Press | Vox Markets
SPD
DEB
Sports Direct International (SPD) lays out plan for struggling Debenhams (DEB). Mike Ashley’s retailer would seek to buy the department store chain if it collapsed
MTRO
Regulators press for overhaul of Metro Bank (MTRO) board. Top investors seek ‘new blood’ at Vernon Hill-led lender
DERR

Martin Sorrell’s new advertising firm Derriston Capital (DERR), which he set up after leaving WPP last year, has posted a £9.1million loss in its first annual results. That’s because of the recent acquisitions of San Francisco-based Mighty Hive for £118million and Dutch firm Media Monks for £266million. If the costs relating to these acquisitions are excluded, the company saw adjusted operating profit of just over £4million. On a pro-forma basis, which includes the two acquisitions, revenues for the combined group rose 58% to £135.9million, while operational earnings rose 99% to £22.4million compared to last year. Martin Sorrell, who left WPP after he was accused of using company money to pay for a prostitute – claims he denies – hailed an ‘all-in-all a powerful 2018’

WPY
American financial tech group Fidelity National Information Services Inc (FIS) has agreed to buy London listed payment processor Worldpay, Inc Class A Com Stk (DI) (WPY) for £26billion, in the biggest deal to date in the booming payments industry. Worldpay was formerly owned by the Royal Bank of Scotland before it was spun out of the lender to private equity firms Bain Capital and Advent International in 2010 as a condition of its state bailout. It was subsequently taken over by US rival Vantiv in a £9.3billion deal, which then merged with it to create a £22billion firm. The deal today is the latest in a wave of consolidation in the financial software and payments technology sectors as firms bulk up to compete with newcomers seeking to disrupt the way merchants are paid.
JD.
FOOT
JD Sports Fashion (JD.) is to buy Footasylum (FOOT) for £90.1million, despite insisting it was not his intention to do so just a couple of months ago when it bought a stake in the troubled smaller rival. Britain’s biggest sportswear retailer will pay 82.5p per share for the company, in which it already has an almost 19% stake, having acquired it in February. The offer marks a 77.4% premium on Footasylum closing price from last week, at total cost of £74million, valuing Footasylum at £90.1million. Shares in Footasylum jumped 74% to 81p on the news, although they are still half the flotation price of 164p in November 2017. JD Sports shares rose 0.4% to 488p. The companies did not say if the deal would result in any job losses or whether the Footasylum brand will continue to trade as such.
MOSB
JOUL
Men’s apparel firm Moss Bros Group (MOSB) has lined up Colin Porter, the chief executive of country clothing brand Joules Group (JOUL), as its new chairman. Porter, who has been at the helm of Joules since 2010, will take up the role in May when current chairman Debbie Hewitt retires after nine years in the post. Porter’s appointment comes as Moss Bros is trying to revive its fortunes after struggling in recent years. Shares in the company have been in decline after it issued a profit warning last year. But today’s news was well received by shareholders, with Moss Bros stock rising per 5.4% to 24.72p in morning trading.
MKS
M&S under pressure to slash prices to revive food business as it plans to open new superstores. Marks & Spencer Group (MKS) is under mounting pressure to slash prices in order to stop the rot in its food business. The High Street stalwart plans to open new superstores to try and bring families in for the big weekly grocery shop – pitting M&S against the likes of Sainsbury’s and Tesco. It will also start selling its food online for the first time next year after it bagged a £1.5billion deal with online food delivery company Ocado. The tie-up has been hailed by chief executive Steve Rowe as the retailer’s ‘biggest and boldest’ move to date, as it desperately scrambles to reverse falling sales. The retailer is battling against the unstoppable rise of discounters Aldi and Lidl and experts have warned that unless M&S dramatically reduces prices, its food division will continue to struggle. Richard Chamberlain, an analyst at RBC Capital Markets, said: ‘Prices across the board are going to have to come down. ‘If you look at their pricing I think they are more expensive than Waitrose on branded and own-branded products.’
‘I’ve moved my jobs firm back to Britain because of Brexit’: Recruitment boss James Reed says UK set for a rush to fill roles. As some businesses started moving their operations overseas in preparation for Brexit, James Reed, the boss of the recruitment firm that bears his family name, had other ideas. Shortly after the referendum in 2016, the 55-year-old drew up plans to move the company his father founded nearly 60 years ago back from Malta to the UK. The move was completed late last year and Reed, who voted to stay in the EU, is eager to explain why he holds the increasingly unfashionable belief that a bright future lies in wait for Britain.
IRV
Interserve still had £2.1billion of public deals when it went bust. Interserve (IRV) was handed £660million of taxpayers’ contracts in the two years before it collapsed, despite three profit warnings. The troubled outsourcer still had £2.1billion of public deals when it went bust on Friday. It was handed public contracts worth £432million in 2017, and £233million last year despite profit warnings in May 2016, October 2017 and November 2018, according to Tussell, a data provider on UK government contracts. The biggest contract in 2018 was awarded by the Foreign and Commonwealth office –£66million for total facilities management services in July. Even since December 2018, when the company announced a rescue plan to clear £630million in debts, Interserve has been awarded £6million in public contracts.
WPY
Payments giant Worldpay, Inc Class A Com Stk (DI) (WPY) has been sold for £37bn ($43bn) to US rival Fidelity National Information Services (FIS) in the biggest merger yet for its sector. This deal announced Monday will grant Worldpay shareholders $11 a share in cash as well as 0.9287 of a FIS share, worth a combined $112.12 as of last week. The announcement was billed as a merger but will see FIS shareholders take a 53% stake in the combined group, while Worldpay investors will have 47%. The combined entity will have approximately $12.3bn pro forma 2018 annual revenue, the companies said.
EZJ
Low-cost airline easyJet (EZJ) has withdrawn from talks to join a rescue deal for Italy’s troubled carrier Alitalia, which collapsed into administration two years ago. EasyJet had been mulling a capital injection of up to €400m (£341m) as part of a consortium with Italy’s state-controlled railway Ferrovie dello Stato Italiane and US airline Delta in a bid to keep Alitalia afloat. The Sunday Telegraph reported over the weekend that Italian officials had travelled to the US to drum up interest in the ailing carrier as concerns mounted that EasyJet would walk away from discussions to form a “new Alitalia”.
DERR
Sir Martin Sorrell said that his new advertising venture Derriston Capital (DERR) was “firing on all cylinders” despite reporting a loss in its first set of results. S4 is comprised of Dutch advertising company MediaMonks bought last July, and California-based digital agency MightHive, which helps larger companies buy online advertising, added in December. In its first set of annual results, S4 posted a pre-tax loss of £9.1m for the year to December on revenues of £54.8m. However, when results from MediaMonks and Mightyhive for the full year were included, the company reported pre-tax profits of £7.6m, while revenues shot up 58% to £135.9m.
JD.
FOOT
The children of Footasylum’s co-founder are in for a £50m windfall after waving through a takeover bid by rival JD Sports. JD Sports Fashion (JD.) has offered to buy the struggling shoe retailer for £90m, paying 82.5p per share for the company. The price tag represents a 77% premium to Footasylum (FOOT) shares before news of the bid was made public. The deal will net Clare Nesbitt, chief executive of Footasylum, and her siblings Thomas Makin and Amy Mason, a bumper pay-out. They each own 7.47% of Footasylum, but they are also the sole beneficiaries of a trust set up by John Wardle, who co-founded both JD Sports and Footasylum with their father David Makin and had no children of his own.
DOM
Domino’s Pizza Group (DOM) has denied reports that it misled investors over the extent of its strained relationship with its franchise partners, who run most of its stores. The delivery chain has been embroiled in a row with some of its franchisees, who are refusing to open new stores unless they get a bigger slice of the company’s profits. Domino’s received a letter from a group of store owners who said they were “at total odds” with the company and claimed that its suggestions of a resolution were “extremely misleading”, the Sunday Times reported. On Monday Domino’s hit back at the claims, saying that it “strongly refutes the reported allegations”.
MOSB
JOUL
Moss Bros Group (MOSB) has appointed Colin Porter, the chief executive of fashion brand Joules Group (JOUL), as its new chairman. Despite the high profile-nature of both roles, Mr Porter said he had no intention of giving up his role at Joules when he takes the chairmanship at the suit hire company in May. “This is an exciting appointment for me and one which I am very much looking forward to. However, I would like to reiterate that I remain as active in and committed to my role as chief executive of Joules as ever,” he said. Mr Porter will replace long-serving chairman Debbie Hewitt, who joined Moss Bros nearly a decade ago. She also chairs The Restaurant Group and Visa Europe.
Deutsche Bank and Commerzbank launch merger talks. Germany’s Deutsche Bank and Commerzbank have begun talks about a merger after getting approval about a tie-up from the Berlin government. Discussions about a combination will move forward after politicians indicated that they would accept job losses and other cost cuts that a merger would entail. The boards of both banks are understood to have met separately on Sunday about starting talks, before confirming that formal discussions about a tie-up will begin. In a statement, Deutsche said that its management board had decided to “review strategic options… focused on improving the growth profile and profitability of the bank.
CAKE
Patisserie Valerie administrators face legal challenge over fraud report. Patisserie Holdings (CAKE) shareholders are threatening to take the collapsed chain’s administrators KPMG to court to get hold of a devastating report alleged to show how the company’s cash balances were artificially inflated. Produced by forensic accountants at PwC, the document is alleged to detail a suspected fraud running to tens of millions of pounds. It is claimed to reveal how suppliers provided fake invoices and multi-million pound cheques were submitted to bolster the company’s finances.
BARC
Barclays board faces fresh cull under incoming chairman. Barclays (BARC) board faces a sweeping overhaul in the coming months as incoming chairman Nigel Higgins prepares to further stamp his mark on the bank. Sources told The Telegraph that a major cull will take place later this year as the veteran Rothschild investment banker prepares to replace John McFarlane in May. Four non-executives have left the board in the past few weeks alone after investors pushed for change. The exits mean that 11 of the bank’s 14 remaining board members are seeking re-election at the group’s annual meeting in May. One Barclays shareholder said “not many of the existing team” will remain after the shake-up takes place amid investor demands to shrink the board’s size.
£10bn of North Sea deals may have stalled, quashing hopes about the region’s revival. The North Sea revival has hit an almost $10bn impasse since the steep drop in oil prices late last year, leaving a string of billion-dollar deals high and dry. Major oil companies have put at least six portfolios of UK oil and gas assets on the block since last summer, but none of have been agreed despite strong private equity fuelled interest in the deals. The stalemate between buyers and sellers has underlined the fragility of the North Sea’s renaissance, which ­relies on nimble new oil players taking on the assets owned by the incumbent oil majors to maximise the lifetime of the fields.
Investor flight from Europe now longest in a decade. European markets are suffering the longest withdrawal of money in a decade as investors desert the politically volatile and slowing region. Money has poured out of Europe’s equity funds for 50 consecutive weeks, the longest run of outflows in 10 years, according to Morgan Stanley. The direction of investment has reversed in the last 12 months amid mounting political tensions in the UK and Italy. Although global stock prices have staged a recovery in 2019, investors have continued to pull money out of Europe amid stronger growth in the US.
JD.
FOOT
JD Sports snaps up Footasylum for £90m. The retailer JD Sports Fashion (JD.) has agreed to buy its smaller rival Footasylum (FOOT) in £90 million deal. The offer values each Footasylum share at 82.5p, a 77.4% premium to Friday’s closing price. The price is still well below the flotation price of 164p a share in November 2017. The retailer has faced strong competition from JD Sports, Sports Direct and Asos as customers rein in spending amid Brexit uncertainty since it listed. Last year Footasylum issued two profit warnings in five months and was forced to cut prices after a disappointing run up to Christmas.
DERR
Sorrell’s S4 Capital reports 30% revenue growth. Derriston Capital (DERR), Sir Martin Sorrell’s new advertising venture, said that it was enjoying 30% revenue growth after signing up a number of new clients. In its maiden annual results, the company flagged up “significant” contract wins from the consumer goods giants Procter & Gamble and Nestlé and the food company Mondelez. S4 Capital said that revenue and gross profit had increased by more than 30% on a like-for-like basis in January. Sir Martin, who built WPP from scratch into the world’s largest advertising and marketing conglomerate, said that he was still on the hunt for acquisitions after buying two digital agencies last year.
INTU
Intu malls on Canada shopping list. Canada’s biggest pension fund is poised to raise its stake in Intu Properties’ Spanish shopping centres. Canada Pension Plan Investment Board is in talks with Intu Properties (INTU) over increasing its ownership of the shopping centres, which include Intu Asturias in Oviedo, northern Spain, and Puerto Venecia in Zaragoza, in the northeast. The pension fund already has a 50% stake. Intu also shares control of the Xanadú shopping centre in Madrid in a joint venture with Nuveen Real Estate. Intu’s share of the three centres was valued at £630 million at its latest results. It is also developing a complex called Intu Costa del Sol, near Malaga, with shops, hotels and restaurants.
German banks see way clear for €25bn merger. Deutsche Bank in talks with Commerzbank over tie-up. Deutsche Bank, one of the biggest employers in the City, and Commerzbank have begun talks about a possible merger that would be one of Europe’s largest financial sector tie-ups. In a statement Deutsche confirmed that it was in discussions with its rival as part of a review of strategic options to “improve the growth profile and profitability of the bank”. Christian Sewing, 48, who took over as chief executive after the Yorkshireman John Cryan, 58, was removed last April, elaborated on Deutsche’s motivation in an email to staff. “I have consistently stressed that consolidation in the German and European banking sector is an important topic for us,” he wrote. “We have to assess if and how we want to play a part in shaping it.”
GLEN
Glencore offices raided in India over alleged price-fixing cartel. Glencore (GLEN) offices in Mumbai have been raided by the Indian competition regulator as part of an investigation into alleged price fixing of pulses. More than 25 officials from the Competition Commission of India are said to have searched the premises of the mining group as well as those of Africa’s Export Trading Group and India’s Edelweiss group over a suspected three-way pricing cartel. The investigation is thought to centre on allegations of collusion between the companies while importing and selling chickpeas and other pulses at a time when there was a shortage in India, according to Reuters.
Zero tariffs ‘will save £10bn’ under no-deal. Plans to scrap tariffs on the bulk of UK imports would reduce the short-term damage of a disorderly no-deal Brexit by up to £10 billion, according to economists. Official estimates of the hit to GDP from leaving the EU without a deal or a transition have been calculated on the assumption that Britain mirrors the EU’s external tariff schedule. However, the government said last week that tariffs would be made zero on all but 5% of imports. Zero tariffs would boost business by removing an import cost and reducing border frictions that could delay supply chains.
IRV
Interserve was handed work despite crisis. The government has been accused of “irresponsibility” as it emerged that Interserve (IRV) won £660 million worth of public contracts as it slid into a financial crisis that led to its collapse into administration last week. Analysis of government projects has revealed that the outsourcing giant was handed public jobs worth £432 million in 2017 and £233 million last year. The deals were awarded even while it advised investors of its financial problems.
DEB
SPD
Pre-pack an option for Debenhams. Lenders to Debenhams (DEB) could consider a “pre-pack” administration in an effort to protect the struggling department store from a campaign by Mike Ashley’s Sports Direct International (SPD) to gain control. Debenhams has been holding talks for weeks with its lenders about securing £150 million of funds before a wider restructuring of more than £500 million of debt next year. Gaining capital will be vital for Debenhams, which is in the midst of a turnaround. It is trying to secure a funding deal before a meeting next month where Mr Ashley, the chain’s largest shareholder, is seeking to install himself as chief executive and remove most of the board.
DMGT
Daily Mail owner joins call to break up Google and Facebook. The dominance of the two platforms over the online advertising market was “seriously anti-competitive” and risked putting publishers out of business, said Daily Mail and General Trust A (Non.V) (DMGT). Despite having an audience of 12 million daily readers, Mail Online had yet to break even, it added. To increase competition, Facebook should be forced to sell Instagram and WhatsApp while Google should be ordered to spin off YouTube, its Chrome browser and Android mobile phone software, according to DMG Media. The government should also “remove its hidden subsidy” to the American giants by forcing them to pay “proper” corporation tax, it argued.
GYM
PGYM
Fears that the low-cost gym market could soon run out of steam after a period of rapid expansion appear to be wide of the mark, according to a new report. Analysis of the market by PWC suggests that total capacity for budget gyms in Britain is between 1,200 and 1,400 sites, up from forecasts of about 1,000 previously. There are 654 low-cost gyms trading, implying scope for another 550 to 750 sites over the next few years. The number of low-cost clubs has increased more than tenfold from 58 gyms over the past eight years, with low-cost members accounting for about 25% of health and fitness memberships. The expanded capacity estimate assumes that market penetration by low-cost gyms will grow to between 5% and 6.9% of the population, up from 3.7% last year. PWC’s report was commissioned by the The Gym Group (GYM), the second largest low-cost operator behind Pure Gym Group (WI) (PGYM), with 24.2% of the budget market.
IRV
Ministers drew up secret plans to nationalise parts of hospital cleaning and school dinner contractor Interserve (IRV) before it was rescued from the brink of collapse last week, leaked documents reveal. An internal Whitehall strategy memo seen by The Mail on Sunday shows that the civil service last year put together a proposal to create a state-controlled company that would have been on standby in case struggling Interserve went into liquidation. In that eventuality the Government was prepared to move staff into the new company to ensure vital public services were not disrupted. The plans are one of the few instances of the Government being prepared to bail out a failed company since RBS and Halifax Bank of Scotland were controversially rescued using taxpayer cash in the financial crisis more than a decade ago.
BME
Discount retail giant B&M European Value Retail S.A. (DI) (BME) is attempting to wriggle out of strict rules designed to stop major chains exploiting food and drink suppliers. The company, which has about 600 stores and annual sales of £2.6billion, claims a decision to force it to sign up to the Groceries Code Adjudicator would lead to ‘irreparable financial harm’. GCA rules ensure that major companies make timely payments to suppliers and that the correct procedures are followed when contracts are terminated. But B&M has claimed it would cost £1million to implement the changes required as it works with 1,600 suppliers. GCA membership is applied to any retailer that has more than £1billion in sales of food and drink, although exceptions can apply. Many suppliers are said to be angry that Amazon and Boots have not been added.
AV.
DC.
MRO
BLT
Eight major companies were last night forced to defend links between their senior directors and the Big Four accountancy giants that audit them. Aviva (AV.), Dixons Carphone (DC.) and private equity giant Melrose Industries (MRO) are among the firms named and shamed in a new report alleging that board-level connections with auditors represent conflicts of interest. The report, from shareholder advisory group Pirc, comes at a time when accountancy firms – and in particular the Big Four of KPMG, Deloitte, EY and PwC – are coming under intense political pressure over their auditing work. In recent years, auditors have come under the spotlight over their connections with scandal-hit firms including Sir Philip Green’s BHS, the collapsed outsourcing giant Carillion and the cake shop chain Patisserie Valerie. Last week, the Government announced that audit watchdog the Financial Reporting Council would be scrapped and replaced by a body with new powers to hold firms to account. In its annual corporate governance report, seen by The Mail on Sunday, Pirc identifies BHP Billiton (BLT) as a prime example of a company with unacceptable connections with its auditors.
VOD
Hedge funds have dialled up their bets against Vodafone Group (VOD) shares to a record £1billion after the telecoms giant raised billions of pounds in debt to fund a megadeal in Europe. Speculators swooped on Vodafone’s shares last week, with major short positions hitting an all-time high, according to disclosures by the Financial Conduct Authority. At least 2.7% of Vodafone’s shares were on loan to short-sellers, meaning bets worth more than £1billion were placed against the stock. Sources said it was most likely hedge funds were shorting the shares after a major convertible bond launch – although there are also fears Vodafone could be forced to cut its dividend, which is one of the biggest in the country.
BCA
One of Britain’s best-paid female bosses has handed her daughter more than £4million in shares. Avril Palmer-Baunack, who runs WeBuyAnyCar owner BCA Marketplace (BCA), gifted her daughter Iona two million shares in the FTSE 250 company last week. Palmer-Baunack, 54, faced a backlash last year after pocketing a share bonus worth £29million, making her one of the best-paid women in the country. Shareholder advisors Glass Lewis called the bonus ‘exceptionally disproportionate’, claiming the used car company’s value may have been inflated by general stock market swings rather than by her management. Now stock market filings indicate she has handed some of those controversial shares to her daughter who graduated from the University of Birmingham in 2017 and is now studying for a PhD.
OCDO
A massive bonus scheme which could see Ocado Group (OCDO) boss Tim Steiner pocket up to £100million is ‘excessive’ and should be rejected by shareholders, according to an influential investor group. The payouts, revealed by The Mail on Sunday, are based on the online grocer boosting its share price over the next five years. Steiner’s payout is capped at £20million a year and four senior executives could each get a maximum of £5million a year. But Glass Lewis, which advises shareholders on corporate governance and pay, said the targets were too short term and could see Ocado bosses get rich from buoyant market forces rather than management strategy.
TED
Ted Baker (TED) will be hoping to embrace a fresh start when it publishes full-year results on Thursday. The firm is expected to report an 8% drop in profits to £63million. After the results, the firm – now being led by acting chief Lindsay Page and executive chairman David Bernstein – is off on a City roadshow to win over investors.
ASC
ASOS (ASC) will this week give its first public statement since December’s shock profit warning. Ahead of its first-half trading update on Tuesday, analysts at Peel Hunt reckon the upset was more down to a ‘poorly executed Black Friday’ rather than fundamental flaws. But clearance sales may have hampered progress in the past three months and a return to normal service may have to wait until the second half of Asos’s financial year.
 
ZTF
MIDAS SHARE TIPS: Want a winner? Try Zotefoams (ZTF), the firm behind faster trainers. Midas verdict: At £5.92, Zotefoams shares could be considered expensive relative to peers. However, the stock has come off from more than £7 at the end of last year, the business is growing fast and exemplifies British innovation and drive at its best. An attractive buy, particularly for long-term investors.
DEB
Debenhams in race against time to secure lifeline. Debenhams (DEB) must raise emergency funds by the end of this week or the ailing chain could face administration. Without a refinancing of its debt mountain and access to fresh capital, the embattled retailer will be unable to pay a looming £50m quarterly rent bill. The payment to landlords is due on Monday March 25, meaning an agreement with lenders would need to be in place by the end of the week. Failure to secure a deal could force banks to call in their loans, pushing Debenhams into administration, sources close to the talks said. Lenders would then take control of the business.
BARC
Three leave in Barclays board shake-up. Barclays (BARC) has shaken up its board just weeks after major shareholders pushed incoming chairman Nigel Higgins to bring in new blood. Mike Turner, the former boss of BAE Systems and until recently the chairman of Babcock, will step down from the board along with former Goldman Sachs banker Reuben Jeffery and economist Dambisa Moyo. The move comes weeks after Rothschild veteran Mr Higgins, who replaces John McFarlane in May, began discussions with the bank’s top investors to rally support just as activist investor Edward Bramson, who owns more than 5% of the bank through his firm Sherborne Investors, seeks backing for a board seat.
EZJ
Battle to save Alitalia amid concerns over EasyJet rescue. Italian officials have crossed the Atlantic in a bid to resurrect a rescue deal for Alitalia as concerns mount that easyJet (EZJ) is about to walk away from a deal to save the bankrupt carrier. US airline Delta hosted Italian state rail company Ferrovie dello Stato in Atlanta, Georgia, on Friday, sources said. EasyJet and Delta announced in February that they are in talks to inject up to €400m (£341m) and create a “new Alitalia”. But easyJet’s interest cooled last week, with it reportedly only interested in short-haul slots from Milan’s Linate airport. Some €900m of government funding is due to be repaid by April. Refinancing this will trigger a EU state aid review.
IMI
Questor: as oil recovers, IMI (IMI) is worth buying in anticipation of better times ahead. Questor share tip: the valve maker has been diversifying away from the energy markets but a recovery in the oil price will do it no harm
DOM
Domino’s Pizza, led by David Wild, accused of misleading the City. Franchisees ramp up row with pizza delivery giant. The £1bn food giant that runs Domino’s Pizza in Britain has been accused of misleading the City over the state of relations with the powerful franchisees who run most of its 1,100 stores. Domino’s Pizza Group (DOM), run by former Tesco executive David Wild, received a letter from a group of angry store owners last week. It warned that comments suggesting a resolution to an ongoing dispute could be found were “extremely misleading”, because Wild and the board were “at total odds with the franchisees”. The letter marks a sharp escalation in a row between the plc and its entrepreneurial partners, who have refused to open new stores until they are granted a greater share of its profits. About 90% of the 67 store owners are members of the Domino’s Franchisee Association, which says their share of profits has fallen from 61% to 50% over the past four years.
SRP
MTO
Rivals Serco and Mitie circle in bid to clean up at Interserve. Rival outsourcing giants have approached Interserve’s administrator, EY, about buying its services business. Serco Group (SRP) and Mitie Group (MTO) are understood to have made inquiries about Interserve’s support services arm, which has a turnover of £1.7bn. Industry insiders expect a wave of consolidation across the outsourcing sector, which has been hit by botched contracts, government pressure and rising costs. However, a sale of the services division, said to be valued by the company’s lenders at about £300m, would leave Interserve focused on construction and equipment hire, posing a dilemma for the lenders. “Those players [rivals] only want the best bits,” said a source close to the talks.
 
AML
Aston Martin’s £62m gift to boss Andy Palmer. Aston Martin Holdings (AML) chief executive was handed £62m in shares as a reward for turning around the luxury car maker before its stock market float. Former Nissan executive Andy Palmer was given 3.27m shares worth £62.2m at Aston’s float price of £19. Palmer sold £29.2m of the shares to settle tax liabilities and kept the proceeds from a further £6.6m that he sold. The remaining 1.39m shares will be released progressively until 2022, although they have fallen in value to £16.1m. The disclosure in the annual report comes after its much-hyped stock market float last October. Its shares have fallen since then by 39% to £11.62, valuing James Bond’s car maker at £2.7bn.
BT.A
VOD
BT called out over rural mobile tie‑up. BT Group (BT.A) has been accused of frustrating an attempt to end poor mobile reception in rural areas by refusing to support a proposal put forward by its rivals. Three, O2 and Vodafone Group (VOD) want a joint investment in a single rural network to improve the signal for mobile phone users nationwide. Millions of people and thousands of businesses struggle because of so-called partial not-spots — areas where one or more operators cannot provide a signal. The government wants the four networks to work together to solve the problem through “rural roaming”, where customers would be able to use another operator’s signal, as they do abroad.
TSCO
Tesco’s Dave Lewis finds his discount dream is not all right, Jack. The inauspicious start to Jack’s underlines the difficulty Tesco (TSCO) chief executive Dave Lewis faces in luring customers away from Aldi and Lidl, which have established themselves as part of the fabric of the industry, and raises questions over the merits of taking on such a time-consuming project. As investment and management attention has flowed towards Jack’s, Tesco’s core supermarkets have felt a chill, with the closure of 90 fresh-food counters and 9,000 possible job cuts coming on top of the tens of thousands of roles already removed by Lewis over 4½ years. He has told the City that he wants Tesco’s operating profit margin, now at 2.9%, to recover to between 3.5% and 4% by next February — a target that critics say is spurring short-term thinking.
MTRO
CYBG
OSB
CCFS
The new banks that failed the challenge. Smaller lenders and fintech apps are finding it hard to take on the big four. Metro Bank (MTRO) claims to be the plucky underdog of British banking. It belongs to a pack of challengers, including TSB, Monzo, Starling and Revolut, that promised to rattle the big four — Barclays, HSBC, Lloyds and RBS. So far, however, many have failed to live up to their hype. Despite the brightly coloured branches and shiny apps, challenger banks have clawed barely any market share from the big four, which still control about three-quarters of the current account market. The upstarts’ future is now under the microscope. A string of debacles, including a serious accounting error at Metro and the botched IT upgrade at TSB as well as claims of a “toxic” work environment at Revolut, have raised serious questions about their governance and culture. Having grown at breakneck speed during their toddler years, many are struggling to reach maturity. Challengers are still dwarfed by their big-name rivals, and some are being forced into mergers to grow and to survive. CYBG (CYBG), owner of Clydesdale Bank and Yorkshire Bank, gobbled up Virgin Money for £1.7bn last year. Last week, OneSavings Bank (OSB) and Charter Court Financial Services Group (CCFS) agreed a £1.6bn merger. Fintech start-ups such as Monzo and Starling, which have eschewed branches in favour of digital apps, are battling to win customers and backing from investors while sitting on heavy losses. The looming question is whether some will see off these growing pains and pose genuine problems for the high street clearing banks, and how many will succumb to gravity instead.
SDRY
Founder’s ally Peter Williams attacks Superdry (SDRY). Dunkerton will face hostility if he returns, warns retail veteran. The former boss of Selfridges has said he wants to protect Superdry’s co-founder from a “very hostile” atmosphere if he succeeds in his campaign to return to the fashion retailer. An acrimonious spat between Julian Dunkerton and the board of the company he co-founded will come to a head next month, when Superdry shareholders vote on his reinstatement and the appointment of Peter Williams, former chief executive of Selfridges, to the board. “If he was just going back in by himself, he’d be walking into a very hostile environment. I’m there to ensure fair play, so if he does get voted back in, he’s not on his own,” Williams said.
DEB
Watchdog FCA probes claims of rebound by Debenhams (DEB). Debenhams has been accused of misleading suppliers and concession holders in a press release last year, prompting a review by the Financial Conduct Authority. The troubled department store chain said in September that it still had “significant headroom” in its debt facilities as it responded to press speculation about its finances. It added that any “sustained upturn would result in a rebound in our profit performance”. A concession holder has alleged the statement falsely described Debenhams’ financial strength, leading some business partners to continue offering credit. Since the statement, Debenhams’ share price has collapsed by more than 70%. It closed on Friday at 3.3p, valuing the chain at £40m. The FCA’s market integrity unit is reviewing the issue as a potential breach of its rules.
INTU
Intu mulls £860m Spanish malls sell‑off. The owner of the Trafford Centre in Manchester is eyeing the sale of its £860m Spanish portfolio as it tries to cut its debts in the wake of two failed takeover bids. Intu Properties (INTU), which tried to merge with Hammerson last year and then received an approach backed by the Canadian giant Brookfield, is considering selling stakes in its three Spanish shopping centres — Xanadu near Madrid, Puerto Venecia near Zaragoza and Asturias near Oviedo. Intu owns 50% of each of the three centres, which are worth a total of €700m (£596.3m), and could look to sell to its joint venture partners. Intu also has a significant development site near Malaga on the Costa del Sol.
Investors around the world poured money into stock market funds last week at the fastest rate in a year, hoping to exploit the continuing rebound from December’s market sell-off. Equity funds received net inflows of $14.2bn (£10.7bn), the most since March last year, according to analysis by Bank of America Merrill Lynch. Many investors who have been wary about the stock market recovery this year are now turning bullish, the bank said. Wall Street’s S&P 500 index is up more than 12% this year, closing in on September’s all-time high. British stocks have followed, with the FTSE 100 up 7% this year despite the Brexit chaos. In the past, a rush of cash into stock markets has tended to foreshadow a big sell-off. However, the Bank of America analysts said it would take a few more weeks of hefty inflows to push markets towards “excess bullishness”.
TM17
Computer games developer Team17 (TM17) is set to report a surge in profits amid strong demand for its titles. Analysts expect the company behind the popular Worms franchise to boost pre-tax profits by 64% to £12.1m when it announces full-year results on Tuesday. The company, which floated last May and is now valued at £279m, has more than 100 games spanning computer consoles and mobile phones. Sales are set to be up from £29.6m to £40m over the year.
GFRD
Homes are where the cash is for Galliford. When Galliford Try (GFRD) won a deal to build a 36-mile dual carriageway snaking around Aberdeen in 2014, it got much more than it bargained for. The road has proved an unmitigated disaster for the construction firm and housebuilder, costing it £150m so far. It is still locked in a legal tussle with the Scottish government over whether it can claw back costs. Galliford and Try merged in 2000 to build homes under the Linden brand and work with housing associations and councils on regeneration — making decent profits doing so. Galliford and Try merged in 2000 to build homes under the Linden brand and work with housing associations and councils on regeneration — making decent profits doing so. Galliford has ridden the Help to Buy wave, generating profit margins of 19.6% between July and December at Linden Homes. Its regeneration division earns 5.1% margins. Set that against profit margins of just 0.9% (before the Aberdeen losses) in its construction business and you can see which areas Galliford would rather be in. So, it’s make your mind up time for Galliford Try. If the cloud of construction lifts, its shares should rise, too.
HSBA
HSBC Holdings (HSBA) bows to investor pressure and cuts executives’ pay. UK bank reduces cash payments in lieu of pension from 30% to 10% of leaders’ salaries
IRV
Interserve (IRV) taken over by its creditors. Administration follows liquidation of rival state contractor Carillion last year
Mike Ashley moves to snap up LK Bennett. Offer for fashion chain marks tycoon’s latest move to take advantage of high-street woes
RTN
Restaurant Group (RTN) jumps as Wagamama owner tops profit expectations. Shares rise most in two years
IRV
The government contractor Interserve (IRV) has gone into administration after its largest shareholder, the US hedge fund Coltrane, led a rebellion against financial rescue plans drawn up by the company’s lenders. About 16,000 small shareholders have lost their investment, with the business sold to hedge funds and banks via a “pre-pack” administration which means Interserve, which employs 45,000 people in the UK, can continue trading. Interserve has thousands of government contracts including hospital cleaning, school meals and maintenance of military bases in the Falklands. It also runs parts of the probation service, which was part-privatised under a heavily criticised process overseen by the former justice minister Chris Grayling. The company and the Cabinet Office, which oversees state suppliers, said there would be no disruption to the public services that Interserve manages and job losses were not expected in the short term and the pension scheme was protected.
CAKE
The black hole in the accounts of the troubled cafe chain Patisserie Holdings (CAKE) was as much as £94m, more than twice previous estimates, according to forensic accountants. The company plunged into administration in January after it was unable to secure new bank finance following the discovery of “potentially fraudulent” accounting irregularities. The progress report by its administrators, KPMG, published on Friday, said analysis by a team of forensic accountants had concluded the accounts had been overstated by approximately £94m. Previous estimates had put the figure at £40m, but a breakdown of the new sum suggests Patisserie Valerie’s cash position had been overstated by £54m. The company’s debts had also been understated and the amount it was owed overstated, to a combined value of £17m. There was also a £23m discrepancy in the way it had valued its assets.
JDW
The Wetherspoon (J.D.) (JDW) chairman, Tim Martin, has said no-deal Brexit tariff plans would lead to lower prices for consumers, as higher pay for staff dented profits at the pub chain. Martin has been one of the most outspoken business proponents of leaving the EU without a deal, meaning trade would default to World Trade Organization terms. The government revealed plans on Wednesday to cut tariffs to zero on 87% of British imports by value if there is no deal, but the plans would also raise tariffs on meat imported from the EU. That could impact Wetherspoon’s food sales, which accounted for 36% of revenues in its 879 pubs across the UK in the 26 weeks to 27 January, according to results published on Friday. “If there’s no deal and we implement the tariff schedule that the government is suggesting I believe that prices will be lower than they otherwise would have been at Wetherspoon and elsewhere,” Martin said, highlighting possible tariff drops on oranges, bananas, and wines including New Zealand sauvignon blanc and Australian merlot.
IRV
Two foreign hedge funds pushed Interserve (IRV) into administration – and left 16,500 small shareholders with nothing. In a humiliating blow to the Government contractor’s chief executive Debbie White and chairman Glyn Barker, investors rejected a rescue package that would have slashed their stake in the company to just 5% and handed the other 95% to Interserve’s lenders. The rebellion was led by New York-based hedge fund Coltrane Asset Management, the largest investor with a 27% stake, and Dutch fund Farringdon, which held about 6%. The Mail understands that if ballots from the two hedge funds were removed, 95% of the vote was cast in favour of the company’s plan, known as a debt-for-equity swap. But investors holding 44% of Interserve’s shares did not vote at all – meaning the rescue was rejected by 59% to 41%. It means shares held by an army of 16,500 small investors are wiped out. Last night Interserve said it had completed a ‘pre-pack’ administration within hours of the vote that handed control to its lenders, including Barclays and Royal Bank of Scotland, and hedge funds such as Cerberus. It insists that operations will continue as normal on Monday morning.
LLOY
HSBA
Two High Street bank bosses have had more than £400,000 cut from their annual pension payments amid an investor outcry. Antonio Horta-Osorio, chief executive of Lloyds Banking Group (LLOY), and HSBC Holdings (HSBA) boss John Flint, took the reductions amid claims blue-chip firms are using the payouts to top-up boardroom salaries. Rival bank Standard Chartered, as well as FTSE 100 groups Astrazeneca, Reckitt Benckiser and Burberry have also come under fire for handing bosses pension contributions worth hundreds of thousands of pounds. But both Lloyds and HSBC said their bosses would take reductions to their pay. HSBC said Flint’s payments will fall from £372,000 to £124,000, taking it from 30% of his salary to 10%. The 50-year-old was handed a total package worth £4.6million in 2018. Lloyds said Horta-Osorio, who was paid £6.3million last year, will also see his pension contributions cut. He will get 33% of his salary, or £419,000, down from 46%.
SPD
Mike Ashley has made a grab for LK Bennett just days after it crashed into administration. In the latest effort to add to his sprawling retail empire, the 54-year-old Sports Direct International (SPD) tycoon put forward an initial offer for the collapsed upmarket fashion retailer, according to the Financial Times. Administrators for LK Bennett – a favourite of the Duchess of Cambridge – are thought to have made presentations to potential buyers this week in a race to save the business. The company fell into administration last week, putting almost 500 jobs at risk across its 39 stores, 37 concessions and at its head office.
ZTF
Demand for lightweight foam-sheet materials boosts Zotefoams (ZTF). The company makes extremely lightweight foam-sheet materials for a range of applications, including aviation, transporting goods, padding for shoes and cover for prosthetic limbs. Its customers include Toyota, Boeing, Nasa and Nike. Their products are in demand and sales are soaring, and it is trying to add more capacity at US, UK and Polish sites. A £20.6million fundraising last May means the balance sheet has relatively little gearing, and operating income covers interest payments more than ten-fold. Leading shareholders include Miton, Schroders and Blackrock, which own around a third of the shares between them. Even allowing for the costs of the capacity expansion, it has had a streak of annual profit increases dating back to 2013 and a string of dividend hikes that runs to almost a decade. However, the biggest risk is still probably posed by the valuation. A market capitalisation of £28million compares to forecast pre-tax profits of £10million for 2018 and the dividend yield is barely 1%.
ASC
ASOS (ASC) targets millennials, so it should be in a sweet spot right now. But its share price has halved in the past few months after a shock profit warning in December. The online fashion retailer had to downgrade its sales growth target to 15% as a result of poor trading at the back end of last year. Weaker consumer confidence was largely to blame, though not so much on these shores – UK sales actually held up pretty well. The real damage was done in the international business. Asos has shown it is adept at connecting with customers through social media, and its tiny share of the vast global clothing market gives it plenty of room to grow. That will require investment, though, so investors do need to be patient.
FSFL
Foresight Solar Fund Limited (FSFL) aims to provide an inflation-linked income stream. A portfolio of 53 solar farms in the UK and Australia. Some 83% of its investments are in the UK and 17% in Australia. In total it owns 869 megawatts of generating capacity. Around 52% of its revenue comes from subsidies, mainly a British one called the Renewable Obligation Certificate, which is inflation linked. The dividend for 2018 was 6.58p. The underlying assets are pretty stable, says Ben Yearsley, director at Shore Financial Planning. He adds that a high yield of more than 5.5% and the dividend broadly inflation-linked makes this an interesting income play. A risk could be if the Government reneged on subsidies, though that seems unlikely. Another downside is a long-term one, in that the subsidies only last for a set period. Originally it was 25 years, but we are well into that now. You are not going to get much capital growth and it does sit on a small premium today of about 4.5%.
RTN
Shares in Frankie & Benny’s owner Restaurant Group (RTN) soared amid signs it is finally turning the corner. The company, which bought noodle chain Wagamama for £559million last year, reported profits of just £13.9million for 2018 – around half the £28.2million it made the previous year. The shares rose 10.1%, or 12.8p, to 139.4p after bosses revealed sales were up 2.8% over the past ten weeks. Graham Spooner, investment research analyst at The Share Centre, said the figures ‘have helped provide some much-needed relief for shareholders’. But he added: ‘We regard the shares as a high-risk buy for investors who believe the management will be able to counter the current problems in the casual dining sector, and benefit from the Wagamama acquisition. The big question is, can the early signs of improving sales be maintained?’
 
BKG
Shares in luxury housebuilder Berkeley Group Holdings (The) (BKG) rose after it played down fears of a housing market slowdown. The London-focused group said that business from November to February had been in line with previous years, despite concerns about Brexit uncertainty. Its comments came as fears grew about falling transactions and prices in the capital. But Berkeley said it had a strong balance sheet and it was optimistic about sales in the South East.
 
JDW
Profits at Wetherspoon (J.D.) (JDW) tumbled in the first half of the year as rising sales failed to cancel out an increase in costs. The pub group’s pre-tax profits in the six months to January 27 fell 18.9% to £50.3million as costs rocketed, especially labour, which increased by about £33million. However, revenue rose 7.1% to £889.6million and like-for-like sales were up 6.3% in the period. Chairman Tim Martin warned that costs would continue to rise in the second half. He said: ‘As previously indicated, costs in the second half of the year will be higher than those of the same period last year. ‘The company anticipates an unchanged trading outcome for the current financial year.’ He added that, in the six weeks to March 10, like-for-like sales increased by 9.6% and total revenue jumped 10.9%, helped by good weather.