The Mail 13/03/19 - Vox Markets | Vox Markets

The Mail 13/03/19

Morrison (Wm) Supermarkets (MRW) has dished out its third special dividend of the year to shareholders, as it ploughs ahead with its turnaround plan and enjoys growth across its wholesale arm. The Bradford-based supermarket will pay out a special dividend of 4p a share on top of 4p per share last March and 2p a share in September. In its latest annual results published today, the supermarket, which is the fourth biggest in the country, posted an 8.6 per cent rise in underlying pre-tax profit to £406million. In total, the full-year ordinary plus special dividends for the last year come out at 12.6p a share, marking an increase of 24.9% on a year earlier. The supermarket saw like-for-like retail sales growth slow to 0.6% in the final three months of the year, down from 1.3% in the third quarter. But like-for-like sales overall rose 3.8% in the fourth quarter thanks to a 3.2% contribution from the wholesale division, which includes tie-ups with McColl’s and Amazon. On a statutory basis, the group’s pre-tax profit fell by 15.8% to £320million after exceptional costs, with the group closing a pension scheme and paying off loans.

Carphone Warehouse has been fined £29million for mis-selling its ‘Geek Squad’ mobile phone insurance. The Financial Conduct Authority said parent company Dixons Carphone (DC.) failed to give sales staff the right training to give suitable advice to customers purchasing the service. It came after the FCA launched a probe based on evidence from whistleblowers. Investigators found sales consultants were not trained well enough to ‘treat customers fairly’ between 2008 and 2015, with staff told to offer the product to people who already had cover through home insurance and other policies. Carphone Warehouse made sales of more than £444.7 million from Geek Squad between those years. The FCA said that 35% of the insurance policies were cancelled within the first three months of buying them, which is a key indicator of mis-selling.

Standard Life Aberdeen (SLA) has shaken up its boardroom and appointed Keith Skeoch as its sole chief executive, leaving former joint boss Martin Gilbert to become vice chairman. The FTSE-100 listed fund group said Mr Gilbert will also become the chairman of Aberdeen Standard Investments, as well as an executive director of the board. The management change news came as the group published its latest annual results, reporting ‘broadly flat’ profits of £650million, against £660million a year ago. The group’s net outflows from its funds rose to £40.9billion, up from £32.9billion. Assets under management and administration fell from £608billion to £551.5billion. Commenting on the management shake-up, the group said in his new role Mr Gilbert ‘will be able to focus solely on our strategic relationships with key clients, winning new business and realising the potential from our global network and product capabilities.’

The move marks the first big change under the chairmanship of former HSBC chairman Sir Douglas Flint, who took on the job from 1 January.

GlaxoSmithKline (GSK) boss Emma Walmsley has become the FTSE 100’s best-paid female executive after taking home £5.9million last year. The figure, revealed in drug maker Glaxo’s annual report, includes a £1million salary, £4.4million in bonuses and nearly £500,000 in benefits and pension contributions. It is £1million more than a year earlier, when the 49-year-old was paid £4.9million. But the married mother-of-four’s total package was still lower than the sum handed to her chief scientist, Hal Barron, who pocketed £6.6million.

Profits at fast food chain Domino’s Pizza Group (DOM) have tumbled amid a battle with its franchisee store owners and troubles overseas. It posted profits of £61.9million, down 22% on a year earlier. Sales in stores open more than a year in the UK increased 4.6% compared with a year earlier, while revenues across the entire group increased by 9% to £1.2billion. In addition to the UK and Ireland, Domino’s also operates stores in countries including Switzerland, Liechtenstein and Germany. But its international business has hurt growth as it struggles abroad to replicate the success of its pizza. Norway and Sweden have proved particularly tough to crack. David Wild, the chief executive of Domino’s, said: ‘Internationally, we have experienced some growing pains which have hampered our overall financial performance.’ Analysts said the slump in profits came as a shock. Earnings were hit by one-off costs such as £4.5million for the Norwegian expansion.

Advertising giant WPP (WPP) has recruited the most powerful woman in British tech as a board member as it tries to boost its digital credentials. Cindy Rose, the chief executive of Microsoft UK, will take up her post in April as a non-executive director. The 53-year-old American has run Microsoft’s business since 2016 and holds British citizenship. Before joining the US technology giant, she led the consumer division at telecoms firm Vodafone. Her appointment comes as WPP battles competition from internet giants such as Facebook and Google, with advertising shifting online.

Lloyds Banking Group (LLOY) has put the squeeze on customers to boost its profits to £6billion last year. The bank raked in more cash from borrowers amid rising interest rates but failed to pass the benefits on to long-suffering savers, who are stuck with returns far below inflation. Banks make their profits by collecting deposits from savers and lending them to borrowers. Meanwhile savers using a Lloyds easy access account get interest of just 0.2%. Anna Bowes, of consumer group Savings Champion, said: ‘This is an illustration of how your bank isn’t going to do you any favours when you’re trying to save. ‘High street providers pay some of the worst interest rates for savers, and yet they have some of the largest amounts of deposits.’

Profits at contractor G4S (GFS) dived after it handed £100million to US security guards who got no meal or rest breaks. The company set aside the cash after a Los Angeles court ruled that 13,000 security guards had been underpaid between 2001 and 2010. Pre-tax profit fell 63% to £143million, while revenue dropped 4% to £7.5billion.

The company behind a sprawling fertiliser mine in Yorkshire has put its financing plans on hold after it was approached with an alternative deal. Sirius Minerals (SXX) said a major global financial institution had a proposal to replace a complicated arrangement to raise £2.3billion of debt. In a statement, Sirius said it believes the new plan offers a better solution as it seeks to build its Woodsmith mine, which will dig under the North York Moors to produce a form of fertiliser called polyhalite.The new deal would probably be simpler than a complicated funding scheme which Sirius unveiled in January.

French Connection Group (FCCN), in which tycoon Mike Ashley holds a 27% stake, said it made a marginal profit of £100,000 in 2018, compared with deep £2.1million losses the year before, thanks to improvements at its wholesale arm. However, on a pre-tax basis, the firm’s losses spiralled to £9.3million. Retail sales tumbled 11%, down both in stores and online, amid what it dubbed a ‘difficult’ retail trading environment. The struggling fashion chain hung the For Sale sign last October but is yet to seal a deal.

Rattled retailer Mothercare (MTC) is swinging the axe once again, this time ridding itself of its toy business Early Learning Centre (ELC) . The struggling mother and baby specialist, which will have shuttered 57 UK shops by the end of this month and made job cuts at its head office last year, today said it was selling its ELC business in a bid to slash its debt mountain and exit the highly-competitive toy market.  It has been snapped up by Amersham-based toy chain The Entertainer for £13.5million. The disposal, aimed at helping Mothercare pay off around £17.5million of debt over the next year, forms part of its urgent turnaround efforts, after sales and profits plummeted.

AIM-listed miner Greatland Gold (GGP) has inked a £50million deal with Australia’s biggest gold producer, Newcrest, sending shares up more than 20%. The agreement will see Greatland’s gold and copper site in Western Australia explored and developed by Newcrest over six years. Newcrest will have the right to acquire up to a 70% interest in the site, and intends to process ore at one of its plants nearby.

A raid on Debenhams (DEB) by Mike Ashley would leave his current company Sports Direct International (SPD) in the hands of an inexperienced finance boss, analysts at Jefferies have warned. Billionaire tycoon Ashley last week said he wants to sack almost all of Debenhams’ board and become its chief executive while standing down at Sports Direct. He plans to leave the company in the hands of deputy chief finance officer Chris Wootton. But Jefferies analysts said the plot has raised eyebrows. They added: ‘Wootton may be a rising star (we do not know him) but we note he has been a deputy chief financial officer for barely a year, a chief accountant for only a year, and around three years ago was still just a manager at PwC. That is a rapid rise to the top of a listed company.’

 

Interserve (IRV) lost even more ground as a vital vote on its future edged closer and conflict with its biggest shareholder, Coltrane, heated up further. On Friday shareholders will vote on a rescue deal that would see Interserve lenders take a 95% stake, cutting current investors’ stake to just 5%. If the deal doesn’t get through, the company will collapse into insolvency. But yesterday it emerged that Coltrane has piled more pressure on Interserve, writing to proposed administrator EY to demand that, if the vote fails to pass, EY must market the company to potential buyers instead of immediately selling to creditors.

Cairn Energy (CNE) shares shed 7p, to 167.7p, after it revised down estimates of reserves at its flagship oil and gas field in the North Sea by 19%. It took a £127million charge after it cut its Kraken reserves by 6.8m barrels of oil. The news also dragged down shares in oil firm EnQuest (ENQ), which is a partner in the flagship project with a stake of around 70% and which lost 2.56p, to finish at 15.92p.

The boss of mattress maker Eve Sleep PLC (EVE) shook up the management team amid a dramatic turnaround plan. Abid Ismail and Felix Lobkowicz, finance and operations chief respectively, will leave and chief brand officer Kuba Wieczorek will move to a part-time consulting role under the plans by new boss James Sturrock. The company also said it would end a commercial relationship with mattress-seller Dreams – just 18 months after the partnership began – as it announced that its pre-tax loss had widened by 1.3% to £20.3million. But revenue rose by 25% to £34.8million.

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Mentioned in this post

CNE
Cairn Energy
DC.
Dixons Carphone
DEB
Debenhams
DOM
Domino\'s Pizza Group
ENQ
EnQuest
EVE
Eve Sleep PLC
FCCN
French Connection Group
GFS
G4S
GGP
Greatland Gold
GSK
GlaxoSmithKline
IRV
Interserve
LLOY
Lloyds Banking Group
MRW
Morrison (Wm) Supermarkets
MTC
Mothercare
SLA
Standard Life Aberdeen
SPD
Sports Direct International
SXX
Sirius Minerals
WPP
WPP