Press | Vox Markets
MTC
The strife at Mothercare (MTC) deepened on Friday when it revealed that sales plunged 9% last year and losses rose. Chief executive Mark Newton-Jones believes he can rebuild the business as a “global brand” as “it is now on a sounder financial footing”. He has slashed debts from £44 million to £6.9 million. It has entered a company voluntary arrangement, closed a third of its stores and is trying to grow online. Interim executive chairman Clive Whiley said shareholders deserved to be told “what went wrong” as cash-flow problems were “further fuelled by a fracture in the relationship between the non-executive and operating executives, a breakdown in trust with key shareholders and the appointment of an array of increasingly expensive professional advisers”.
OCDO
MKS
The Ocado Group (OCDO) co-founder going up against his old company has delivered a bloody nose to his rival by poaching a key lieutenant. Jonathan Faiman, who set up Ocado with chief executive Tim Steiner and Jason Gissing nearly 20 years ago, has lured away one of its longest-serving employees to his new venture, Today Development Partners. Jon Hillary, who resigned last week, is one of the most senior staff at Ocado below board level, having joined 18 years ago. He was responsible for developing the online grocer’s logistics and automation processes as its head of development and engineering, as well as the design and build of its network of customer fulfilment centres, complete with robot technology. Latterly he has also been Ocado’s group transformation director as the company sells its tech offering to major retailers around the world. TDP is working with Waitrose on plans to drive online growth following Ocado’s planned £750 million sale of half its retail arm to Marks & Spencer Group (MKS), which leaves Ocado’s long-standing supply partner Waitrose out in the cold. The defection comes two days after M&S unveiled a £600 million rights issue to fund the deal, at a 32% discount. Hillary’s resignation is understood to have caused consternation at Ocado’s Hatfield headquarters, coming during final preparations for the cash call.
SGC
Chris Grayling’s transport department was sued for the third time in a month today as a trio of train giants launched legal action over his decision to bar them from the lucrative West Coast rail franchise. Richard Branson’s Virgin Trains, along with partners Stagecoach Group (SGC) and France’s SNCF, filed a claim with the High Court, claiming the department crippled any chance of a competitive tendering process on that franchise. It comes just weeks after P&O sued the department over Grayling’s ferry fiasco and Arriva and Stagecoach launched actions over the East Midlands franchise. The train operators are heading to court because Grayling had insisted new rail bidders take on billions of pounds in potential pension liabilities, disqualifying those who did not comply.
GSK
GlaxoSmithKline (GSK) revamps incentives for sales representatives. Drugmaker to link bonuses to number of prescriptions written for its medicines
TCG
Thomas Cook Group (TCG) receives offer for northern European business. Ailing UK travel group says Triton offer ‘highly preliminary and unsolicited’
MERL
Lex – Merlin Entertainments (MERL)/ValueAct: buyout no wizard wheeze. Like a grouchy uncle who dislikes roller coasters, US activist thinks the stock is underrated
LLOY
Lloyds Banking Group (LLOY) chief called before parliament over pension payments. António Horta-Osório to appear before MPs before the summer recess
DGE
Diageo (DGE) watching cannabis trend but no need to rush, says chief. Ivan Menezes focuses on spirits as drinks group sets out new financial targets
BME
B&M European Value Retail S.A. (DI) (BME) chief dampens talk of Asda bid. Simon Arora says discount retailer ‘does not need’ M&A for growth
SRP
Outsourcer Serco Group (SRP) to buy US naval systems contractor for $225m. Investors welcome the deal which will expand the company’s business outside the UK
AJB
AJ Bell (AJB) shrugs off Brexit angst with 27% leap in profits. Wealth manager’s shares have rallied sharply since its IPO last year
SBRY
Sainsbury (J) (SBRY) will be banned from revisiting its botched merger with Asda for at least a decade, in a fresh blow for embattled boss Mike Coupe. In a draft order, the Competition and Markets Authority proposed that the two supermarkets should be prevented from attempting to join forces for ten years. Coupe’s job is said to be hanging in the balance after he was criticised for pursuing the failed merger and taking his eye off the day job. Coupe was the mastermind of the tie-up and held secret talks with Asda boss Roger Burnley for two years before the plans were made public. Sainsbury’s recruited former RSA Insurance boss Martin Scicluna to replace David Tyler as chairman in March, prompting speculation that he could order a major overhaul of the supermarket’s top team. Clive Black, head of research at investment group Shore Capital, said: ‘If either Sainsbury’s or Asda thought they could come to revisit this any time soon, then they were living in cuckoo land.’ Black said the fall proved that Sainsbury’s desperately needed to come up with a plan to revive its fortunes.
BT.A
Ousted BT Group (BT.A) boss Gavin Patterson’s final bonus was halved in the face of investor anger. The telecoms group was originally set to pay Patterson a £1.1million bonus for 2019 – but this was cut to £572,000 after shareholders raised concerns. Even after his pay cut this year, however, the 51-year-old still walked out the door with a package totalling £1.7million overall. It included an £847,000 salary and benefits of £46,000. And Patterson pocketed pension contributions of £254,000 – busting guidelines from the Investment Association industry body that say bosses should never get more than 24% of their salary.
YNGA
Young & Co’s Brewery ‘A’ Shares (YNGA) saw its annual profit rise 5.1% to £39.5million, but warned it will be difficult to beat last year’s performance, which was bolstered by the World Cup. The chain saw sales of cocktails soar by 32.1%, while sales of gin rocketed over 35%. Lager sales grew just over 6% and keg ale sales jumped over 22%. The group blamed ‘warm weather’ for its disappointing food sales, which saw its ‘Ultimate Sunday Roast’ sales falter. In the last year, Young’s saw its revenue increase by 8.7% to £303.7million, despite operating against a ‘challenging backdrop.’ The pub group has hiked its dividend by 6% to 20.78p a share and the company’s share price is currently up 1.08% or 20.00p to 1,867.50p. Chief executive of Young’s, Patrick Dardis, said: ‘Our riverside locations, beautiful gardens and growing number of roof terraces meant the business was well placed to take advantage of the fabulous summer weather and the performance of the England football team at the Fifa World Cup. ‘The Christmas trading period was also very strong, with Young’s pubs packed full of seasonal cheer and merriment.’ Looking ahead, Young’s said it remained ‘confident in our winning strategy and our expectations remain unchanged.’
MAB
All Bar One and Harvester owner Mitchells & Butlers (MAB) returned to profit growth in the first half, as the company said its sales had outperformed competitors. Adjusted operating profit rose to £151million in the 28 weeks to April 13, up from £141million in the same period last year. Revenue was higher at £1.19billion, while like-for-like sales climbed 4.1%. The group, which also owns the O’Neill’s pub chain and Toby Carvery among other brands, said its focus on efficiency was responsible for the improved performance. Chief executive Phil Urban said: ‘Success in this highly competitive market is dependent on a continuous stream of improvements, and that is what we are delivering, with many small advances at site level driving significant benefits in aggregate. ‘We will maintain our focus on these initiatives, which we believe are transforming the business.’
TCG
Thomas Cook Group (TCG) has been thrown a lifeline after a private equity firm offered to buy its Nordic operations. The troubled travel operator is in talks with Triton about its businesses in Denmark, Finland, Norway and Sweden, which could be worth hundreds of millions of pounds. It would help steady Thomas Cook’s finances, and end weeks of speculation over its future, which have sent shares plunging 60% so far this year. A spokesman for the firm said it had ‘received a highly preliminary and unsolicited indicative offer from Triton Partners for its Northern Europe business’. It is ‘evaluating this offer alongside the ongoing strategic review of its group airline’, which it has put up for sale. The group’s Nordic businesses include Ving, Tjareborg and Spies and account for one fifth of its workforce.

MERL
A US activist investor has called on Merlin Entertainments (MERL) to secure a deal to take the company private. San Francisco-based hedge fund ValueAct says Merlin’s value would rise by around 30% if it went private. In an open letter to Merlin’s chairman, Sir John Sunderland, ValueAct’s chief investment officer Mason Morfit and partner Jake Welch, said: ‘Private ownership is simply better placed than current public shareholders to underwrite the investments Merlin must make, and to align employee incentives appropriately.’ ValueAct said there was ‘significant private capital interest’ in the company, which could attract a bid of about £4.50 a share. Merlin is currently trading at about 346p a share – having been as low as 304p in October – valuing it at £3.5billion. ValueAct invested in Merlin two years ago, when the shares were trading above 500p a share and the business was valued at £5.5billion.Merlin said in a statement: ‘It remains in the best interests of all its shareholders to continue to pursue its current strategy to create a high growth, high return, family entertainment company based upon strong brands and a global portfolio that is naturally balanced against the impact of external factors.’
BME
B&M European Value Retail S.A. (DI) (BME) plans to open 50 new stores across Britain as it hones in on people’s desire for value shops and bucks the trend of the failing High Street. The Liverpool-based group, which sells everything from food and toys to homeware, saw its annual pre-tax profit increase by 8.7% to £249.4million. The company said the first quarter has started well with mid-single digit like-for-like growth in B&M UK stores. There has been speculation, which has been played down by B&M, that B&M is planning on attempting a reverse takeover of Asda, after the latter’s takeover plans with Sainsbury’s were thwarted by the Competition and Markets Authority.
AURA
Aura Energy Limited NPV (DI) (AURA) was powering ahead as it announced it had produced its first yellowcake, a type of uranium concentrate used to make the fuel for nuclear reactors. Aura said impurities in the product were within acceptable levels prescribed by regulators, meaning it can be sold. Aura is based in Australia, but its uranium project is in Mauritania. The firm also owns a site in Sweden where it plans to mine metals used in batteries.
AJB
AJ Bell (AJB) released a strong set of half-year results, its first as a listed company. Revenue hit £50.1million in the six months to March 31, up 17% on a year earlier, while profit soared 27% to £17.7million. AJ Bell pulled in 16,941 customers over the period, taking its total to 214,853. Andy Bell, chief executive and founder, said that floating on the stock market last December was less about raising extra money and more about raising his firm’s profile, so it could compete with the likes of Hargreaves Lansdown which has more than 1m clients. Bell is still one of the company’s largest shareholders, with a 25.5% stake, but sold around 2.8% of the company when it listed for £651million, pocketing around £18million. Investors, who have seen AJ Bell’s shares rise 169% since the initial public offering, seemed to be taking the chance to cash in their gains.
HL.
Hargreaves Lansdown (HL.) announced that one of its founders, Stephen Lansdown, was selling shares in his company. Lansdown reduced his stake from 10.9% to 9.3%, pocketing around £170million. His former business partner Peter Hargreaves still owns more than a third of the company.
SRP
Serco Group (SRP) boosted its value by announcing it would acquire an engineering business which serves the US navy. Even though Serco announced plans to issue up to 11.2m shares, raising around £130million to help fund the £178million deal.
BOWL
Hollywood Bowl Group (BOWL) continued its series of strikes with investors, with revenues up 5.3% to £67million in the six months ending March 31. Profits rolled in 12.5% higher at £16.4million.
Analysts have warned that Theresa May’s resignation will have a negative effect on markets because of continued political uncertainty and the rising chance of a no-deal Brexit. Her decision follows a revolt over her “new Brexit deal” and growing calls from her MPs to step down. On Wednesday night, Leader of the Commons Andrea Leadsom quit the government, becoming the 36th ministerial resignation during May’s time as PM. Reaction to May’s resignation has been mixed, but the prevailing concern is that the next leader – most likely coming from the Eurosceptic wing of the Tory party – will create an even more fragmented political landscape, spooking markets and meaning more uncertainty for business.
SGC
Sir Richard Branson’s Virgin Trains has launched legal action against Transport Secretary Chris Grayling’s decision to bar it and partners Stagecoach Group (SGC) and France’s SNCF from bidding for the West Coast rail franchise. Claims have been filed with the High Court, challenging the procurement process and calling for a judicial review. The Government failed to adopt a competitive tendering process, it is claimed. The launch of action will come as a fresh blow to Mr Grayling, whose department is already facing legal action from German rail giant Arriva and Stagecoach over the way it conducted the tender of another rail network, the East Midlands franchise. Last month, the Government surprised the rail industry by deeming three of Stagecoach’s bids to be “non-compliant”.
MTC
Mothercare (MTC) will focus on building its global brand and boosting online business in the UK in the next step of its turnaround plan that has resulted in 55 store closures and the loss of 900 jobs. The troubled retailer said the next phase of its transformation in the UK would include “enhanced” credit options and offering more exclusive products. The company, which wants to be a “textbook recovery case”, said it had completed its UK store closure programme and was now on a “sounder financial footing” after coming through a company voluntary arrangement (CVA), a process that allows struggling companies to shut stores and renegotiate rents. It now has 79 stores in the UK, down from 134 a year ago and has saved more than its target of £19m. “We have achieved a huge amount this year, refinancing, restructuring and reorganising Mothercare to ensure a sustainable future for the business,” said Mothercare chief executive Mark Newton-Jones. “The majority of that work is now done, including the completion of our store closure programme, leaving us with 79 stores which are well positioned to support our UK customer base.”
NG.
SSE
The energy regulator has confirmed plans to squeeze £6bn from energy networks over the next decade in a blow to investors already facing the threat of a government power-grab. Ofgem said it will lower energy bills by halving the returns that investors are allowed to make from the 2020s to the “lowest ever capital rate for energy network companies”. Ofgem estimates that these financial levers could reduce an energy bill by £40 a year, from where they might otherwise have been. The UK’s biggest energy companies have warned that the “disappointing” decision risks future investment in the energy system as they prepare to plug in to a boom in renewable power and electric vehicle charging. David Smith, of the Energy Networks Association, said the move will undermine efforts to secure low-cost investment in the grid upgrades, which will be carried out by energy giants National Grid (NG.), SSE (SSE) and Scottish Power.
 
The US Federal Reserve has sent markets a sobering message. It will not bail out the Trump administration as the trade war expands; nor will it come to the rescue quickly if Wall Street wilts. The proverbial “Fed Put” is a long way out of the money at this juncture. The outlook for the US economy will have to take a nasty turn before the Powell Fed cuts interest rates or halts quantitative tightening altogether. “The hurdle for cuts is very high,” said Tom Porcelli, US strategist for RBC Capital and a former Fed official. The Fed minutes released late on Wednesday are something of a shocker for investors who thought they had a monetary comfort blanket for the rest of this year. Futures contracts show markets have been pricing in 50 basis points of rate cuts. The text revealed that “many” members of the voting committee had dismissed the recent soft patch in inflation as “transitory” and largely caused by “idiosyncratic factors”. This amounts to a warning by the world’s hegemonic central bank that it may raise rates. It is an ice-cold douche for fragile markets.
TCG
Thomas Cook Group (TCG) has had an unsolicited offer from a European private equity giant for its Scandinavian business, providing a much-needed boost to its parlous financial situation. Triton, a German-Swedish fund manager that recently bought continental travel agent Sunweb, made a “highly speculative” bid for its Northern Europe division, comprising its tour operator and airline in Norway, Sweden, Finland and Denmark. Its market-leading Nordic brands include Ving, Tjareborg and Spies. Thomas Cook said it was evaluating the offer alongside the ongoing strategic review of its airline, for which it has had multiple bids. A deal would see about a fifth of the the 178-year-old company’s workforce move to a different employer.
BME
The boss of B&M European Value Retail S.A. (DI) (BME) has poured cold water on speculation that the discount chain could launch a reverse takeover of Asda following the collapse of its merger with rival supermarket Sainsbury’s. Chief executive Simon Arora said B&M “was not talking about mergers and acquisitions, we are focused on the potential for organic store growth. We have 620 stores and we are looking at growing the business to 950 so there is plenty of road left on our own. He acknowledged the company had sealed a takeover of cut-price food chain Heron Foods two years ago, but the £152m deal was significantly smaller than the £7bn price-tag attached to Asda. “The business has a very different scale and its discount convenience offer was complementary to us”, he added.
AJB
AJ Bell (AJB) posted a big rise in profits in its first results since floating in December after adding customers and increased the value of assets under management. AJ Bell reported a 27% rise in pre-tax profits of £17.7m in the six months to the end of March while revenues rose 17% to £50.1m, shrugging off concerns about investor sentiment in the face of Brexit and broader economic uncertainty. “This robust financial performance enables us to continue to invest in the platform to achieve our ambition of becoming the easiest platform to use, underpinning our principal purpose of helping people to invest,” said Andy Bell, founder and chief executive. Customer headcount rose 9% from the same period last year while the value of assets under administration rose 3% to £47.7bn.
MAB
Mitchells & Butlers (MAB) reported an 8.7% jump in pre-tax profit to £75m for the six months to 13 April. Revenues exceeded £1.1bn as like-for-like sales jumped by a better than expected 4.1%. The company, which operates 1,700 pubs and restaurants across the UK, was helped by better weather over the period compared with 2018 when freezing weather kept patrons away. “We have momentum,” said M&B chief executive Phil Urban. “It’s the second half of profit growth and, for the external world, we’ve got to have a trend of growing our profits before people will believe it is a trend and not a one-off.” “We’re working on many fronts, many of which will drive incremental sales,” he said of the company’s transformation plan. While most of the changes were “not big in isolation” they would make a significant difference in aggregate, Mr Urban added. The company’s investment in an app that collects feedback and complaints from sites such as TripAdvisor and Google and sends them to pub managers had played a key role in improving sales, he said. The growth of its Miller and Carter steakhouses, was highlighted by Mr Urban as a “standout performer” over the six months.
YNGA
Young & Co’s Brewery ‘A’ Shares (YNGA) cheered increased sales and profits as drinkers continued to opt for more expensive gins and craft beers. The gin revolution continued with sales of the spirit booming by more than a third. The Camden and Beavertown craft beer ranges were also “success stories” with sales now matching those of cask ales, the company said. Pre-tax profits rose 5.1% to £39.5m on sales of £304m in a year that saw Young’s acquire 15 premium Redcomb pubs. While the warm summer and England’s World Cup success, both of which boosted pub revenues last year, had set a “high benchmark” for the coming months, the upcoming cricket and rugby world cups would present an opportunity for pubs, said Patrick Dardis, chief executive of Young’s. Analysts at Stifel said that Young’s was “no sleepy family business” and that it had “some of the more promising growth prospects” in the pub sector.
TALK
Losses at TalkTalk Telecom Group (TALK) narrowed as the broadband provider added almost half a million fibre broadband customers and continued with its reorganisation. The FTSE 250 telecoms firm came close to breaking even in the year to March with a £5m pre-tax loss compared with a £100m loss the previous year. Sales dipped slightly to £1.6bn. The company said it had made “good progress” on cutting cost and becoming more efficient, including moving its headquarters from London to Salford. The move is expected to save the firm up to £30m a year but booked £42m of costs associated with its business reorganisation and simplification. The broadband and TV subscription provider said more customers were taking faster fibre broadband, with 490,000 net sales in the year and a record 152,000 in the final quarter when almost three quarters of new customers opted for fibre.
RMG
Questor: Royal Mail (RMG) inflicts a dividend cut on the Income Portfolio. Do we sell the shares or hold on? Questor Income Portfolio: the postal service is to invest more in modernisation, with income investors taking the pain. This leaves us with an uncomfortable decision to make. Selling now would cement a capital loss that seems out of proportion to the income damage we are sustaining. We will hold on.
SGC
Stagecoach Group (SGC) has started its second legal action against the Department for Transport in less than a month after the bus, coach and train operator was shut out of the bidding process for key rail franchises in a row over staff pensions. In the latest stage of a battle that lays bare the crisis facing the rail franchising system, Stagecoach said today that, along with several consortium partners, it had begun legal action against the DfT after being prevented from bidding for the West Coast Partnership contract. It was joined in its action by the French railways group SNCF and Virgin, part of Sir Richard Branson’s trading empire. The action comes after the DfT blocked all three companies from bidding for the East Midlands, West Coast Partnership and Southeastern franchise competitions. Stagecoach argues that it was unfairly excluded from bidding for the franchises after it refused to take on open-ended pension liabilities for staff. Chris Grayling, the transport secretary, argued that the group had disqualified itself after its submission did not comply with the department’s requirements.
MTC
Mothercare (MTC) surged as the baby and maternity care retailer narrowed its annual losses and cut back its debts as the wider market took in Theresa May’s resignation. Shares in Mothercare surged 2¼p to 22¾p, after it reported a pre-tax loss of £67 million for last year: still in the red but better than the previous year’s loss of £94 million. The company said that it had slashed its net debts from £44.1 million to £6.9 million and completed its shop closure programme: it is now trading from 79 shops, down from 134 the previous year. Mothercare opened its first shop in Surrey in 1961 and used to be the favoured destination of parents-to-be and the mothers and fathers of babies and young children. It has increasingly found itself overtaken by rivals and has suffered the effects of the crisis gripping the high street.
MKS
OCDO
M&S pays £30m fees for Ocado rights issue. Investors in Marks & Spencer Group (MKS) have raised concerns about the £30 million in fees and expenses the retailer is spending on its cash call to finance its food delivery venture with Ocado Group (OCDO). M&S is tapping shareholders for £601.3 million in a deeply discounted one-for-five rights issue. However, under the terms of the share sale, unveiled this week, the retailer disclosed that the proceeds would actually amount to £570.7 million once fees and expenses were paid. A top ten shareholder told The Times that they supported the M&S strategy and the “boldness” of the Ocado tie-up but added: “It is the structure of the deal which has incurred £30 million in fees that might be questioned.”
NRR
New River and Pimco team up to give retail parks some love. NewRiver REIT (NRR) has launched the partnership with Pimco’s Bravo Strategies III, a private equity-style fund, with the acquisition of four retail parks in Aberdeen, Dundee, Inverness and the Isle of Wight for £60.5 million. It plans to boost the portfolio to about £500 million of assets over the next few years. Allan Lockhart, chief executive of New River Reit, said: “Pimco is a global investor so they are looking at pricing globally and areas where there is some dislocation. UK retail is very dislocated and, from a pricing perspective, it is very attractive compared with [other sectors such as] industrial and logistics.”
AJB
Ringing endorsement for AJ Bell in platform’s first results since listing. One of Britain’s biggest investment platforms has posted a rise in profits and revenues in its maiden set of results as a listed company. The flotation of AJ Bell (AJB) has been one of the few success stories of the London stock market in recent months. Shares that were priced at 160p less than six months ago have more than doubled since the initial public offering. The company said pre-tax profits climbed 27% to £17.7 million in the six months to the end of March on revenues that increased by 17% to £50.1 million. Assets under administration were up 3% to £47.7 billion and the number of retail customers rose by 9% to 214,853.
TALK
The fashion for binge watching dramas on Netflix and streaming videos on YouTube has helped TalkTalk Telecom Group (TALK) return to “sustainable” growth. The no-frills broadband supplier said that subscribers were upgrading to faster services amid an explosion in online TV, film and video streaming. “There has been a big switch from copper lines to fibre,” Tristia Harrison, the chief executive, said. Data usage is growing by 40% annually, with video accounting for 60% of that, she said. “Gaming is enormous too,” she added. The surge in fibre subscriptions helped Talktalk to cut its pre-tax losses to £5 million in the 12 months to May 31, from £100 million previously. Turnover fell from £1.65 billion to £1.63 billion but rose slightly after stripping out sales from its closed mobile phone wing.
SRP
Serco to spend £170m on naval deal with Alion to capitalise on Trump warship plans. Serco Group (SRP) is to buy an American naval engineer for $225 million as it seeks to capitalise on President Trump’s plan to build dozens of new warships. The British outsourcer will pay £173 million for the naval systems unit of Alion, a privately held engineering company that provides artificial intelligence, science and technology services to the US military. Alion’s naval systems business employs about 1,000 people who assist in the design of ships and submarines and provide support after they enter service. Customers include the US navy, US army, US coastguard and Royal Canadian navy.
UU.
United Utilities Group (UU.) resists a pop at Labour. Britain’s largest listed water company has declined to criticise Labour’s plans to renationalise it, declaring itself powerless to influence voters. United Utilities reiterated in its full-year results that the threat of renationalisation was a “key area of uncertainty” and that the prospect of being acquired “below fair value” was one of the principal risks facing the company. Steve Mogford, the chief executive, issued a robust defence of its performance as a listed company but would not specify any potential downsides to Labour’s plans. “In the renationalisation environment we are in the political environment there and we are not necessarily going to be able to influence what voters do,” he told The Times. “I think the best thing we can do is focus on performing as a responsible company.”
GSK
GlaxoSmithKline (GSK) is to reintroduce incentive payments for sales representatives in some countries to retain talent after stopping them for years after scandals over illegal sales practices. Glaxo said in a statement that loosening the reins on bonuses would “uphold our ethical and values-led approach to healthcare professionals engagement, in full compliance with laws and policies, while supporting delivery of strong performance”. The company said the partial reversal reflected the shift in Glaxo’s portfolio towards speciality care products such as oncology. The new pay scheme will be focused on those therapeutic areas while remaining more conservative in primary care and vaccines.
MERL
Merlin’s magic has lost spell, says activist investor. An American activist investor is attempting to put Merlin Entertainments (MERL) in play after calling on the theme park operator behind the London Eye and Madame Tussauds to seek out a buyer to take the group private. The group confirmed to the stock market yesterday that it had received the demand from Valueact Capital, a US-based activist known for its turnaround campaign at Rolls-Royce. Valueact, which first declared a holding in Merlin in February last year, has built a 9.3% stake, second only to Kirkbi, the investment vehicle of the family that controls the Lego toy empire. Kirkbi has 29.6% of the Legoland operator.
BME
Concern about B&M European Value Retail S.A. (DI) (BME) German business and a weak period for homeware sales took the shine off the bargain retailer’s improved profit and revenue growth. The aggressively expanding discount chain, which sells goods ranging from groceries, lights, DIY tools and gardening equipment to pet accessories, said that pre-tax profit rose by 8.7% to £249.4 million on revenue 17.1% higher at more than £3.4 billion in the year to March 30. The group said its results were tempered by the weak performance of its homeware lines in the second and third quarters, which prompted an overhaul of the category. In addition, it faced declining profitability at its Jawoll chain in Germany because of its efforts to shift slow-moving stock. “With most of this costly activity now concluded, the Jawoll team are able to offer its shoppers a more compelling product range, utilising B&M’s approach to limited assortment and directly sourced product being the key drivers of our disruptive pricing in the UK,” the group said.
QQ.
Record order book for defence supplier QinetiQ Group (QQ.) Qinetiq has reported a record £3.1 billion order book and says it is on track for further growth next year. Shares in the group rose after it said revenues increased by 9% to £911.1 million in the past financial year, its third successive year of growth. Underlying operating profits edged up by 1% to £124 million and the company increased its dividend by 5% to 6.6p a share. Qinetiq is aiming to increase the share of its income it derives from overseas. Steve Wadey, chief executive, said it had increased its international revenue share from 21% to 30% over the past three years. He added: “We are pleased to report another year of organic revenue growth and record order backlog. Three years since launching our vision-based strategy we have reversed five years of revenue decline and delivered three years of growth.”
RMG
Royal Mail (RMG) slumped to a record low because of fears over its performance and a possible return to state ownership. Ministers were accused of selling the company on the cheap after it floated at 330p a share in October 2013. Within months, they were trading above £6. Since peaking at 631p a year ago, however, they have fallen as a profit warning bolstered concerns. This week, as the political way forward looked distinctly unclear, Royal Mail said that it would invest £1.8 billion in the postal service over five years under a turnround plan aimed at securing the future of the 500-year-old organisation as management warned investors to expect lower dividends. Rico Back, 65, the mid-cap company’s boss, insisted that the decision was not “taken lightly”. News of a lower payout arrived alongside results that one trader described as “pretty mediocre”. Liberum said that profits had been dented by weakness in its UK parcels, international and letters division.
 
BAB
Babcock International Group (BAB) slid to a new decade-low after telling investors that profit and revenue would fall over the coming year. JP Morgan downgraded the defence group from “overweight” to “neutral” and sliced its target price from 772p to 557p.
TUI
WIZZ
IAG
EZJ
Travel and holiday companies led the blue-chip index lower, weighed down by nervousness over weak demand for overseas getaways. A Barclays survey intensified the angst, saying that more Britons are set to choose “staycations” this year. TUI AG Reg Shs (DI) (TUI) closed down by 40p at 740¼p. Wizz Air Holdings (WIZZ) slipped 23p to £30.79. International Consolidated Airlines Group SA (CDI) (IAG), and easyJet (EZJ) bounced back later, however, to finish 6p higher at 478¾p and just a quarter of a penny lower at 927p respectively.
TCG
Triton Partners has bid for the Nordic operations of the troubled travel group Thomas Cook Group (TCG). Shares in the struggling British company edged higher last night, gaining 2% to 12½p, after it confirmed that it had received a “highly preliminary and unsolicited indicative offer” for its northern European division, first reported by Sky News. The division includes its tour operator and airline in Norway, Sweden, Finland and Denmark. “The group is currently evaluating this offer,” Thomas Cook said. “The group has received multiple bids, including for the whole, and parts, of the airline business and the board of Thomas Cook will consider these approaches with the aim of maximising value for all shareholders.” It added that “there can be no certainty” over the prospect of a deal with Triton.
ENQ
Tempus – EnQuest (ENQ): Hold. There is little upside in jettisoning the shares now. Operational and fiscal improvements are coming through steadily
ACA
Tempus – Acacia Mining (ACA): Resist offer. Lowball offer tramples minority interests
MERL
ValueAct urges Merlin Entertainments (MERL) to go private. Activist group sends open letter to chairman of theme park owner to initiate discussions
MKS
Lombard – Marks & Spencer Group (MKS) £600m rights issue is more like a Lidl offer. Fundraising for Ocado venture will not deliver a profiterole or a profit for a while
BAB
Lex – Babcock International Group (BAB)/defence: stock stress monster. Submerged shares will eventually have to rise
MKS
Marks & Spencer Group (MKS) profits dented by turnround costs. Retailer to launch deeply-discounted rights issue to fund Ocado deal
SDRY
Superdry (SDRY) names interim financial head as it overhauls board. Nick Gresham’s appointment comes after boardroom tussle and profit warning
BAB
Babcock International Group (BAB) operating profit drops 47%. Costs take toll on defence contractor and shares fall nearly 10%
SSE
SSE (SSE) aims to offload retail energy business by second half of 2020. Group appoints separate board for unit as it pushes ahead with divestment
RMG
Royal Mail (RMG) cuts dividend as it invests £1.8bn. Investors welcome strategy to increase more parcel deliveries despite payout setback
IGG
IG Group Holdings (IGG) lays out new growth strategy as EU rules hit profits. Markets have welcomed plans to focus on more tailored products and to expand in Asia and the US
MKS
Marks & Spencer Group (MKS) bosses have pledged to rescue the ‘wobbly’ business as profits fell for the third consecutive year. The 139-year-old High Street stalwart unveiled a 10% drop in annual profits to £523million after it took a hit from store closures and restructuring costs. M&S is in the middle of an extensive shake-up as it battles against the slump that has hit Britain’s high streets. The company had already said at least 100 of its joint clothing and food stores would shut by 2022, but the latest figures add up to around 120 closures by 2024. It closed 35 last year and will axe a further 85, along with 25 Simply Food shops. Chairman Archie Norman, who joined in 2017, said: ‘It’s a bit like an egg and spoon race. ‘The more you run, the more it wobbles, and it’s been wobbling quite a lot at the moment.’ Chief executive Steve Rowe said: ‘M&S is changing faster than at any time in my career – substantial changes across the business to our processes, ranges and operations, and this has constrained this year’s performance, particularly in clothing and home. However, we remain on track with our transformation and are well on the road to making M&S special again.’
RMG
Royal Mail (RMG) is the latest major British company to slash its dividend – a huge blow to thousands of small shareholders. It will only pay 15p per share for the year to March 2020, down from 25p this year. The total doled out to investors falls to £150million, from £250million. Rico Back, Royal Mail’s boss, said this would fund £1.8billion of investment over five years to prepare it for a future dominated by internet shopping. Back said: ‘Our decision is not one that we have taken lightly. We have sought to find the appropriate balance between investing in the future sustainability, and shareholder returns.’ The internet shopping boom has prompted Royal Mail to shift towards parcels and away from letters. It has been ploughing cash into new technology to make sorting facilities more efficient. And it is now bringing back the second post because of the parcels boom.
ACA

The parent firm of Acacia Mining (ACA) has proposed taking it off the stock market. Barrick has offered to buy the 35% of shares it does not already own, at a heavily discounted price. The offer is an attempt to end a dispute with the Tanzanian government, which Barrick has been negotiating with on Acacia’s behalf. Barrick’s all-stock deal for 147p per share would value Acacia at £621million – less than the £654million or 159p it was worth on Tuesday before the offer was unveiled. Barrick said a buyout was the best way to break the impasse. Acacia said it was considering the proposal before it makes an announcement. It said it continues to be excluded from discussions between Barrick and Tanzania.

SSE
Energy giant SSE (SSE) has vowed to sever ties with its under-pressure energy supply business by mid-2020 after shedding 570,000 customer accounts over the last twelve months. The Big Six supplier has pledged to either sell or list the energy services arm as a separate business by the second half of next year, appointing a separate board for the division, which will be headed by executive chairwoman Katie Bickerstaffe. The Scottish supplier has also reported that profits have fallen far short of expectations. SSE’s energy services business – which is now reported separately to the wider business – saw underlying earnings crash 68% to £89.6million in the year to March. The group also posted underlying pre-tax profits of £725.7million for the year to March, down from £1.2billion in 2017-18 – a fall of 38%.
HSP
The collapse of British Steel has sparked fears for Hargreaves Services (HSP), a key supplier for eight years. It estimates it has around a £4.5million exposure to British Steel, comprising debts and work in progress. It also employs around 170 people in operations which serve the steelmaker, and could take a £3million hit if it has to make them redundant. Revenue could fall £11million and profit by £1.3million.
PETS
Pets at Home Group (PETS) profits climbed 6.1% to £89.7million for the year to March 28, not including the effects of a £40.4million charge related to the restructuring of its vet business. The retailer said its shops had returned to profit growth faster than expected, and sales were up 5.1%. Rather than trying to rake in more money by selling fewer expensive items, it has cut prices to attract more customers. This squeezed profits slightly. Profit was also knocked by a decision to buy back some of its vet practices, which it had previously run with individual vets. The firm admitted some weren’t performing as well as hoped. It has already spent £21.2million buying back 48 locations, and closed 19 of them. Pets at Home has set aside another £19.2million to pay off more of its vet partners, and will review how many need to close. There has also long been concern over the company’s £135.2million debt pile.
BAB
Babcock International Group (BAB) was under fire after a year of weak performance. Though the results were generally as expected, analysts were alarmed by a 7% dip in Babcock’s 2020 earnings forecasts. It was another disappointment for investors, who are trying to decipher accusations flung at the company by mysterious research firm Boatman Capital. Christopher Bamberry at Peel Hunt called it ‘another downgrade to estimates in a long series of downgrades’, and said it was difficult to imagine a catalyst that would boost the shares, which fell 47.2p, to 460p.
IGG
IG Group Holdings (IGG) was helped by a rise in market volatility. Market volatility, which generally prompts IG’s customers to trade, was relatively low for most of the year. But in the first few weeks of May, volatility began to pick up. So the full-year revenue is expected to be around £475million, better than investors had been predicting. IG also set out plans to boost revenue by 30% by 2022.
FCH
Funding Circle (FCH) was forced to clarify changes to its executive pay policy, which will be voted on by shareholders in June. Rather than allowing its bosses’ bonuses to be decided by looking at other FTSE 250 companies’ pay policies, Funding Circle is capping the bonus for its chief executive at £2million per year and for its chief financial officer at £1.1million. Boss Samir Desai has already decided to waive his bonus as shares are trading 42% lower than they were when they hit the stock market last September.
BOOM
Property tycoon Nick Candy has upped his stake in podcast maker Audioboom Group (BOOM) after it ran to investors for cash. He now owns 25% himself, and another 24% through his investment firm Candy Ventures. Audioboom ended the day flat at 1.9p.
MERL
Activist investor urges Legoland owner Merlin to go private. Merlin Entertainments (MERL), whose attractions include Alton Towers, Legoland and Madame Tussauds, has been told to put itself up for sale by one of its biggest shareholders. San Francisco-based activist ValueAct Capital urged chairman Sir John Sunderland to sound out private bidders amid claims the City does not see the true value in the world’s second-biggest visitors attraction group. Merlin responded by saying “regularly considers all options for driving shareholder value”. In an open letter, ValueAct, which owns a 9.3% stake in Merlin, said its share price “does not reflect the underlying value of the company and may not in the foreseeable future”.
MDC
New boss slashes Mediclinic losses. Mediclinic International (MDC) losses have narrowed as a turnaround implemented by its new chief executive shows signs of paying off. Trading for the South Africa-based hospital operator has been lacklustre since listing in London two and a half years ago, leading to a series of profit warnings and a £479m pre-tax loss last year. Ronnie van der Merwe was brought in last year to steady the business. The former anaesthetist has boosted efficiency and cut costs to help Mediclinic cope with regulatory changes and shrinking health budgets. As a result, pre-tax losses for the year to March fell to £137m.
UU.
United Utilities Group (UU.) faces nationalisation ‘uncertainty’ with rising dividends. One of Britain’s largest water companies plans to pour billions into new investments and rising dividends as it faces the “uncertainty” of a Labour government asset grab. United Utilities will invest an extra £100m this year to accelerate its spending plan for the start of the next decade and will use its rising profits to hike shareholder payouts by almost 4%. At the same time it has admitted that Labour’s plan to renationalise the water sector is a “key area of uncertainty for the business”.
MKS
Marks & Spencer plans new food stores as profits fall for third year. Marks & Spencer Group (MKS) is planning to open 25 new larger food shops as it accelerates the overhaul of its dated store estate as shoppers shift online. Despite reporting reported its third straight drop in annual profits, chairman Archie Norman said M&S was getting “match fit” as it worked on changing every area of the business. The turnaround veteran – feted for his transformation of Asda – said he expected the business to deliver an improvement in trading in the next six months. Full-year pre-tax profits fell 10% to £523.2m. After adjusting for exceptional items, including a £222m charge to reflect the 26 shops shut last year, pre-tax profit rose £17.8m to £84.6m.
SSE
SSE abandons home energy market after customer exodus. SSE (SSE) has vowed to sever ties with its home energy supply business by the end of next year after the supplier lost hundreds of thousands of customers. The Big Six owner said it would sell the supply arm, or list it as a separate business, by the second half of 2020 after failing to spin off the embattled energy company in a deal with Npower last year. SSE lost more than half a million customers from its home supply arm in the year to March after customer accounts fell to 6.25m, from 6.8m the year before. The customer exodus caused SSE’s adjusted operating profits from the business to fall by two-thirds to £89.6m in the last financial year.
RMG
Dividend cut means more pain for Royal Mail investors. Investors in Royal Mail (RMG) face more pain after the company revealed plans to slash its dividend by two fifths to divert more cash into its turnaround. The postal monopoly said it would cut the dividend by 10p to 15p from next year in a decision that will hit small shareholders and employees who were each handed a stake when it listed in 2013. Royal Mail plans to spend an extra £1.8bn on its UK business in a bid to improve efficiency and keep better track of parcels.
PETS
Pets at Home shares jump on better than expected results. Pets at Home Group (PETS) beat City expectations despite reporting lower profits for the year to March as it continued on a restructuring plan. Revenue rose 6.9% to £961m, but pre-tax profit fell more than a third to just under £50m after taking a £40m hit from the costs of a previously announced restructuring. Shares rose as much as 11% as investors welcomes the results, which were better than analysts had forecast. “Our strategy is doing really well,” said Pets at Home boss Peter Pritchard. “We’re in a pet care market that is continuing to grow.”
SDRY
Superdry shares buoyed by new hire. Superdry (SDRY) enjoyed its strongest share price surge in 2019 after the struggling fashion brand poached an industry veteran for its top team and City analysts hailed the early stages of its turnaround. The company has appointed Wiggle’s Nick Gresham as its chief financial officer, a retail stalwart who has also had roles at Homebase and Debenhams. Mr Gresham has been brought in after a string of profit warnings led to the resignation of Superdry’s board and the dramatic return of founder Julian Dunkerton earlier this year. Analysts at Liberum praised “how swiftly decisions are being made”, arguing that the appointment will allow Mr Dunkerton “time to focus on brand and product”.
MTRO
Metro Bank founder Vernon Hill sees off shareholder revolt. Metro Bank (MTRO) under-fire founder Vernon Hill has survived a shareholder revolt following calls for him to step down, but the rest of the board did not escape unscathed following a loans gaffe earlier this year. Only 12% of investors who voted opposed the re-election of Mr Hill as chairman despite three powerful shareholder advisory groups and Legal & General Investment Management, Metro’s largest UK investor, calling for him to leave. Chief executive Craig Donaldson was opposed by 10%. Investors instead turned their attention to Stuart Bernau, who until recently ran the bank’s audit committee, and Eugene Lockhart, head of the risk committee.
BAB
Babcock chief rejects latest Boatman attack as profits tumble. The boss of Babcock International Group (BAB) hit back at another “very inaccurate” report from the mysterious Boatman Capital research as a series of one-off charges hit the engineering specialist’s profits. Last week Babcock was hit with a second wave of claims made by Boatman, which claimed the company’s structure had created “a system that is opaque, needlessly complex, needlessly expensive and prone to errors”. Babcock defended itself against the “malicious” claims at the time, insisting that it did not intend to write down the value of its defence support group division.
EPIC
Questor: this well-managed trust has just raised its dividend. So why are we selling? Questor investment trust bargain: Ediston Property Investment Company (EPIC) has coped well so far with the troubles in retail but we can only see the task getting harder
MERL
Merlin Entertainments (MERL) the theme park operator behind the London Eye and Madame Tussauds has become the latest company to come under pressure from activist investors after its second-largest owner called on it to seek out a buyer to take it private. The FTSE 250 group confirmed to the stock market today that it had received the demand from Valueact Capital, a US-based activist known for its turnaround campaign at the engineer Rolls-Royce. Valueact has a 9.3% stake in Merlin, behind Kirbi, the investment vehicle controlled by the Kirk Kristiansen family, which owns the toymaker Lego. It said in an open letter to Merlin that it could be worth roughly £4.50 a share to a buyer that would take it private. That represents a premium to the prevailing share price of about 30%.
AJB
One of Britain’s biggest investment platforms has posted a rise in profits and revenues in its maiden set of results as a listed company. The flotation of AJ Bell (AJB) has been one of the few success stories of the London stock market in recent months. The company said today that pre-tax profits climbed 27% to £17.7 million in the six months to the end of March on revenues that increased by 17% to £50.1 million. Assets under administration were up 3% to £47.7 billion and the number of retail customers rose by 9% to 214,853.
BME
One of Britain’s biggest discount retailers shook off the crisis gripping the sector as it reported a sharp rise in annual profits and said that it planned to open 50 additional shops this year. B&M European Value Retail S.A. (DI) (BME) reported a 17.1% increase in revenues today to just under £3.5 billion over the year to the end of March. Pre-tax profit for the period increased by 8.7% to £249.4 million. Despite the strong performance in its domestic UK market, however, concern among B&M’s investors about a slowdown in its continental markets hit the shares.
TALK
TalkTalk Telecom Group (TALK) declared that it had returned to “sustainable” growth as more of its customers streamed videos on YouTube and binge-watched dramas on Netflix. The no-frills broadband supplier said that subscribers were upgrading to faster services owing to the explosion in online television, film and video streaming. “There has been a big switch away from copper lines to fibre,” Tristia Harrsion, chief executive, said. Data usage is increasing by 40% annually, with video accounting for 60% of the growth, she said. “It’s YouTube, then Netflix followed by the free-to-air broadcasters and Amazon. Gaming is enormous too,” Ms Harrison, 46, added. The surge in fibre subscriptions helped Talktalk to cut its pretax losses to £5 million in the 12 months to the end of May, from £100 million the year before. Turnover fell from £1.65 billion to £1.63 billion, but rose slightly after stripping out sales from its shuttered mobile phone wing.
MKS
Marks & Spencer Group (MKS) has played down the impact of falling out of the FTSE 100 for the first time in its history after another sharp fall in its share price left it teetering on the brink of tumbling out of the index of Britain’s biggest listed companies. More than £410 million was wiped off the value of the high street retailer yesterday after its shares dropped by 25½p to 245¾p amid the news of a near-10% decline in annual profits and a deeply discounted £601.3 million rights issue to pay for a venture with Ocado, the online grocer. The shares closed at their lowest point since December and near their weakest level in a decade, shrinking the market value of the retailer to just under £4 billion. The decline puts M&S in danger of being relegated to the mid-cap FTSE 250 at a reshuffle next month. Demotion would deprive it of the much-coveted “blue chip” status. However, Archie Norman, 65, the chairman, who was previously the chairman of ITV, appeared to be unperturbed by the prospect of relegation. “When I went to ITV we dropped out of the FTSE 100, the sky didn’t fall in,” he said yesterday. “The business was the same business the day after.”
MKS
Marks & Spencer Group (MKS) is to close more shops as part of an attempt to revive its prospects. Steve Rowe, chief executive, said that the group would close 25 Simply Food convenience shops in a more wide-ranging revamp than had been announced before. The revamp involves opening bigger grocery shops, which led to claims that M&S was moving towards Britain’s supermarket chains. M&S previously had set out plans to close at least 100 sites, but it had not marked any Simply Food shops for closure. However, Mr Rowe, 51, said yesterday: “These are small stores that we don’t think are appropriate for the future.”
FEET
Fundsmith Emerging Equities Trust (FEET) said that Terry Smith, 66, would no longer be portfolio manager of the £320 million fund. He would continue to provide advice and support to Michael O’Brien, 47, and Sandip Patodia, 37, promoted to portfolio manager and assistant portfolio manager, respectively. Mr Smith said: “I’m not running away from this, I’ve still got a lot of money personally in the trust, but I think it will get more out of me because of this changing role.” As chief investment officer of the Fundsmith fund management business, he will contine to play a part in the big investment decisions, but will no longer vet every small position change taken by the trust. He said this was the role that he had at Smithson Investment Trust, another investment vehicle run by Fundsmith, and that the arrangement worked well.
RMG
Royal Mail (RMG) has warned shareholders to expect lower dividends in future as it ploughs £1.8 billion into a turnaround effort. The former state-owned monopoly reported a sharp decline in underlying operating profits for last year and warned investors that it would be rebasing its dividend. It declared a payout of 25p a share for the 52 weeks to the end of March, 1 per cent higher than last year, but added that the award for the year ahead would be set at 15p a share. The struggling postal delivery business said that it might make additional payouts in future, but only if it generated enough cashflow.
BAB
Shares in Babcock International Group (BAB) fell to their lowest level in almost a decade yesterday after the defence group warned that its revenue and profits would fall over the coming year. The defence and engineering contractor, which has come under fire from Boatman Capital, the mysterious and controversial corporate researcher, told investors that market conditions were unlikely to improve imminently. Babcock revealed that its annual profits had risen by only 1.1% on an underlying basis before tax to £517.9 million in the year to March 31. However, on a statutory basis, pre-tax profits fell by 39% to £235 million, including exceptional costs of £161 million from restructuring and adjustments to pension liabilities, while revenue slipped by 3.8% to £5.16 billion.
SSE
SSE (SSE) said that it was working on options to offload its energy services division, which supplies gas and electricity to about four million households, after the collapse of a proposed merger with Npower last year. The FTSE 100 group has appointed Katie Bickerstaffe, 52, former boss of Dixons Carphone UK, who had been due to lead the merged supplier, as executive chairwoman of the division and said that it was working “towards a listing or new, alternative ownership by the second half of 2020”. Adjusted operating profits at the supply business fell by 68% to £89.6 million as it was forced to cut prices by the government’s cap on bills and lost 570,000 gas and electricity supply accounts, or almost 10% of its customers. Excluding the supply division that is earmarked for disposal, SSE reported a 38% drop in adjusted pre-tax profits to £726 million as it incurred an unprecedented £285 million loss in its trading business after shorting gas prices before they rose last summer.
ACA
The Canadian goldminer that owns most of Acacia Mining (ACA) has proposed buying out its minority shareholders for $285 million. Barrick’s possible all-share offer for the 36% of the troubled Tanzanian goldminer it does not already own is pitched at an 11% discount to Acacia’s market value on Tuesday night. Acacia has been in dispute for two years with the Tanzanian government, which has demanded $190 billion in alleged unpaid taxes. Its shares have fallen by two thirds. Barrick opted to negotiate with Tanzania on Acacia’s behalf and said that it had agreed the basis for a settlement, though Tanzania was “not prepared to enter into a settlement directly with Acacia”.
BVIC
The levy on sugary soft drinks has not put Britvic (BVIC) off its game. The company, which makes Pepsi in Britain and owns Robinsons, said that it was “accelerating the consumer trend towards our heartland of low and no-sugar brands”. In the six months to April 14, revenues were up by 4.9% to £769.2 million, up 1.9% on an organic basis, while adjusted operating profits grew by 5% to £83.7 million.
GPOR
Great Portland Estates (GPOR) said yesterday that it was confident in the outlook for London’s property sector, despite a Brexit-related slowdown in the investment market. The office landlord reported a 6.2% rise in annual like-for-like rental income to £100.4 million. Profit before tax fell by 27% to £56.1 million amid slower growth in the value of its holdings. Great Portland, which bought no properties this year, said that 54% of its portfolio had some development potential and, in a downturn, it would be able to deploy up to £1 billion on new sites.
SCH
A takeover swoop from an American payments technology group sent shares in SafeCharge International Group Limited (DI) (SCH) up by more than 20% yesterday. Nuvei Corporation, based in Texas, said that it would buy the British online payments company in an all-cash deal valued at $889 million. Safecharge shareholders will receive $5.55 (436p) in cash for each share held, representing a 25% premium to the stock’s closing price on Tuesday. Safecharge said that shareholders also would receive the previously confirmed final dividend of 7.22p per share. Teddy Sagi, the Israeli tycoon, is the majority shareholder, with a 68% stake in the business. “Strategically, the tie-up makes sense as Nuvei is a US, SME-focused business and more offline, while Safecharge is European, online and enterprise-focused, thus creating a global payments business of scale,” analysts at Jefferies, the investment bank, said. David Avgi, 43, chief executive of Safecharge, said: “The acquisition should enable Safecharge to benefit from Nuvei’s North American footprint and sales and marketing capability to fulfil and accelerate its growth ambitions.” He said that the companies had “similar shared entrepreneurial cultures”.
MNDI
SKG
SMDS
Paper and packaging companies were boosted after Mondi (MNDI) said that it was increasing its containerboard prices. Mondi added 45½p to £17.07. Smurfit Kappa Group (SKG) rose 120p to £23.05 and Smith (DS) (SMDS) advanced 12p to 333p.
CCH
Coca-Cola HBC AG (CDI) (CCH) rebounded for a second day, having fallen by almost 6% on Monday after it emerged that a hoped-for deal to buy a majority stake in Coca-Cola’s African bottling business had been taken off the table. Analysts at Deutsche Bank said that the share price reaction had been overdone, helping the shares to recoup 85p to £28.54 yesterday.
HSV
Homeserve (HSV) rose for a second session after the home repairs provider reported full-year pre-tax profits ahead of expectations. Jefferies issued a “buy” recommendation. The shares closed up 52p at £12.19.
UAI
U And I Group (UAI) fell 11¾p to 160¼p after its annual pre-tax profit tumbled from £48.2 million to £6.3 million. Its net asset value, a key metric for property companies, was down 5.1% at £360.1 million. The company said that it had been affected by “growing political, planning and economic uncertainty”.
SDRY
The first new face in a new-look board at Superdry (SDRY) was revealed yesterday when Nick Gresham was named as the fashion retailer’s latest chief financial officer. Investors loudly applauded the impending arrival of the 48-year-old finance chief at Wiggle. Mr Gresham, who has held finance roles at Homebase, Debenhams and Oak Furniture Land in the past, will succeed Ed Barker, 46, who resigned last month along with the entire board of directors — including Euan Sutherland, the chief executive — after Julian Dunkerton, Superdry’s co-founder, won a battle to be reinstated after a bitter seven-month campaign. He is the first key hire to rebuild the board since the coup. Dennis Millard, 70, Minnow Powell, 64, Sarah Wood, 46, and John Smith, 62, non-executive directors, also are due to quit on July 1. Mr Dunkerton, 54, said this month that he was still looking for a chief executive.
IGG
Tempus – IG Group Holdings (IGG): Buy. Growth prospects overseas are promising, while anxieties about regulation are well discounted.
CCR
Tempus – C&C Group (CCR): Buy. 2020 target of double-digit earnings growth and strong cash are attractive.
SVT
Severn Trent (SVT) dividend jumps after payout criticism. Inflation-busting rise comes after Labour outlines plan to renationalise water groups
MTRO
Metro Bank (MTRO) hit by shareholder protest. More than 25% of voters opposed the reappointments of heads of two key board committees
TSCO
Lex – Tesco (TSCO) – Tesco Bank/UK mortgages: house strife. Mortgage costs have plunged; so have lenders’ margins
ETO
Peppa Pig fails to offset DVD decline at Entertainment One Limited (ETO). Film distribution business weighs on full-year results at production group
SHB
Shaftesbury (SHB) pushes up rents as West End resilient to retail woes. Central London portfolio largely avoided broader turmoil on the high street
SMWH
WH Smith (SMWH) chief Stephen Clarke to step down in October. Departure announced as retailer reports 15% rise in group sales
HFD
Halfords Group (HFD) sees profit fall, blames weather and sentiment. Bike and car accessories retailer says transformation plan to take longer than expected
TSCO
Tesco (TSCO) – Tesco Bank falls victim to UK mortgage price war. Lender pulls out of market due to ‘challenging conditions’