Afternoon Financial Press Review
Below are the key headlines from today’s updated papers, featuring the Financial Times, The Times, The Telegraph, The Daily Mail & more - see the full Press section here.
Italian police: BT’s UK bosses ‘knew about accounts scandal’. The £530 million Italian accounting fraud that eventually claimed the head of former chief executive Gavin Patterson may have had its roots much closer to home than the telecoms company has previously admitted, prosecutors allege. BT had always claimed the fraud, which involved inflating earnings in Italy over several years, was a local matter. The head of the European arm Corrado Sciolla was forced out after BT shareholders saw their shares fall by almost a third as it disclosed the scandal in January 2017. Patterson admitted investors were furious and finally left the company after 14 years this year. Now emails between top executives of BT and the managers of the Italian arm appear to contradict the company claims that London knew nothing of the accounting skulduggery.
Ferrexpo under fire over the fate of charity funds that could have been “misappropriated”. management was feeling the heat today as the embattled iron ore company admitted funds it gave to a charity in Ukraine could have been “misappropriated”. The findings were made by its auditors Deloitte, which in February launched an investigation into charity Blooming Land’s use of Ferrexpo’s funds. The London-listed Ukraine-focused company said: “The independent review committee cannot yet conclude the ultimate use of the funds by the charity. However, there are indications some could have been misappropriated.” The investigation shines a spotlight on Ferrexpo chief executive Kostyantin Zhevago, who is a billionaire and a politician in Ukraine.
The boss and co-founder of saw a near-five fold increase in pay to £4million last year as he benefited from a continued rise in the company’s fortunes and share price. Tim Warrillow, who co-founded the posh mixer maker with Charles Rolls in 2005 and is the company’s chief executive, saw his pay packet jump from £844,000 in 2017 to £3.98million in 2018. Most of the rise, or just over £3million, is down to the introduction of a long term incentive plan that links pay to the company’s performance, with the award based 75% on turnover and 25% on underlying earnings. The rest of the pay package consists of basic salary of £368,000 and a bonus of £552,000. It comes as the group saw revenues rise 40% to £237.4million last year and pre-tax profits grow 34% to £75.6million compared to 2017.
British Land in £429m Sainsbury’s superstores sell-off. Property giant on Tuesday slashed its exposure to struggling out-of-town hypermarkets, with a £429 million deal to offload the bulk of its Sainsbury’s superstores. A joint venture between the FTSE 100 firm and Sainsbury’s has agreed to sell 12 shops to US investor Realty Income Corporation, which makes its UK debut. After debt and other costs are paid, the sellers will respectively get £95 million and £133 million. The exit comes 11 years after British Land and Sainsbury’s teamed up. Since then the supermarkets industry has grappled with competition from discounters Aldi and Lidl, and a number of shoppers using smaller High Street convenience stores.
Shares in jumped 17% today after reports over the Easter weekend that predators have made tentative approaches to buy some or all of the British holiday company. Potential buyers including China’s Fosun and US private equity firm KKR are reportedly considering buying its tour operating business – and even the company outright. Thomas Cook shares rose 17%, or 4.17p, to 28.67p in morning trading as the markets reopened after the long weekend. The takeover interest comes after Thomas Cook announced a potential sale of its Condor airline. One insider cautioned that the approaches were ‘highly preliminary’. It was unclear whether the company would be forced to confirm the bids.
Taylor Wimpey boss scraps plan to buy cut-price flat for himself. The boss of housebuilder on Tuesday backed down over the controversial purchase of one of his own firm’s luxury flats after outrage over his £436,000 discount on the central London property. Chief executive Pete Redfern was aiming to buy the £2.5 million flat in Wimpey’s Palace View scheme next to Lambeth Palace, which has views over the Houses of Parliament. Redfern, who earned £3.2 million last year, was using a staff discount, which knocks 5% off the price of a property for the firm’s workers, up to the value of £100,000. An internal audit of a softening London market also cut another £336,000 off the value of the flat, allowing him to buy an apartment originally valued at £2.48 million for just £2.04 million.
Shares in jumped today after the fishing equipment retailer reeled in strong sales at the start of the year. Despite a slump on the high street, like-for-like store sales at Britain’s largest fishing tackle retailer rose 28.5% in February and March, with total sales up 50.7% compared to the previous year. And while many other retailers are shutting down shops, Angling Direct opened a new store in Nottingham this month, bringing the total number of UK stores to 27. It said it was on track with its store roll out programme, with another 20 stores in the pipeline for the rest of the year. Boss Darren Bailey said: ‘Whilst other areas of the retail sector may be experiencing difficulties, we are delighted that our strategic focus on customer experience and service, as well as positioning our stores in the correct locations, is driving our growth and brand value.’
No-deal Brexit will not ruin Britain, says ratings agency. Britain can withstand a no-deal Brexit without major concern for its AAA credit rating, according to the world’s fourth largest credit ratings agency. “The UK economy and its institutions are resilient enough to withstand any foreseeable Brexit-related scenarios without seriously injuring its credit profile,” said DBRS, a Toronto-based agency founded in 1976. The vote of confidence follows warnings from the three top ratings agencies that the UK would be downgraded in the event of a disorderly Brexit. A sovereign rating is a measure of a country’s financial strength and a downgrade risks raising borrowing costs for the government.
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