly in line with our expectations”. Shares in Britain’s biggest bike retailer fell 7¼p to 302¾p, down 2.3%, despite a 2.5% increase in like-for-like sales on the back of growth in its retail business and autocentres. The company had warned investors that profits would not grow until 2021 as it looked to boost investment in its stores, services and digital operations to improve its position in an increasingly competitive retail environment.
Warmer autumn threatens to leave Superdry high and dry. An unusually warm autumn has continued to drag on sales of coats and jackets at , which warned last month that profits this year would be about £10 million lower than expected. The fashion retailer said that sales for the six months to October 27 rose 3% to £415 million but analysts raised concerns that unless there was a cold snap, there could be a further slowdown in growth. This time last year the group reported a 20 per cent spike in sales. “While some of our key markets saw colder weather conditions last week, with the result that our sales performance in those markets was more typical for this time of year, we have not yet seen a sustained period of seasonally typical weather,” Superdry said.
Shipping drop leaves Inmarsat all at sea. , the satellite operator, lost as much as a tenth of its value yesterday after a worse than expected downturn at its shipping division. The company, which sells broadband and phone services over a network of satellites, reported a near 6% fall in sales at its mainstay maritime business in the third quarter. The drop offset a stronger performance at its aviation division, where Inmarsat has carved out a lucrative niche for in-flight wifi on commercial passenger aircraft.
Investors dump Renewi stock. Investors have dumped a European waste management company after it issued a profit warning over production issues at a main site. said that on Wednesday regulators in the Netherlands had requested further details from the company about its treated soil. The scrutiny meant full production at the plant, which is one of the biggest in Europe and treats contaminated soil and water, was not expected during its financial year and would hit operating profits by up to €3 million a month. Renewi was created through a €482 million merger of Shanks and Van Gansewinkel Groep and has about 8,000 staff. It has four divisions, including its municipal waste business, which operates in Britain.
Howden Joinery’s depots serve up revenue boost. A rise in the number of British depots helped the kitchen retailer to boost revenues by 7.5% in the third quarter. Howden expects to have opened 33 depots, taking its UK total to 694, by the end of the year. Like-for-like sales were up 6.1% between June and this month. The share price rose 3.75% to close at 489.5p after Howden said that its performance was in line with management expectations. Howden is the largest designer and manufacturer of fitted kitchens and joinery in Britain, making it an indicator of the health of the housing and construction industries. The company relies on sales made through contractors rather than selling directly to homeowners and the most recent data showed a slowdown in homeowners making improvements.
BAE Systems on course despite fears over Saudi links. Britain’s largest defence contractor has reiterated its financial guidance to the City despite concerns over its dealings with Saudi Arabia. and other companies with commercial links to Saudi Arabia have come under scrutiny after the international outcry over the killing of the journalist Jamal Khashoggi at the Saudi consulate in Istanbul last month. BAE is one of the world’s biggest defence companies, operating in more than 40 countries with about 83,000 staff. Shares in the company have been volatile after Khashoggi’s murder as investors fretted over the impact on sales. In a quarterly trading update yesterday the company posted a steady performance in its UK, US and international business, which includes the Middle East.
Duo to make generic version of Glaxo treatment. Two UK-listed drugs companies have launched plans to develop a copycat version of lucrative respiratory portfolio. and have signed an agreement to commercialise generic versions of Glaxo’s Ellipta products as they target the potential $5.5 billion sales forecast for the products by 2024. The tie-up marks a deepening of the relationship between Hikma and Vectura, who are attempting to launch a version of Glaxo’s successful Advair inhaler. Hikma was founded in Jordan in 1978 and spans more than 50 countries, selling generic, branded and injectable products. It appointed Siggi Olafsson, the former boss of Teva, an Israeli rival, as chief executive this year to revive the company, which has struggled with delays in launching a generic Advair and had repeatedly downgraded its financial forecasts, triggering its exit from the FTSE 100. Vectura, based in Chippenham, Wiltshire, is a respiratory specialist that has partnerships with several big pharma companies, including Glaxo. Following conversations with the US Food and Drug Administration, the duo have agreed to develop and commercialise at least three of Glaxo’s portfolio products, with the Breo Ellipta being prioritised.
On today's podcast: W Resources provide an update on progress at La Parrilla, its tungsten-tin mine in Spain. Emmerson completes the Environmental Baseline Study at their potash project. Malcy talks about: Eco Atlantic O&G, Range Res, Bahamas Petroleum & Hurricane Energy. John Stepek author of Sceptical Investor.
SP Angel daily look at commodities and miners, featuring: Bluebird Merchant Ventures* (BMV LN) – Funding raised to complete pre-construction phase for Gubong gold mine Cora Gold* (CORA LN) – Sanankoro oxides demonstrate up to 97% gold recoveries Chaarat Gold* (CGH LN) – Joint venture to build gold mine in Kyrgyzstan Strategic Minerals* (SML LN) – Moving to 100% ownership of Redmoor
John Peters, Managing Director of Strategic Minerals, commented: "The recent resource upgrade has highlighted the potential world class nature of the Redmoor Tin/Tungsten project and has given the Board confidence to consolidate control.”
Five financial stories, trending today in a 70 second podcast, including: Accrording to the the British Chambers of Commerce, UK companies look set to cut investment by the most in 10 years in 2019 because of Brexit, even if Prime Minister Theresa May gets a deal to ease the country out of the bloc.