Morning Financial Press Review
Paul Kettle
AM Press Round-Up -3 min read
07:31, 13th 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

GSK boss still paid less than science chief despite jump to £5.9m. GlaxoSmithKline (GSK) FOLLOWboss Emma Walmsley received a 20% pay jump to £5.9m last year but still took home less than the company’s chief scientific officer. Britain’s biggest drugmaker revealed in its annual report that Dr Hal Barron was paid £6.6m last year and got both a higher basic salary and annual bonus than the chief executive. Glaxo said at the time of Ms Walmsley’s appointment that her remuneration was set “at a level to reflect the fact that this was her first chief executive role”. It was set below the market rate and 25pc less her male predecessor Sir Andrew Witty after investors demanded that her salary be reduced to reflect her experience.

Petrofac Ltd. (PFC) FOLLOWboss Ayman Asfari loses legal case in Italy. The boss of Petrofac has lost his appeal against an insider trading fine imposed by Italy’s financial regulator. After a court in Rome upheld the penalty, Ayman Asfari said that he planned to appeal to a higher court. A spokesman said that the ruling had been “a total surprise and hugely disappointing”. Mr Asfari, 60, has been trying to clear his name since 2017, when he was ordered to pay more than €600,000 by the Italian regulator, known as Consob. The case relates to dealings by Mr Asfari in 2012, when he made €300,000 by betting on a share price fall at Saipem, an Italian rival, hours before Pietro Franco Tali, its chief executive, resigned over a corruption inquiry. Consob concluded that Mr Asfari had been tipped off by Mr Tali about his departure, a claim denied by both men

Pendragon (PDG)FOLLOW focuses on second-hand market as new car sales slide. Drivers reluctant to splash out on a new vehicle because of Brexit-related economic uncertainty have put a dent in the profits of Pendragon, one of Britain’s biggest car dealers with almost 200 outlets. Posting annual results, the company, which owns Evans Halshaw and Stratstone chains, said the 6.8% decline in UK new car registrations last year was down to worries about making a major purchase with the country set to leave the European Union. Trevor Finn, chief executive, said: “It’s not a new story. People have been nervous about such a big purchase for a long time.”

G4S (GFS) FOLLOWready to cash in with unit sale. A struggling outsourcer has received bid interest in its cash-handling business, with contact coming from both private equity firms and rival companies. G4S launched a review of its cash business in December amid pressure to turn itself around. In an update alongside its full-year results yesterday, it said that it had received “expressions of interest” to acquire the unit, but added that it was too early to know whether they would lead to a deal and that it continued to “pursue all strategic options”. The potential suitors were not named. Analysts at Jefferies, the investment bank, estimated that the cash business could be worth up to £1.9 billion. G4S’s overall market valuation is about £3.2 billion.

Domino’s Pizza Group (DOM) FOLLOWdefends growth plans after serving up ‘mixed year’. Domino’s Pizza has refused to backtrack on its ambitious growth plans despite serving up a “mixed year” and warning store openings will slow over the coming months. The company’s expansion plans have been knocked off course as its franchisees dig their heels in and demand a larger slice of the profits. Domino’s is the master franchisee in the UK, Ireland and a handful of European countries. It relies on its franchise partners to open new stores and boss David Wild has committed to a target of having 1,600 in its home market. But after a record 95 openings in 2017, Domino’s was forced to downgrade its projections and ended last year with 59 new sites

Mothercare (MTC) FOLLOWeases its worries by letting toy business fly the nest. The Early Learning Centre toy business has been sold by Mothercare to The Entertainer group as part of a restructuring of the struggling maternity and baby retailer. Mothercare said that it had agreed to sell its toy business to Teal Brands, holding company of The Entertainer’s businesses, for up to £13.5 million. It will be paid £6 million in cash on completion of the deal, plus £5.5 million for stock within a few months of completion. A further £2 million in fees based on future performance could be generated over the next two years. Mothercare said that the proceeds would be used to meet its target of becoming debt-free with its banks by the end of the year. The retailer also has agreed a long-term partnership with The Entertainer to supply toys to its British stores and to Early Learning Centre franchise outlets overseas

888 Holdings (888) FOLLOWdefies headwinds to post record profits. Online bookmaker 888 Holdings believes “the pain in the UK is behind us now” after posting record annual profits. The FTSE 250 gambling operator refused to be blown off course by a series of “headwinds” with its casino and sports faring particularly well over the last 12 months. Pre-tax profit rose sharply to $109m (£83m) on broadly flat revenue of $541m. The company’s bottom line was boosted by the conclusion of a string of German tax assessments and regulatory investigations. A crackdown by UK regulators to curb problem gambling had taken its toll on revenues over the past 18 months, 888 said, as it pointed to “encouraging trends” in Britain more recently.

Staffline Group (STAF) FOLLOWunderpaid workers for years, says auditor PWC. A listed recruitment company has identified underpayments to workers going back years after a whistleblower tipped off its auditors. Staffline said yesterday that it was working with HM Revenue & Customs on the issue and had extended a £20 million provision for associated costs by £3.5 million. It also lifted a suspension on trading of its Aim-listed shares, which had been frozen since January 30. They promptly surged by nearly 30%. Trading in the stock had been suspended after auditors at PWC received an anonymous email that made allegations about Staffline’s invoicing and payroll practices. The tip-off, which included a claim about compliance with national minimum wage rules, arrived the night before the accounting giant had been due to sign off on the recruiter’s accounts. PWC immediately delayed its audit and the company warned that it would postpone its annual results.

Lender to help dig Sirius out of a hole. The developer seeking to build a big fertiliser mine beneath the North York Moors is in talks with a lender over a new funding model. Sirius Minerals (SXX)FOLLOW has been in negotiations with potential lenders for months to try to secure the $3 billion of debt financing it needs, along with a further $600 million, to proceed with the project near Whitby. Sirius said yesterday that it had “received a conditional proposal from a major global financial institution”, which it believed may offer “a more flexible and attractive solution”. It said that it was pausing talks with other parties to pursue the new proposal, for which it hoped to secure firm commitments by next month. It offered few details, but it is believed that the new proposal would not be dependent on securing government loan guarantees, which were crucial for its original funding plan.

EnQuest (ENQ)FOLLOW sinks after Cairn Energy (CNE) FOLLOWcuts estimate of North Sea field’s reserves. A dispute has broken out between two North Sea companies over how much oil can be produced from a field they co-own. Shares in Enquest fell sharply after Cairn Energy cut its estimate of reserves at the Kraken field by almost a fifth and cut the value of its holding in the project by $166 million. Enquest, the operator and majority owner of the field, said, however, that its estimates of reserves remained “materially unchanged” and that it did not intend to write down the value of its own stake

The boss of mattress maker Eve Sleep PLC (EVE) FOLLOWshook up the management team amid a dramatic turnaround plan. Abid Ismail and Felix Lobkowicz, finance and operations chief respectively, will leave and chief brand officer Kuba Wieczorek will move to a part-time consulting role under the plans by new boss James Sturrock. The company also said it would end a commercial relationship with mattress-seller Dreams – just 18 months after the partnership began – as it announced that its pre-tax loss had widened by 1.3% to £20.3million. But revenue rose by 25% to £34.8million.

A raid on Debenhams (DEB) FOLLOWby Mike Ashley would leave his current company Sports Direct International (SPD)FOLLOW in the hands of an inexperienced finance boss, analysts at Jefferies have warned. Billionaire tycoon Ashley last week said he wants to sack almost all of Debenhams’ board and become its chief executive while standing down at Sports Direct. He plans to leave the company in the hands of deputy chief finance officer Chris Wootton. But Jefferies analysts said the plot has raised eyebrows. They added: ‘Wootton may be a rising star (we do not know him) but we note he has been a deputy chief financial officer for barely a year, a chief accountant for only a year, and around three years ago was still just a manager at PwC. That is a rapid rise to the top of a listed company.’

AIM-listed miner Greatland Gold (GGP)FOLLOW has inked a £50million deal with Australia’s biggest gold producer, Newcrest, sending shares up more than 20%. The agreement will see Greatland’s gold and copper site in Western Australia explored and developed by Newcrest over six years. Newcrest will have the right to acquire up to a 70% interest in the site, and intends to process ore at one of its plants nearby.

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