Red alert for blue-chip dividends as Vodafone slashes £4bn payout. Vodafone Group (VOD) on Tuesday took the axe to its dividend in a “massive” blow to investors that increases the chances of other big companies following suit. The telecoms giant went back on a pledge six months ago to at least hold its dividend, cutting it by 40% from 15 euro cents a share to just nine. That saves it €1.6 billion (£1.4 billion) a year on the back of a £6.6 billion loss caused by the sale of Vodafone India. Chief executive Nick Read said the decision was “not taken lightly” but claimed it “secures the dividend going forward”. This is the first time since 1990 Voda has cut its dividend. It is a core holding of most UK pension funds, paying out nearly £33 billion in the past 10 years.
Property giant Landsec takes £500m hit as retail pain bites. Land Securities Group (LAND), the UK’s largest property firm, on Tuesday warned that a wave of retail failures has dented the value of its empire by a whopping £557 million. The Bluewater shopping centre part-owner, which is shifting its focus to London offices, said its portfolio value dropped to £13.8 billion in the year to March. That was driven by income falls in its shopping centres, retail parks and some central London stores. The firm also suffered as numerous businesses closed shops or sought rent cuts using company voluntary arrangements. Since the start of last year, more than 80 retail and food chains have gone into CVA or administration across the UK, affecting more than 6000 stores across the industry. Rob Noel, Landsec’s chief executive, told the Standard: “Consumers are exercising caution and retailers are seeing their costs go up. There is increased stress for both parties.”
Legal & General to develop 1000 rental homes in Wandsworth. Legal & General Group (LGEN) on Tuesday backed its biggest build-to-rent deal after snapping up land for a £500 million project in Wandsworth in a bid to help ease the capital’s housing crisis. The investor, which is looking to cater for Londoners priced off the housing ladder, has teamed up with Dutch asset manager PGGM to buy two sites across six acres. Around 1000 homes will be built near Wandsworth Town rail station solely for rent. The scheme also includes 35% affordable housing and extensive commercial space which could be used for shops, cafes or gyms.
Nationwide Building Society, Investec (INVP) and the Co-operative Bank today won an £80 million pool of funds aimed at increasing competition in banking. The latest award from the Banking Competition Remedies board again snubs CYBG (CYBG), with Monzo and a host of other small digital players also losing out. TSB, which has had massive IT issues, decided not to even apply. The BCR is charged with handing out £775 million of money from Royal Bank of Scotland Group (RBS) as part of the terms of its 2008 government bailout. The process has been rife with altercation. The first round saw Metro Bank (MTRO), Starling and Tide share £280 million. None of these awards were without controversy. Today Nationwide landed £50 million, while Investec and the Co-op Bank got £15 million. Co-op Bank nearly went bust in 2017 and its former chairman Paul Flowers, dubbed the Crystal Methodist, was banned from the City.
