The Mail 16/05/19 - Vox Markets | Vox Markets

The Mail 16/05/19

The boss of Lloyds Banking Group (LLOY) has been slammed by MPs over his lucrative pension payments ahead of the bank’s AGM today. A significant investor rebellion is now expected at the Edinburgh meeting. Antonio Horta-Osorio, 55, was accused of greed by senior MPs over a deal giving him £419,000 towards his retirement, equal to 33% of his annual salary – while staff get a maximum of 13%. Rachel Reeves MP, head of the business committee, said: ‘Investors should take the opportunity to hold pay committees to account and vote against remuneration which includes chief executive pay packages vastly outstripping those of the wider workforce.’

The tycoon seeking to take over Provident Financial (PFG) has vowed to press ahead despite failing to win support from huge numbers of shareholders. John van Kuffeler’s battle to buy the doorstep lender has been backed by investors who own just 53.53% of its stock, a stock market filing revealed last night. This is well short of the 90% backing van Kuffeler initially aimed for. And although it technically puts him in control, he will not be able to cancel the Provvy’s listing or merge it with his business, Non-Standard Finance (NSF), as planned. NSF last night said it will give other shareholders time to reconsider. If it can get to 75% or above a full merger between the two businesses can go ahead.

More than £1.2billion has been wiped off the value of properties which are owned by two of Britain’s biggest landlords. British Land Company (BLND) said the value of its estate fell by £654million last year following an 11% slump at its retail parks and shopping centres amid a crisis on the High Street. The update came just a day after rival Land Securities Group (LAND) said £557million had been wiped off its portfolio last year for similar reasons.Landlords have been hammered as retailers shut stores and seek rent reductions amid rising costs and competition online. Shopping centre owners Intu and Hammerson have also suffered.

Beleaguered Metro Bank (MTRO) was last night locked in talks with investors as it scrambles to raise £350million. Shares staged their biggest one-day rally ever yesterday amid rumours a deal would be signed off after the market closed, giving the lender crucial stability after weeks of speculation over its future. Sources close to Metro said that a deal is likely by the end of this week.

Gambling software firm Playtech (PTEC) has been hit with one of the biggest shareholder revolts this year over its boss’s pay. Mor Weizer took home £2.6million in 2018, a year when Playtech’s share price more than halved and it issued a profit warning that blamed fierce competition and a ‘disappointing’ performance in Asia. Almost 42% of votes cast by investors at its annual general meeting slapped down the remuneration report. And nearly 41% voted against its future pay policy. Last year almost three in every five shareholders opposed the 2017 pay settlement, which saw Weizer pocket £3.6million – a 78% pay rise. Playtech said it has since ‘conducted an extensive shareholder engagement and consultation process’ on how much it pays its top team.

Aston Martin Holdings (AML) shares fell to a new low after it crashed to a £17million loss at the start of the year. Ongoing costs related to its stock market float last October tipped it into the red in the first three months of 2019. This compared with a £2.8million profit in the same period last year, though it made a loss of £68million in 2018 as a whole. Shares in the British luxury car maker skidded as low as 790p before recovering to end the day 14.1p up at 832.9p. They are now worth about 55% less than the 1900p they floated at. The first-quarter loss are likely to raise more questions about why its shares were valued so highly when it went public. They fell immediately upon listing and have not made meaningful gains since.

The grounding of Boeing 737 Max aircrafts, last year’s hot summer, this year’s late Easter, Brexit uncertainty and rising competition in Spain have all taken their toll on TUI AG Reg Shs (DI) (TUI) latest results. In the six months to 31 March, the holiday group’s losses swelled from £148million to £261million. Bookings in its package holiday and airlines business for this summer fell by 3%, while selling prices rose just 1% amid tough market competition. The company has issued warnings over its profits twice so far this year, blaming the one on the UK market and another on the grounding of the Boeings, but it has still held firm on profit guidance for the year. Tui chief executive Fritz Joussen said: ‘Tui is on track, both strategically and operationally, and is well positioned. That is why 2019 will be another solid year.

Shares in CYBG (CYBG) rose by 10% earlier this morning after the group posted its latest results following its £1.7billion takeover of Virgin Money. CYBG said that while it is operating amid a ‘continued uncertain economic backdrop’ and ‘sustained competition’ in the mortgage market, its finances remained ‘resilient.’ The group said it swung to a £42million profit for the six months to 31 March, against losses of £95million a year earlier. On a pro-forma basis and including the Virgin Money business dating back to October 2017, underlying pre-tax profits fell 5% to £286million, but this result was better than expected. But with hefty costs of the takeover and integration expenses included, pro-forma pre-tax profits slumped 80% to £9million as it also took another hit from the payment protection insurance scandal.

Warm weather helped B&Q enjoy a rise in sales in the three months to 30 April, owner Kingfisher (KGF) has revealed. Across the UK and Ireland, sales at DIY chain B&Q rose by 2.8% on a like-for-like basis over the period. Kingfisher’s Screwfix business saw like-for-like sales rise 4.5% over the first quarter, with four new outlets opened. The trading update comes as the group searches for a successor to under-fire boss Veronique Laury. The group announced in March that she planned to step down, but has not yet set a departure date and Ms Laury will remain in post until a successor is appointed.

Pub group Marston’s (MARS) stockpiled £6million worth of beer in a bid to protect itself from the potential fallout from a ‘disorderly’ Brexit. The Pitcher & Piano owner said it stockpiled Spanish lager Estrella Damm and a number of other brands in the run up to the original Brexit deadline of 29 March. Details of the stockpiling came as Marston’s reported a 2% rise in underlying pre-tax profits to £37million for the six months to 30 March. On the Brexit front, Marston’s said: ‘We continue to closely monitor the Brexit situation and are well placed to implement any necessary contingency plans.’

Scandal-stricken Yu Group (YU.) saw its stock soar 62.2% after it revealed the results of an accounting review. The firm, which supplies energy to small businesses, lost more than 80% of its value last year after admitting it had invoiced for more electricity than it sold. It said it now has measures in place to prevent such errors, and that revenue rose 77% last year to £80.6million. Chief executive Bobby Kalar issued a ‘personal apology’ to shareholders over the scandal.

Defence giant Babcock International Group (BAB) is under fire once again from the mysterious research firm Boatman Capital. The engineering company, which has worked on all of the UK’s nuclear submarines, hit back at a ‘malicious attack’ from the anonymous website which it branded ‘inaccurate and misleading’. Boatman published a second report on Babcock yesterday, claiming that the defence firm needed to write down by £50million the value of Defence Support Group (DSG), an acquisition that repairs and maintains British Army vehicles. A writedown of this size would be equivalent to 12.8 per cent of Babcock’s pre-tax profits. DSG is ‘overvalued’, Boatman claimed, alleging Babcock’s structure was opaque and ‘needlessly complex’. Babcock disputed this, and said DSG was performing to financial expectations.

Weapons firm Cobham (COB) was also in shareholders’ good books, as it revealed it had settled a long-running tax dispute and will pay £69million to the UK authorities.

Though heroin addiction treatment firm Indivior (INDV) has faced a slew of challengers recently, its management still backs it. Chief executive Shaun Thaxter bought £44,641 worth of shares on Tuesday, while directors Tatjana May and Daniel Phelan bought £9,945 and £21,645 worth respectively. Their display of confidence came as a welcome assurance for investors, as shares climbed 7.51p, to 52.76p. Indivior has been struggling in recent months, after losing a court case against a competitor which was producing cheaper generic versions of its drugs, and was recently accused of fraud by the US Department of Justice. Thaxter, who now owns more than 1.6m Indivior shares worth £812,000, could gain significantly if its headache goes away.

‘Brilliantly boring’ may not be a compliment most people would welcome, but it was music to the ears of investors in catering company Compass Group (CPG) which served up an 8.8% revenue rise to £12.3billion for the six months to the end of March. Profit was up 6.9% to £913million, and the interim dividend climbed 6.5% to 13.1p. Nicholas Hyett, an analyst at Hargreaves Lansdown, said: ‘Compass is a brilliantly boring business, but that’s key to its charm.’

Bookie William Hill (WMH) tried to deflect shareholder attention away from a 7% slide in its retail revenues, as it hailed success in the US. The gambling company’s UK retail business has suffered after the Government cut the maximum stake which customers can place on fixed-odds betting terminals from £100 to £2. Its acquisition of Swedish rival Mr Green boosted online revenues by 8%, but the real positive for investors was a 48% rise in revenue from the US. It is just one year since the country repealed a ban on sports betting, which cracked the market open to British stalwarts such as William Hill.



Mentioned in this post

Aston Martin Holdings
Babcock International Group
British Land Company
Compass Group
Land Securities Group
Lloyds Banking Group
Metro Bank
Non-Standard Finance
Provident Financial
TUI AG Reg Shs (DI)
William Hill
Yu Group