Press | Vox Markets
SMDS
Food and drinks suppliers could get a worse deal on their packaging if Smith (DS) (SMDS) sells part of its business to Liqui-Box, the competition watchdog has found. US-based Liqui-Box is trying to buy the FTSE 100 firm’s rigid and flexible packaging business for an enterprise value of $585m (£468m) under a deal announced in March. The Competition and Markets Authority (CMA) said on Friday it was concerned that the deal could lead to less choice for customers and higher prices, especially as there are very few large suppliers in the UK market. The regulator said a reduction in competition could lead to lower quality products or poorer service. An initial investigation by the watchdog found that Liqui-Box and DS Smith are two of the four main suppliers of bag-in-box packaging in the UK, used for products such as wine. The firms must propose plans acceptable to the CMA on how they can address its concerns or it will open an in-depth investigation.
WPP
Shares in advertising giant WPP (WPP) suffered as investors fretted it may suffer similar headwinds to those that caused its French rival Publicis to cut its sales outlook for the rest of the year. Online and social media advertising have shaken up the marketing industry in recent years, hitting agencies like WPP and Publicis hard. WPP, which sold its market research arm Kantar to Bain Capital for £2.5bn last week, shed 21p to 916.8p.
TUI
TUI AG Reg Shs (DI) (TUI) was lifted as analysts perceived an increased probability of the firm being compensated by Boeing for costs incurred due to the grounding of its 737 Max fleet. The improved outlook came after the American manufacturer took a $4.9bn charge in its accounts on Thursday to deal with the costs of the model being taken out of service following two crashes which claimed the lives of 346 people.
SXX
Sirius Minerals (SXX) announced plans for a $500m bond issuance to fund the construction and development of a mine in North Yorkshire. The site will yield polyhalite, a mineral used in the production of fertilisers. The bonds will sit alongside a much larger private credit facility to help fund the project.
HSBA
The collapse of Jamie Oliver’s Italian restaurant chain has left creditors facing losses of £83 million. According to the joint administrators’ report for Jamie’s Italian, the biggest loser is HSBC Holdings (HSBA), which had provided £39.4 million to the company in the form of secured debt against the chain’s 23 restaurants across the country. Mr Oliver is also significantly out of pocket. Jamie Oliver Holdings, which contains his successful publishing, broadcasting and licensing interests, provided £18.3 million of secured loans on which it will suffer a shortfall of about £16 million.
ASC
Hedge funds have made an estimated paper profit of £150 million by shorting shares of ASOS (ASC)s during the past year after the online fashion retailer issued three profit warnings. The company’s stock is down by 65% over the last 12 months, with investors taking fright about the challenges of making money from selling clothes online. Nick Beighton, chief executive of Asos, insisted this week that there was still demand for its clothes, but warned the business had run into logistics issues in Europe and the United States.
SXX
The developer of a fertiliser mine under the North York Moors launched a $500 million high-yield bond yesterday as it seeks to unlock crucial funding for the ambitious venture. Sirius Minerals (SXX) is looking to raise the money to access a further $2.5 billion credit facility from JP Morgan. The company wants to put together a combined $3.8 billion of financing by the end of September to help it start to produce fertiliser in 2021. It completed a discounted $425 million share placing and a $400 million convertible bond offering this month.
ACA
A troubled Tanzanian goldminer has agreed to its majority shareholder taking it over again after an improved $428 million offer to buy out minority investors. Acacia Mining (ACA) said that its board would recommend the all-share offer from Barrick, of Canada, to buy the 36% of the company that it does not own as hostility from Tanzania is casting doubt on its survival as an independent. Acacia was spun out of Barrick and was listed in London as African Barrick Gold in 2010. The FTSE 250 company has been in a dispute with Tanzania for the past two years after the government slapped an export ban on gold concentrate and demanded $190 billion in alleged back taxes.
AZN
After AstraZeneca (AZN) set aside up to £12 million this week for former employees at the collapsed Avlon drugs factory, there was an outpouring of emotion from its staff. On a Whatsapp group and on Linkedin, the social network, where employees have been helping each other to find new jobs, there were “a lot of people who were saying this is life-changing”, said one female employee of 18 years who was reduced to tears. Another, who had worked at the Avlon site for 12 years, said that “there has been little regard for employees, some of whom had given a lifetime’s service. As a single mum to a pre-schooler, I have been unable to find comparable part-time work.” Astra’s decision on Wednesday to create a fund to ensure that staff receive their enhanced redundancy payments came after three days of criticism from MPs, Unite, the trade union, and employees after The Times had helped to bring the dispute to light.
BME
TSCO
SBRY
MRW
MKS
The march of the discounters across the retail landscape is continuing apace, with cut-price chains planning to open three times as many shops as their traditional rivals next year. Discount chains including Lidl, Aldi, B&M European Value Retail S.A. (DI) (BME), The Range, Wilko, Home Bargains, Poundland and Jack’s, Tesco’s cheaper offering, have planning permission for 190 new stores next year, according to analysis by Barbour ABI, the data provider, for The Times. By comparison, the Big Four supermarkets — Tesco (TSCO), Sainsbury (J) (SBRY), Asda and Morrison (Wm) Supermarkets (MRW) — have plans for ten shops, while a wider group of traditional retailers that includes Marks & Spencer Group (MKS) and Waitrose plan to open fifty-two stores. Leading supermarkets called a halt to their “space race” five years ago. Tom Hall, chief economist at Barbour ABI, said that the rise of the discounters reflected “people trying to get the most out of every pound. With wages [increasing] just above inflation, customers are seeking the best value for money, which the likes of Lidl, Aldi and B&M Bargains are taking advantage of.”
BKG
The chairman and founder of Berkeley Group Holdings (The) (BKG) has sold a fifth of his stake in the business for £37.2 million. Tony Pidgley, 71, the former Barnardo’s boy who created one of Britain’s most profitable housebuilders, sold a million shares in the company. Mr Pidgley, who is the third largest shareholder, trimmed his 3.6% stake in the business on Thursday, according to a regulatory filing released to the stock exchange last night. He still owns 3.6 million shares worth about £135 million at last night’s closing price of £37.56.
SSPG
The fallout from the worldwide grounding of Boeing 737 Max aircraft has hit airport restaurants, knocking sales at the owner of Upper Crust and Ritazza during its third quarter. SSP Group (SSPG) runs 2,600 concessions at 140 airports and 280 railway stations in 33 countries. The business, which also operates Yo! Sushi, Burger King and Starbucks under franchise in the travel sector, has 37,000 employees. The restaurant and café chain said that some of its airport shops, particularly those in the United States and Canada, had been “impacted by the grounding of Boeing 737 Max aircraft and the transfer of passengers away from our terminals”.
WPP
Publicis, one of the main rivals to the London-listed WPP (WPP), rattled the advertising world on Thursday evening when it warned after markets had closed that it was cutting its guidance for revenue growth this year after a tough second quarter for its operations in the United States. Shares in Publicis slumped by 6.5% in Paris yesterday and those of WPP slid 21p to 916¾p amid fears that the French business’s disappointing update did not bode well for the British company’s prospects. WPP is led by Mark Read, who took charge last September and is seeking to revive the group’s fortunes as it faces mounting rivalry from Silicon Valley-based technology companies such as Google, the search engine group, and Facebook, the social network. Companies that traditionally would have turned to advertising agencies are starting to go directly to technology companies instead, putting pressure on the likes of Publicis and WPP.
TUI
TUI AG Reg Shs (DI) (TUI) up 39¼p to 804p was the biggest gainer on the Footsie amid optimism that the tour operator is in line for compensation from Boeing after the aerospace company said that it was taking a $4.9 billion charge in the wake of the grounding of its 737 Max aircraft. Tui has 15 of the aircraft in its fleet and Boeing said that the charge would cover compensation for airlines.
AML
Aston Martin Holdings (AML) motored 27½p higher to 990½p after Investindustrial, the carmaker’s biggest shareholder, said that it was pressing ahead with a plan to lift its 31% stake by a further 3% by acquiring more shares from other investors. The Italian private equity group had revealed this month that it was considering adding to its stake in a move taken as a show of faith by other shareholders, who have endured a torrid time since Aston Martin’s flotation last October. The stock is down 48% from its £19 float price.
AMER
Amerisur Resources (AMER) was a stand-out gainer among the tiddlers on Aim amid excitement that the Colombia-focused oil and gas explorer and producer is on the brink of a takeover. The company said that it was putting itself up for sale after receiving approaches from suitors interested in buying either all or parts of its business.
ASC
Lombard – ASOS (ASC) profit warnings come as fast as its fashions. Warehousing problems for the ecommerce group add to December’s margin woes
Mirror parent in talks to buy former Johnston assets. UK publisher Reach Plc (RCH) confirms discussions to buy some of the titles
EIG
Slug and Lettuce owner to buy pub group EI Group (EIG) in £3bn deal. Private-equity owned Stonegate continues acquisition-fuelled growth
EIG
Lex – EI Group (EIG)/UK pubs: from tears to cheers. Buyout represents a partial victory over self-induced adversity
EZJ
RYA
easyJet (EZJ) hires Ryanair Holdings (RYA) executive as chief operating officer. Revenues at low-cost carrier grow despite intense competition in short-haul market
ASC
ASOS (ASC) shares plummet on third profit warning in 7 months. Online fashion retailer blames botched rollout of new warehouses in the US and Europe
ISAT
The bidder behind the £2.5billion takeover of Inmarsat (ISAT) has pledged to keep its key operations in Britain. In a legally-binding agreement with the Government, private equity group Connect promised to protect the satellite firm’s base in London and maintain its engineering expertise. The pledge will be seen as an attempt to woo ministers as they prepare to weigh in on the takeover. Competition officials referred the deal to Digital, Culture and Media Secretary Jeremy Wright earlier this week over public interest issues, thought to be a reference to Inmarsat’s sensitive work for the UK and American militaries. Connect – a consortium which includes UK-based Apax Partners, US-based Warburg Pincus and the Canada Pension Plan Investment Board – said the undertakings to the Government are not related to the separate probe being conducted by the Competition and Markets Authority.
EIG
Stonegate – the company behind Slug and Lettuce, Walkabout and Yates – is on the verge of snapping up Britain’s biggest pub company, EI Group (EIG), for £1.28billion. The deal means TDR Capital, Stonegate’s private equity backers, will add 4,000 pubs and properties to its portfolio and become the county’s biggest pub operator. Stonegate has plumped for a bid of 285p a share for Ei, previously known as Enterprise Inns, which is 38.5% higher than the latter’s closing price on Wednesday, and 26.8% above its highest closing price over the last decade. A year ago, Ei shares were hovering at around the £1.57 mark. The offer values Ei at £2.96billion including debt, which is 11.4 times its underlying earnings for 2018. According to its 2018 annual report, Ei’s net debt stands at £2billion. The all-cash deal, which will see yet another London-listed firm snapped up by a private equity house, will be put to a vote of Ei shareholders but is unlikely to face any opposition, with the board recommending the deal.
BOKU
Boku, Inc (DI) Reg S (BOKU) expects revenues to jump more than a third in the first six months of 2019. The business said that monthly active users rose by 48%, to 15.3m, between January and June. Boku, which is based in San-Francisco, lets users make payments through their mobiles. It then charges them via their phone bills.
EZJ
RYA
easyJet (EZJ) has triumphed in the latest round of the battle of the budget airlines. It has poached a chief operating officer, Peter Bellew, from the same role at Ryanair Holdings (RYA) – a veritable coup for the Luton-based carrier. The 54-year-old is highly regarded in airline circles for helping Ryanair recover from its disastrous 2017-18 winter, when a timetabling bungle meant the firm had to cancel around 2,000 flights. Bellew worked for Ryanair for nine years, then left for Malaysia Airlines where he was chief executive, before returning to the Irish carrier in December 2017 when it was in its tight spot. EasyJet’s revenue rose by 11% to £1.8billion between April and June, while passenger numbers increased by 8%.
GRG
After the success of Greggs (GRG) vegan sausage roll and its almost baker’s dozen of profit upgrades, it might at first seem surprising that Peel Hunt has downgraded the stock rating from ‘hold’ to ‘reduce’. Peel Hunt analysts said its half-year results ‘will be magnificent’ on July 30 and the bakery chain will probably raise profit forecasts once again. But they are of the view that the market is already well aware this is coming. They have urged investors to take profits here because the shares are ‘priced for perfection’ and might soon start to tumble.
FRES
Mexico-focused precious metals miner Fresnillo (FRES) was by far the biggest faller, sliding 9.1%, or 81.6p, to 813.4p, after brokers at Macquarie kept an ‘underperform’ rating on its stock. They said they are unconvinced by a turnaround push at the firm, which lowered its gold and silver production guidance on Wednesday.
 
EVE
Shares in mattress company Eve Sleep PLC (EVE) have lost some of their bounce in another blow for troubled fund manager Neil Woodford. Revenue at the AIM-listed firm slipped by 8% in the first half of the year to £12.9million. Shares fell 14.2%, or 1.25p, to 7.55p, wiping more than £1million off Woodford’s 31.2% stake. Woodford, whose struggling Equity Income fund is still suspended after running out of ready cash to repay departing savers last month, was an early investor in Eve before its stock market listing in 2017.
Reach Plc (RCH), the publisher behind the Mirror, Express and Star newspapers is in takeover talks with the owner of The i and a string of regional titles. Shares fell 1.5%, or 1.2p, at 79.8p, after it said it is looking at assets held by JPI Media but cautioned there is no guarantee a deal will be struck. JPI put itself up for sale earlier this year after falling into administration in 2018.
EIG
Fears have been raised that time has been called on the traditional British boozer after buyout giant TDR Capital made a £3bn swoop on the country’s biggest pub estate. EI Group (EIG), formerly called Enterprise Inns and boasting 4,000 pubs, struck a deal with Slug and Lettuce owner Stonegate – the branded bar chain group that TDR launched in 2010. The takeover values Ei’s shares, listed on the London stock market, at 285p each, a 38% premium to their pre-bid price. While netting some Ei shareholders a more than tenfold return on their investment, campaigners warned that the deal was the latest chapter in shrinking of the country’s traditional watering holes. It could lead to many pubs being closed and the end of the centuries-old tenanted business model, they said. Meanwhile, fears were raised over pubs would soon be concentrated in a small handful of pub companies. Stonegate said that its lawyers will write to competition authorities to seek permission for the deal.
ISAT
The private equity companies bidding to take over Britain’s largest satellite company Inmarsat (ISAT) have put forward a number of “voluntary undertakings” to secure a deal with the British Government. Connect Bidco, a consortium including buyout giants Apax Partners and Warburg Pincus, said it would ensure that the majority of key strategic decisions are made within the UK and that key parts of its global network operations would remain in the country. Other legally binding commitments included supporting Inmarsat’s role as leader in the space sector. The news comes just two days after the Competition and Markets Authority started an investigation into the $3.4bn (£2.6bn) takeover to see whether the move would lessen competition in the market.
VOD
Brussels has given Vodafone Group (VOD) the green light for its $22bn (£18bn) takeover of parts of Liberty Global’s cable networks, clearing the way for the most valuable European telecoms merger in more than a decade. Competition regulators have been scrutinising Vodafone’s planned takeover of Liberty’s central Europe and German networks for months amid concerns it would lead to “higher prices, less choice and reduced innovation in telecoms and TV services for consumers”. The European Commission had, in particular, focused on what the takeover would mean for the German market, and whether it would reduce investment and broadcasters’ bargaining power in the region. In a statement on Thursday, Competition Commissioner Margrethe Vestager said the approval was “subject to remedies designed to ensure that customers will continue enjoying fair prices, high-quality services and innovative products.”
AZN
GSK
President Trump’s promise to lower prescription drugs prices has hit the buffers. His most-ambitious proposal, targeting rebates given to middlemen in the country’s highly complex medical system, has been abandoned. The plan looked likely to backfire and result in higher insurance premiums for the country’s seniors, so it was withdrawn last week. With other options apparently limited, pharmaceutical companies such as AstraZeneca (AZN) and GlaxoSmithKline (GSK) are now firmly in the sights of Democrats vying to become the candidate in next year’s presidential election. Cash flows – and therefore dividends – could be at risk. Democrat presidential candidates are seeking to cap the price that drugs companies can charge – and it looks like president Trump may move in this direction too, despite objections to “price controls” by many in his party. In March, he promised that Republicans were about to become the “party of healthcare” yet he has little to show on this front during his tenure in the Oval Office.
EZJ
Investors in easyJet (EZJ) received a lift yesterday after the low-cost airline announced it had poached Ryanair’s chief operations officer, Peter Bellew, and allayed fears of weak summer trading amid overcapacity in the European short-haul market. Revenue at the Luton-based airline jumped 11.4% to almost £1.8bn in the three months to the end of June as passenger numbers rose 8%. It generated average revenue per seat of more than £61. The update was “upbeat … particularly against a tough economic backdrop and troubles at other airlines,” said Arlene Ewing, investment manager at Brewin Dolphin. “EasyJet remains a very well-placed and soundly financed airline operator,” she added.
BATS
IMB
Big tobacco received a boost after US-listed Philip Morris lifted its full-year profit forecast higher than even the most bullish analyst predictions following a strong second quarter. British American Tobacco (BATS) advanced 179.5p to £31.04, a rise of more than 6%, while Gauloises-maker Imperial Brands (IMB) added 46p to close at £21.42.
ITV
ITV (ITV) gained ground after a note from analysts at Liberum suggested that an acquisition of the Love Island broadcaster by Netflix could help the US streaming service to increase its presence in the UK market. “Content is to a pay-TV provider as oil is to a car, and if Netflix does not have sufficient content, then there is little reason for new subscribers to sign up,” they said.
MONY
Moneysupermarket.com Group (MONY) said it grew revenues by 15% to almost £200m in the first half of the year. The price comparison site maintained its guidance for the rest of the year but fell 32.9p to 369p after Peel Hunt downgraded the shares to “hold” from “add”, with the shares already well in excess of its 350p target price.
RMG
Questor: after the shock of Royal Mail (RMG) dividend cut, a rather more reassuring update. Questor Income Portfolio: ‘Nothing has changed’ was the company’s message to shareholders this week.
ASC
ASOS (ASC) lost almost a quarter of its value yesterday after a bungled warehouse overhaul knocked the online retailer’s sales growth off course and prompted its third profit warning in a year. Investors fear one of the brightest names in retail is coming under intense pressure from rivals while its investment-hungry business model stumbles. Yesterday’s warning sent the shares down by 636p to £21.07, meaning the company’s value has fallen by 65% this year. Investors appeared to be unmoved by the chairman Adam Crozier’s attempt to support the business by buying £100,000 worth of shares. Asos said that its pre-tax profit will now be about £30 million to £35 million this year, £20 million less than analysts expected. Total sales grew 12% to £919.8 million in the four months to June 30, far below its typical growth rate of 25%.
EIG
Britain’s pub industry is set for a shake-up after the company behind Yates’s, Walkabout and Slug and Lettuce agreed to buy EI Group (EIG), the largest owner of tenanted pubs in the country, in a £3 billion deal. Ei Group, formerly called Enterprise Inns, said it had agreed a 285p-a-share deal with Stonegate Pub Company valuing its equity at £1.27 billion. Including its net debt, the takeover equates to an enterprise value of £2.97 billion. The combined business will have almost 5,000 bars and pubs, making it the largest company in the industry. Ei Group has just over 4,000 pubs, the vast majority freehold, and at its recent half-year results it declared the value of its property assets at £3.3 billion.
ISAT
The consortium of investors seeking to buy Britain’s largest satellite company has made legally binding commitments to the government to protect the future of its UK operations. Apax and Warburg Pincus, the private equity firms, and two Canadian pension schemes agreed a £2.6 billion takeover of Inmarsat (ISAT) in March. After talks with the government, the investors said yesterday that they had given three-year voluntary undertakings, including that they would “support Inmarsat’s continued role as a leader in the space sector”, ensure that “the majority of key strategic decisions . . . are taken in the UK” and maintain its global network of operations centres in the UK. The buyers also said that the consortium would provide Jeremy Wright, the digital secretary, with “annual written notice confirming its compliance with the undertakings”.
Estate agents should be overseen by a new independent regulator, a government-backed inquiry has recommended. The working group also called for mandatory qualifications for estate agents, a code of practice and transparency over charges. Complaints about the sector have been rising and a survey by Ipsos Mori found last year that more than two thirds of the public don’t trust estate agents. The Property Ombudsman, a public redress scheme, received a record 29,000 enquiries last year, up 22% on the previous year. The industry is self-regulated by trade organisations such as the Royal Institution of Chartered Surveyors (Rics). Most of the laws that apply to estate agents are policed by local trading standards officers, who focus on individual criminal cases.However, the government is looking at ways to crack down on poor practices and ensure all estate agents are properly trained, qualified and licensed under a single set of rules. Ministers established a working group in October to develop the plans, chaired by Lord Best, a crossbench peer and former boss of the Joseph Rowntree Foundation.
EZJ
easyJet (EZJ) has hired a key lieutenant of Michael O’Leary at Ryanair and announced better-than-expected revenues during the spring and into summer as it used artificial intelligence systems to give it the confidence to keep its fares higher for longer. The airline announced an 11% rise in revenues to £1.76 billion in the three months to the end of June, despite carrying only 8% more passengers, at 26 million. Average revenues per passenger, a proxy for average fares, rose 3% to £66.70. The company said that it had appointed Peter Bellew as its chief operating officer, who has been doing the same job at rival Ryanair. Mr Bellew has been in the Ryanair job for 18 months although it was his second tour of duty, having worked there heading flight operations and sales between 2006 and 2014. In between he was the chief executive of Malaysia Airlines when it was trying to rebuild its reputation after the twin disasters of the disappearance of Flight MH370 to Beijing and Flight MH17, shot down over Ukraine in 2014.
The owner of the Mirror, Express and Star national newspaper titles is in talks to acquire parts of the rival publisher behind the i and The Scotsman. Reach Plc (RCH), which changed its name from Trinity Mirror last year, said yesterday that it was looking at “certain of JPI Media’s assets”. JPI was put up for sale in May by its bondholder owners about six months after the debt-ridden company was bought out of administration. It is one of the largest local newspaper groups and owns more than 200 local and national newspaper titles, which include The Yorkshire Post and The Portsmouth News.
EVE
Eve Sleep PLC (EVE) cut its losses by 50% in the first half of the year but warned investors that the company expects to miss its annual sales targets. The direct-to-consumer mattress group reported a 50% fall in losses to £5.9 million in the six months to June 30 after it focused on its core markets in the UK, Ireland and France. Group underlying revenue fell by 8% to £12.9 million after a 29% sales slump in France. The warning on sales sent its shares tumbling yesterday, down 1¼p to 7½p giving it a market value of £19.7 million. This compares with an issue price of 101p and a value of £140 million at its float on London’s junior Aim market in May 2017.
BATS
IMB
Philip Morris delivered strong results for the second quarter. The company is on track for the highest percentage increase since April 2015, up nearly 30% for the year, boosted by the popularity of its heated tobacco in Italy, Russia, Ukraine and Japan. The US Food and Drug Administration has also authorised the product for sale in America. London’s investors were willing to cough up to back the trend: British American Tobacco (BATS) added 179½p to £31.04½ and Imperial Brands (IMB) gained 46p to £21.42½.
 
MONY
Moneysupermarket.com Group (MONY) retreated 33p to 369p, after it reported slower sales growth in the second quarter: 6% compared with 7% and 13% in the two quarters before. Analysts at Liberum were satisfied, though, recommending that investors buy the shares. Mark Lewis, chief executive, said: “We grew the business strongly in the first half, already helping households save over £1 billion this year, particularly after the energy price cap came in and then went up. Millions of people faced rising energy bills and we helped many of them to find a better deal, saving them hundreds of pounds in just a few minutes on our sites.”
JE.
Just Eat (JE.) shot up to 625¼p yesterday morning after McDonald’s ended its exclusivity agreement with Uber Eats, but investors had lost their appetite by the afternoon. The shares closed down 7¾p to 616¼p.
GRG
Greggs (GRG) is on track for “magnificent” interims on July 30, according to analysts at Peel Hunt, who said forecasts for the company’s results would be likely to rise but “the market well knows that” so it is time to cash in now. “The shares are now the highest valued domestic bricks-and-mortar retailer by a mile: they are priced for perfection,” the analysts said. They predicted that African swine fever, the contagious disease which is incurable in pigs, will impact pork prices in the UK and Europe significantly.
7DIG
7digital (7DIG) surged 47.2% to 0.27p. The departure of John Aalbers, chief executive, and Julia Hubbard, the chief financial officer, as part of plans to save £1 million a year, was clearly music to dealers’ ears.
SLN
There was plenty of market noise about Silence Therapeutics (SLN) yesterday after the biotechnology company struck a “transformational” deal worth up to $700 million with a larger New York-listed company. The Aim-quoted, Neil Woodford-backed company announced a collaboration with Mallinckrodt in the US. The intention is to develop and commercialise drug targets designed to “silence” a group of proteins involved in the immune system that play a role in the development of inflammation. “These proteins are known to contribute to the pathogenesis of many diseases, including autoimmune diseases,” Silence said. Mallinckrodt gains an exclusive licence to Silence’s SLN500 asset and will provide an upfront payment of $20 million. Depending on milestones being reached, payments could stretch as far as $703 million.
SMP
Tempus – St. Modwen Properties (SMP): Buy on weakness. Increasing success of the strategic shift should lead to much higher dividends
 
SAGA
Lombard – Activist Elliott sees value in ending the Saga (SAGA). Grannies have become tech savvy — and are shopping around
AZN
AstraZeneca (AZN) to pay millions of pounds to former staff. Drug company had been in stand-off with ex-employees over redundancy terms
GVC
GVC Holdings (GVC) online gambling bet pays off as retail business suffers. Ladbrokes Coral owner looks to expand digital to mitigate effects of tighter regulations in UK
SAGA
Activist investor Elliott takes 5% stake in Saga (SAGA). US hedge fund buys into UK insurance and travel group for the over-50s
BT.A
BT Group (BT.A) has sold its London base next to St Paul’s Cathedral for £210million. The deal comes as the telecoms giant overhauls its property portfolio, with plans to shut 90% of offices across the UK and move staff into bigger so-called hubs. The group has been based at BT Centre since being privatised in 1984. But the building has now been sold to Orion European Real Estate Fund for £209.6million, with BT leasing back the site for 30 months while it finds a new home. The deal does not affect BT Tower, a 627ft landmark in central London which is used as a communications hub. Details of its new headquarters will be announced shortly, BT said.
PSN
Toxic developer Persimmon (PSN) was branded ‘crooks, cowboys and con artists’ as yet another scandal unfolded over its shoddily built homes. Persimmon was attacked in Parliament after a block of its flats was found to be riddled with damp, causing misery for families. Robert Halfon, Tory MP for Harlow, said he was horrified by the conditions endured by some of his constituents. During Prime Minister’s Questions he said: ‘Homes built by Persimmon… are shoddily built with severe damp and crumbling walls. In the eyes of my residents, Persimmon are crooks, cowboys and con artists.’ In response, Prime Minister Theresa May said: ‘We expect all developers to build their homes to a good quality standard. These are homes that people will be living in for many years and they deserve those standards.’
DLAR
De La Rue (DLAR) has hit back at an activist investor who wants to oust its chairman amid an escalating row about the future of the beleaguered business. The troubled company, which lost the contract to produce Britain’s blue post-Brexit passports in a humiliating defeat last year, urged shareholders to reappoint its chairman Philip Rogerson at its annual meeting next week. De La Rue’s plea comes as Crystal Amber, the activist fund which owns a 6.3% stake, threatened to call a fresh shareholder vote on Rogerson’s future if he does not step down by next Thursday. The banknote firm said: ‘This precipitous and destabilising Crystal Amber proposal is very clearly not in the best interests of the company. ‘De La Rue already has in place, and is progressing at pace, an orderly succession plan. ‘In stark contrast to the Crystal Amber proposal, this plan helps ensure vital senior leadership continuity, at a time of significant and necessary change in the business.’
SAGA
Shares in Saga (SAGA) surged 13% after it was revealed that activist hedge fund Elliott Management has bought a stake. The move by Elliott, run by ruthless Wall Street billionaire Paul Singer, could herald a campaign for major changes in the troubled British insurance and travel group. Elliott’s 5.1% stake emerged after Saga shares hit all-time lows last month, when bosses warned it was being pummelled by tough competition. The hedge fund is known for tough tactics to force through changes at companies it believes are underperforming. It famously had one of Argentina’s naval ships seized after the Government allowed debt payments to lapse.
GVC
Britain’s biggest bookmaker GVC Holdings (GVC) saw its income from high street betting shops tumble by nearly a fifth after a recent Government crackdown slowed down the takings from its fixed-odds betting terminals. The Ladbrokes and Coral owner said UK retail revenue dropped 19% in the last three months – driven by a 39% plunge in machine sales. However, the firm said the UK hit was not as bad as feared as it was offset by a surge in online sales and international growth. Overall, GVC’s gaming revenues rose 3% in the quarter, and 5% in the first half. Boss Kenneth Alexander said: ‘The transition to a post-£2 stakes-cut environment in UK retail is progressing very well and we believe the Ladbrokes Coral estate is best placed to take market share.’
HOTC
Luxury confectioner Hotel Chocolat Group (HOTC) has hailed a Willy Wonka-esque pace of innovation that helped drive a 14% sales rise over the last year. Boss Angus Thirlwell – who co-founded the firm in 2004 – said that the key to the British chocolatier’s success will be ‘relentless’ innovation to constantly create new products and services. He added that its new lines for summer, including a vegan chocolate lolly, were garnering a lot of attention on Instagram. He said: We are seeing the most prolific new product Instagramming in our history, with Billionaire’s Sundaes, Choc Shakes and Vegan Chocolate-Dipped Lollies generating lots of excitement’. The opening of 16 new stores contributed 5% to the sales rise.
PREM
Mining minnow Premier African Minerals Ltd (PREM) rocketed after it announced the Zimbabwean government has deemed its RHA tungsten mine a priority project. The country’s electricity company, Zesa, has started to upgrade the mine and carry out repair works. Premier is trying to restart production at the site, which was mined at various times during the 20th century. It has ploughed £14million into the project so far.
JMAT
Chemicals maker Johnson Matthey (JMAT) was the biggest faller, down 183p, at 3204p, after it lowered the profit outlook for its biggest unit, which makes pollution filters for cars and trucks.
GFRD
Galliford Try (GFRD) put the market at ease yesterday when it said it expects profits for the year to be in line with expectations – a reassuring note from a firm that issued a warning about profits in April and rejected a bid from Bovis Homes for one of its units soon after.
Rolex seller Watches of Switzerland (WOSG) reported a near-trebling of its profit to £20.1million and 23% rise in group revenue to £773.5million in the year to April 28. Shares rose 3p, to 293p, after it unleashed its maiden results less than two months since floating in London.
EML
Emmerson (EML) rose 0.03p, to 3.85p, after Stagecoach co-founder Dame Ann Gloag increased her stake to 3%. The potash mining firm’s project in Morocco is not in production yet but the US-China trade spat has made it more attractive as countries are now trying to wean themselves off the need to buy agricultural products from the US, and are turning to places such as Brazil to make up the shortfall. Emmerson’s site is in a good spot for transatlantic trade.
HUR
PMO
It was a turbulent day for North Sea drilling firms Hurricane Energy (HUR) and Premier Oil (PMO). Hurricane’s stock dropped 3.5p, to 47p, after its biggest shareholder, Kerogen Capital, sold about a quarter of its stake. And Premier Oil fell by 2.66p, to 78.3p, despite a robust trading update that said its operating costs had been less than expected during the first half –meaning profits will be higher.
SAGA
The struggling over-fifties travel and insurance provider Saga (SAGA) has become the latest target of Elliott Management after the feared activist investor revealed a 5% stake and signalled it could push for a break-up. Elliott, controlled by the New York hedge fund billionaire Paul Singer and his London-based son Gordon, has seized on repeated profit warnings from Saga. It has lost three quarters of its value since its stock market debut five years ago. The famously combative firm, which has campaigned for change in a string of British boardrooms in recent months, wants Saga to consider all options to recover returns for investors, including separate sales of its insurance and travel businesses. Elliott believes that a split would make the two parts of Saga more attractive to potential buyers in their respective markets, sources said.
Reach Plc (RCH) has submitted an offer to buy newspaper empire JPI media, which was put up for sale last year. The company, formerly known as Trinity Mirror, is reportedly interested in acquiring most of JPI in an attempt to create a UK newspaper powerhouse. The value of the indicative offer has not yet been confirmed and might not lead to a formal bid at this early stage. It is understood that others also threw their hat in the ring for parts of JPI’s assets last week, according to Sky News, including Mediahuis, which ­recently agreed a takeover of Ireland’s Independent News & Media, and ­regional publishers such as Archant and Newsquest.
Britain’s biggest seller of Rolex and Cartier watches trebled profits in its maiden results as customers remain unfazed by Brexit blues. Watches of Switzerland (WOSG), which listed on the London Stock Exchange less than two months ago, has 128 stores, including Goldsmiths, Mappin & Webb and Mayors in Britain and the US. Pre-tax profits jumped 180% to £20m for the year to July 17, while revenues increased from £631m to £773m. Like-for-like sales in the UK rose 10%. Chief executive Brian Duffy said the retailer’s more affluent customers, who spend an average of £4,000, were “a little less affected” by political uncertainty and continued to buying Rolex, Cartier, Omega and TAG Heuer watches.While the company’s stores had been underinvested in the past, most of them are now “ inviting, approachable and contemporary”, he said.
DLAR
De La Rue (DLAR) has hit back at activist investor Crystal Amber’s threats to oust the banknote and passport printer’s chairman at next week’s annual meeting as “precipitous and destabilising” for the company. Crystal Amber – De La Rue’s third-biggest investor with a 6.3% stake – warned the company on Tuesday it would call a special meeting unless chairman Philip Rogerson stepped down on or before the July 25 annual meeting. Mr Rogerson has said he will retire after helping find a new chief executive to replace Martin Sutherland, who announced in May that he would quit after overseeing a string of profit warnings and the controversial loss of the company’s contract to print UK passports. Mr Sutherland then threatened to sue the UK Government over the awarding of the contracting to French-Dutch firm Gemalto, but then quickly backed down.
GFRD
Investors in Galliford Try (GFRD) breathed a sigh of relief after the building firm said it was on track to meet full-year profit forecasts following an overhaul of its contract construction business. Graham Prothero said: “The business is now firmly focused on its core strengths of regional building operations, together with profitable operations in highways and water, all of which are now performing effectively.” Analysts at Peel Hunt said the update should “reassure the market” but noted that the company did not provide new details on two contract settlement negotiations, including one relating to an outstanding £38m claim against a client.
JMAT
Chemicals company Johnson Matthey (JMAT) slumped after it announced flatlining sales. Operating profits in the clean air division of the maker of catalytic converters are set to be below last year due to costs being higher than anticipated. The firm said it expected performance “to be more heavily weighted to the second half”. It is one of a number of European firms in the chemicals and automotive sector to hit trouble in recent weeks after a major profit warning from German giant BASF and difficulties for car companies such as BMW and Mercedes’ owner Daimler.
PLUS
Speculation that spread betting firm Plus500 Ltd (DI) (PLUS) could move to acquire New York-listed GAIN Capital sent its shares down 16.4p to 639.6p. Analysts said it could help Plus500’s online retail capability.
BT.A
BT Group (BT.A) has struck a deal to sell its City of London headquarters to a fund managed by private equity firm Orion Capital Managers for £210m as part of a major cost-cutting drive. The former state telecoms monopoly will lease the building for 30 months while it searches for a new, more modern base of operations. The 10-storey BT Centre, across the road from St Paul’s Cathedral, stands on the site of the former Telegraph Office, where Guglielmo Marconi made the first ever public transmission of wireless signals in 1897. The building was damaged during the Blitz and later demolished and eventually replaced by today’s building, which spans 300,000 square feet and was built for BT in 1985. BT had been close to selling the building to commercial landlord Great Portland Estates but the deal is understood to have fallen through in May over due diligence issues.
GVC
Along-expected crackdown on fixed-odds betting terminals (FOBTs) has decimated sales at shops of bookmaking giant GVC Holdings (GVC), the owner of Ladbrokes and Coral. Comparable sales across GVC’s UK betting shops fell by a tenth in the first six months of the year, though the company insisted this was better than it had expected. Returns from its FOBTs, which were subject to a reduction in the maximum stake for half of the period, plummeted 39%. There was a better performance in online gaming, where revenue rose by almost a fifth. Boss Kenny Alexander praised the technology that was driving online sales, saying it provided “unrivalled understanding of the markets in which we operate”. “The transition to a post-£2 stakes-cut environment in UK retail is progressing very well and we believe the Ladbrokes Coral estate is best placed to take market share,” he added.
SIHL
Questor: the 28% fall in this trust’s share price is not all that it seems, so hold on. Questor investment trust bargain: Symphony International Holdings Ltd. (SIHL) is certainly risky but special dividends and the huge discount offer hope for investors
AZN
AstraZeneca (AZN) has set aside up to £12 million for former employees amid mounting criticism about the sale and collapse of its Avlon pharmaceutical manufacturing site near Bristol. The company said the fund, to be administered independently, would ensure staff “receive full severance should the administration of the site not generate enough funds to cover redundancy costs”. The move comes after calls from MPs, including Frank Field, chairman of the Commons work and pensions select committee, for payment and the Unite union, for an inquiry into what it described as “bandit capitalism”.
SAGA
Saga (SAGA) is set to come under pressure to break itself up after an American activist investor revealed it had built a 5.1% stake in the insurance and travel group aimed at the over-50s. The stake purchase by Elliott Capital Advisors comes five weeks after Lance Batchelor fell on his sword as chief executive in the wake of a profit warning in April that wiped a third off the value of the company, and which halved its dividend. Elliott, founded in 1977 by Paul Singer, when 32, has taken on companies ranging from AC Milan football club to Hyundai, Alliance Trust and even the Argentine government. Last year it put pressure on Whitbread to accelerate its break-up, which led to the sale of Costa Coffee to Coca-Cola for £3.9 billion.
DLAR
The beleaguered chairman of De La Rue (DLAR) has refused to resign at the banknote printer’s annual shareholder meeting next week, in spite of growing pressure from an activist investor. Crystal Amber, one of De La Rue’s largest shareholders with a 6.5% stake, is locked in a dispute with the company over its performance, merger and acquisition opportunities and boardroom pay. De La Rue is a leading supplier of banknotes worldwide, employing about 2,700 staff. The activist investor said yesterday that it had advised De La Rue’s board that unless Philip Rogerson, the chairman, “stands down at or before the annual meeting, it is the fund’s intention to requisition an extraordinary general meeting to replace him”.
JMAT
Investors took fright after Johnson Matthey (JMAT), the speciality chemicals company, warned of lower profits in its biggest division, which makes pollution filters for motor vehicles. The FTSE 100 group said higher costs would contribute to the lower outlook for the Clean Air unit and announced the retirement of John Walker, the head of the division. Johnson Matthey said it was still on track to meet its full-year guidance for the group, of mid-to-high single digit growth in operating profits, with stronger performances in other divisions offsetting the decline in Clean Air. However, it said that this would hinge on a stronger performance in the second half of the year.
Watches of Switzerland (WOSG), devoted to shoppers who take comfort in “rational indulgence” has 128 shops, including the UK brands Goldsmiths, Mappin & Webb and Watches of Switzerland and the American jewellery chain Mayors. The group’s Mappin & Webb business traces its roots back to a silver workshop in 1775 and has held royal warrants since Queen Victoria. The company, which listed in London in May, reported a 180% jump in pre-tax profits from £7.2 million to £20.1 million for the year to the end of April. Sales were boosted by a 28% rise in luxury watch sales to £631.4 million, which accounts for 82% of the business. It is the largest UK retailer of Rolex, Cartier, Tag Heuer and Breitling. Brian Duffy, 64, who has been chief executive for six years, said that despite other retailers complaining about a lack of consumer confidence he was seeing “unprecedented demand” for luxury watches as people invest in family heirloom timepieces. “We call it rational indulgence, as they are buying a product that maintains its value and there is a secondary market that means they can always sell it if times get tougher”, Mr Duffy said.
GVC
The under-fire chief executive of GVC Holdings (GVC) delivered a timely riposte to his critics by issuing a forecast-beating trading update on the back of strong online growth. Kenny Alexander, who has faced criticism on several fronts, said that the Ladbrokes and Sportingbet operator’s online division had made “material market share gains” while the hit on its betting shops from the stake cut on fixed-odd betting terminals (FOBTs) had not been quite as bad as feared. In a research note, Morgan Stanley said that the 39% fall in machine revenues was “a little better” than the 43% slump reported by its rivals, suggesting that it was outperforming.
BT.A
BT Group (BT.A) has agreed the sale of its global headquarters in London to a private equity firm for almost £210 million as part of a broader costcutting drive. The FTSE 100 telecoms group said that the deal with a European real estate fund managed by Orion Capital Managers included an initial leaseback agreement of 30 months “during which time BT will move its headquarters to a new London location”. BT said that it “expects to announce details of its new headquarters shortly”.
HOTC
Vegan chocolate ice-lollies and billionaire sundaes have helped Hotel Chocolat Group (HOTC) to record a jump in full-year sales. Hotel Chocolat posted a 14% rise in sales to £132 million for the year to July 1 and said that it expected profits to be in line with expectations, despite investing in 16 new shops, including its first two stores in the US. It is the company’s second foray into America after a failed attempt seven years ago. Angus Thirlwell, chief executive, said it had learnt from when opening in New York. It was working closely with other businesses, such as credit card companies and fashion brands, to broaden its US customer numbers.
BLT
BHP Billiton (BLT) the world’s biggest miner has promised to produce less thermal coal over the next year and process it to improve its quality and cut carbon emissions. BHP said that coal production at its Mount Arthur mine in New South Wales, Australia, would fall by as much as 18%, from 18 million tonnes this year to between 15 and 17 million tonnes next year, as it shifts its focus from the Chinese market to Japan and Taiwan.
BRBY
Burberry Group (BRBY) hit a record high yesterday after the fashion group reported higher than expected quarterly revenue. The results were investors’ first opportunity to quantify the impact of the new chief designer Riccardo Tisci, who joined 18 months ago, replacing Christopher Bailey. One of Mr Tisci’s first changes was to update the brand’s logo for the first time in 20 years and revamp its monogram to feature the initials of its founder, Thomas Burberry, both of which have proved a hit with Chinese millennials.
TALK
TalkTalk Telecom Group (TALK) climbed 3p to 108¾p, after it reported adding 118,000 fibre customers in the past three months, as subscribers upgraded from copper lines to faster services. The company said it was on course to meet its full-year guidance, posting a 1.3% rise in revenue to £387 million in the three months to June, despite poor feedback about its customer service this year.
EZJ
easyJet (EZJ) retreated 15p to £10.34½ before its results today. The airline was relegated from the FTSE 100 last month after six years as the shares slipped to a three-year low of 854¾p, but they were lifted by the news that its rival Ryanair had cut its 2020 growth forecast. Adam Vettese, an analyst at Etoro, said: “Ultimately, Easyjet will need to convince investors of its cost savings plans to demonstrate growth potential.”
GFRD
Galliford Try (GFRD) has defied the downturn in housing sales and prices, reporting that its annual pretax profit would be in line with estimates. Its construction division accounts for half its revenue, with the rest coming from its Linden Homes private housebuilding side and a partnership and regeneration business that develops homes for housing associations and local authorities. It issued a profit warning in April under pressure from ill-fated projects such as the Aberdeen bypass and Queensferry Crossing, Edinburgh. It also rejected a £950 million takeover offer from Bovis Homes. Under Graham Prothero, 57, the new chief executive, it has restructured its construction business, reducing the exposure of Linden Homes to central London where house prices have been weaker. The plan, unveiled in May, promised to deliver £15 million of savings a year from 2021. It expects annual pretax profit to be in the range of £112.7 million to £115.4 million.
NMC
Tempus – NMC Health (NMC): Buy. Ambitious and achieving healthcare provider in an attractive sector whose shares should have further to run
OXIG
Tempus – Oxford Instruments (OXIG): Hold. Signs of strong progress but it is fully priced