Morning Financial Press Review 05/09/19
Paul Kettle
AM Press Round-Up -3 min read
06:30, 5th September 2019

Below are the key morning press headlines, featuring the The Times, The Telegraph, The Daily Mail & more - see the full Press section here.

Several banks have warned of additional financial hits after a sudden surge in payment protection insurance claims ahead of last month’s deadline. Royal Bank of Scotland Group (RBS) FOLLOW said PPI claims had spiked before the Aug 29 cut-off date and were “significantly higher than expected”. It warned this sudden increase in volume could result in an unexpected charge of between £600m and £900m in its third quarter results, on top of the £5.3bn already set aside. CYBG (CYBG) FOLLOW, which owns Clydesdale Bank, Yorkshire Bank and Virgin Money, also said it had seen a rush in claims ahead of the August deadline with a final bill of between £300m and £450m. “The group is seeking to establish an initial cost estimate, which is expected to be material, and the group will update the market as soon as possible,” it said.

Britain’s biggest housebuilder has posted record annual profits as improved margins offset a fall in average selling prices. Barratt Developments (BDEV) FOLLOW delivered pre-tax profits of £909.8 million for the year to the end of June, an increase of 8.9% on the previous 12 months. The profit rise came despite a 2.3% decrease in revenue to £4.76 billion as the company’s average selling price fell to £274,400 from £288,900 a year earlier. Barratt said that the fall in selling prices reflected changes in its product mix and its strategy to stop developing in central London.

A leading member of the family that founded Cobham (COB) FOLLOW has stepped up her attempts to block the £4 billion sale of the defence and aerospace company by contacting leading shareholders. Lady Cobham has reportedly written to the 15 largest investors in Cobham in a bid to derail a takeover by the US private equity firm Advent International, which is to be put to a shareholder vote later this month. The letter follows her demands that Ben Wallace, the defence secretary, and Andrea Leadsom, the business secretary, intervene on the grounds of national security and the loss of high-tech jobs to the UK.

Just Group (JUST)  FOLLOW shares took a hit after the life insurer said first-half profits fell by more than a quarter to £114m as it seeks to comply with new rules forcing it to hold more capital behind its lifetime mortgage products. New regulations introduced by the Prudential Regulation Authority (PRA) could increase the amount of capital the company needs to hold by another £130m by the end of 2021. Just Group was forced to tap investors for another £375m earlier this year to offset the changes, although interim chief executive David Richardson said there were no plans for further fundraisings in 2019. The company completed a new £118m reinsurance transaction during the first half of the year which Mr Richardson said had showed “demonstrable action” to improve its capital position that is “not reliant on borrowing from the market”

A social media star famed by Hannah Uttley for cleaning tips and housekeeping advice has boosted sales at the homeware retailer Dunelm Group (DNLM) FOLLOWCustomers flocked to its stores and website after ‘cleaning influencer’ Sophie Hinchliffe, known as Mrs Hinch, posted a photograph of a £10 bamboo bath tray from the retailer on Instagram. Dunelm chief executive Nick Wilkinson said subsequent demand was so strong the tray sold out. He said: ‘The background of many people’s selfies is their home. Some people are choosing to show photographs of how well they’re managing their home, including some influencers. ‘You’ve got the likes of Mrs Hinch who are painting a picture of perfection and a beautiful home.’

Pub group Fuller Smith & Turner (FSTA) FOLLOW  will dish out £69million to shareholders after completing the £250million sale of its brewery arm to Japan’s Asahi in January. The London-based company saw shares rise as its pubs and hotels arm thrived. It hailed a ‘good start’ to the financial year in an update ahead of its annual general meeting in NovemberSales in the managed pubs and hotels division rose 2.5% for the 22 weeks to August 31, while like-for-like profits in its tenanted arm fell 2%.

Ryanair Holdings (RYA) FOLLOW pilots in the UK are to strike for a further seven days in September, the union has announced. The British Airline Pilots Association (Balpa) said its members would walk out for a series of 24-hour stoppages between 18 and 29 September, adding that Ryanair had refused to seek conciliation talks at Acas to resolve the dispute over pay and working conditions. The carrier has managed to operate all of its scheduled UK flights this week despite a three-day strike by domestic pilots, partly by bringing in more contractors and moving its pilots from around Europe. The union admitted that the strikes to date, including a two-day stoppage in late August, had a “limited impact” on the travelling public but caused considerable internal disruption at the airline.

Halfords Group (HFD) FOLLOW  has issued another profit warning, blaming poor summer weather and flagging consumer confidence for a slump in sales. The UK’s biggest bike retailer said total revenues slumped 3.9% in the 20 weeks to 16 August as the business struggled amid a “challenging retail backdrop” on the high street. Halfords said in light of the tough conditions it expected underlying profits before tax this year to be in the range of £50m to £55m. In May, Halfords told investors to expect profits “broadly in line” with its 2018 earnings of £58.8m. The company’s share price fell more than 3% in early trading on Wednesday hitting a new 52-week low.“After the hottest summer in 100 years last year we weren’t expecting to see massive growth in cycling sales this year,” said Graham Stapleton, the chief executive. “We don’t think there is a structural issue here, we think there is a consumer confidence issue affecting the timing of some spending, with some weather.”

 

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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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