Embattled advertising firm M&C Saatchi (SAA) was last night reeling from the shock resignations of four directors, including one of its founders. In a dramatic exodus, Lord Maurice Saatchi, Lord Michael Dobbs, Sir Michael Peat and Lorna Tilbian quit after a massive boardroom row. It is understood they left following disagreements about how to reform the company’s governance in the wake of a £12million accounting fiasco, including how quickly, and in what order, changes should be put in place. The changes were recommended in a review by auditor PwC earlier this year.
Lloyds Banking Group (LLOY) boss Antonio Horta-Osorio faced embarrassment yesterday over his handling of the HBOS Reading fraud scandal. A review by Sir Ross Cranston found that the lender should reassess the compensation it gave small business customers, after corrupt bankers spent millions on luxury holidays and prostitutes. The HBOS Reading scandal saw six bankers and advisers convicted of fraud in 2017, and sentenced for almost 50 years combined, for criminal misconduct between 2003 and 2007. Although the judge found that the corrupt bankers had cheated customers out of around £245million, some victims and police sources put the damage at up to £1billion. HBOS’s owner Lloyds has only paid out £102million to 71 small businesses. This was despite Horta-Osorio vowing to compensate victims ‘fairly, swiftly and appropriately’.
Wetherspoon (J.D.) (JDW) will create up to 10,000 new jobs as it invests more than £200million in pubs and hotels over the next four years. It is to build 60 new pubs and ‘a few’ new hotels, while a further 80 existing pubs across the UK and Republic of Ireland will be doubled or tripled in size. Most of the investment will be channelled into developments in small and medium-sized towns. The chain currently runs 875 pubs and 58 hotels across the UK and Republic of Ireland, and employs 44,000 staff. New premises will be opened in places such Bourne, Lincolnshire, Ely in Cambridgeshire, and Diss in Norfolk. There will also be new pubs opening in Felixstowe, Suffolk, Newport Pagnell in Buckinghamshire and in Prestatyn, North Wales. There will also be investment in major cities including London, Birmingham and Leeds. The company founder and chairman Tim Martin said: ‘We are looking forward to opening many more new pubs as well as investing in existing pubs over the next four years.
The Big Four supermarkets have had their worst run into Christmas for 15 years, according to the latest market data. The German discounters Aldi and Lidl continued to steal customers from the likes of Tesco, Sainsbury’s, Asda and Morrisons in the 12 weeks to December 1. The four combined now have just 67.7% of the UK grocery market, the lowest figure for the autumn period since 2004, according to Kantar. At the same time Aldi and Lidl saw their combined market share increase to over 14%. Sales growth of 9.3% propelled Lidl to a new record market share of 6.1%, while Aldi’s 6.2% sales growth – worth £129million – gave it a 8% market share. Ocado Group (OCDO), the fastest growing grocer, saw its sales rise 13.7%, allowing it to grab 1.4% of the total market. The Co-op, which yesterday announced a £25million investment in 30 new stores, creating 500 jobs, has also done well, growing sales by 3.6%. Tesco (TSCO) was the best performing of the largest grocers over the past 12 weeks, despite sales falling by 0.8%. Sales at Sainsbury (J) (SBRY) were down 1.1%, while Asda dropped by 1.9%. Morrison (Wm) Supermarkets (MRW) share of grocery sales dropped back 0.4% points to 10.1% as sales declined by 2.9%.
Just Eat (JE.) has rebuffed the latest attempt by South Africa’s Naspers to derail its planned deal with rival Takeaway.com, saying the £5.1billion sweetened bid undervalues the group. Just Eat said the offer from Naspers’ Dutch-listed investment vehicle Prosus – which was raised on Monday to 740p a share from 710p a share – ‘significantly undervalues’ the company. The group said it continues to back its planned all-share deal with Takeaway.com, which was agreed earlier this year. It comes after Prosus said on Monday its sweetened cash bid ‘provides certainty of value to Just Eat shareholders’. But Takeaway.com boss Jitse Groen quickly hit back at Prosus, saying a ‘slightly higher derisory cash bid remains a derisory cash bid’. In its latest rejection, Just Eat said the increased bid was just 16% higher than its share price in July before talks with Takeaway.com were revealed and 5% lower than the closing price of 777p a share on Monday.
Futura Medical (FUM) fell after the pharma group reported unexpected results from tests of a gel for erectile dysfunction. Trials showed it worked but also that a placebo gel containing some of the active ingredients worked too. This meant the trial failed to meet its goal to beat the placebo, though Futura said this could be a ‘simpler route’ to getting regulatory approval. Investors had expected a positive result against the placebo gel.
Fresh turbulence has hit Rolls-Royce Holdings (RR.) after its largest shareholder quit the board. Bradley Singer, a representative of the activist investor Value Act, is stepping down from the engine maker after almost four years as a director. He joined in March 2016 after Value Act bought a more than 10% stake in Rolls, which was recovering from profit warnings. Value Act cut its holding from 10.48% to 9.35% this year, but Singer’s departure has spooked shareholders, who are preparing for it to sell its entire stake. It comes as Rolls has struggled with problems with a set of engines called the Trent 1000, which is set to cost it £2.4billion, and as another US activist, Harris Associates, has bought a 7% chunk of the company.
BAE Systems (BA.) was knocked by reports that US President Donald Trump’s administration is putting pressure on Japan to choose a US defence company to develop its new fighter jet rather than BAE. Tokyo can either work with BAE, work with US group Lockheed Martin or develop a new plane domestically.
