Sainsbury (J) (SBRY) will be banned from revisiting its botched merger with Asda for at least a decade, in a fresh blow for embattled boss Mike Coupe. In a draft order, the Competition and Markets Authority proposed that the two supermarkets should be prevented from attempting to join forces for ten years. Coupe’s job is said to be hanging in the balance after he was criticised for pursuing the failed merger and taking his eye off the day job. Coupe was the mastermind of the tie-up and held secret talks with Asda boss Roger Burnley for two years before the plans were made public. Sainsbury’s recruited former RSA Insurance boss Martin Scicluna to replace David Tyler as chairman in March, prompting speculation that he could order a major overhaul of the supermarket’s top team. Clive Black, head of research at investment group Shore Capital, said: ‘If either Sainsbury’s or Asda thought they could come to revisit this any time soon, then they were living in cuckoo land.’ Black said the fall proved that Sainsbury’s desperately needed to come up with a plan to revive its fortunes.
Ousted BT Group (BT.A) boss Gavin Patterson’s final bonus was halved in the face of investor anger. The telecoms group was originally set to pay Patterson a £1.1million bonus for 2019 – but this was cut to £572,000 after shareholders raised concerns. Even after his pay cut this year, however, the 51-year-old still walked out the door with a package totalling £1.7million overall. It included an £847,000 salary and benefits of £46,000. And Patterson pocketed pension contributions of £254,000 – busting guidelines from the Investment Association industry body that say bosses should never get more than 24% of their salary.
Young & Co’s Brewery ‘A’ Shares (YNGA) saw its annual profit rise 5.1% to £39.5million, but warned it will be difficult to beat last year’s performance, which was bolstered by the World Cup. The chain saw sales of cocktails soar by 32.1%, while sales of gin rocketed over 35%. Lager sales grew just over 6% and keg ale sales jumped over 22%. The group blamed ‘warm weather’ for its disappointing food sales, which saw its ‘Ultimate Sunday Roast’ sales falter. In the last year, Young’s saw its revenue increase by 8.7% to £303.7million, despite operating against a ‘challenging backdrop.’ The pub group has hiked its dividend by 6% to 20.78p a share and the company’s share price is currently up 1.08% or 20.00p to 1,867.50p. Chief executive of Young’s, Patrick Dardis, said: ‘Our riverside locations, beautiful gardens and growing number of roof terraces meant the business was well placed to take advantage of the fabulous summer weather and the performance of the England football team at the Fifa World Cup. ‘The Christmas trading period was also very strong, with Young’s pubs packed full of seasonal cheer and merriment.’ Looking ahead, Young’s said it remained ‘confident in our winning strategy and our expectations remain unchanged.’
All Bar One and Harvester owner Mitchells & Butlers (MAB) returned to profit growth in the first half, as the company said its sales had outperformed competitors. Adjusted operating profit rose to £151million in the 28 weeks to April 13, up from £141million in the same period last year. Revenue was higher at £1.19billion, while like-for-like sales climbed 4.1%. The group, which also owns the O’Neill’s pub chain and Toby Carvery among other brands, said its focus on efficiency was responsible for the improved performance. Chief executive Phil Urban said: ‘Success in this highly competitive market is dependent on a continuous stream of improvements, and that is what we are delivering, with many small advances at site level driving significant benefits in aggregate. ‘We will maintain our focus on these initiatives, which we believe are transforming the business.’
Thomas Cook Group (TCG) has been thrown a lifeline after a private equity firm offered to buy its Nordic operations. The troubled travel operator is in talks with Triton about its businesses in Denmark, Finland, Norway and Sweden, which could be worth hundreds of millions of pounds. It would help steady Thomas Cook’s finances, and end weeks of speculation over its future, which have sent shares plunging 60% so far this year. A spokesman for the firm said it had ‘received a highly preliminary and unsolicited indicative offer from Triton Partners for its Northern Europe business’. It is ‘evaluating this offer alongside the ongoing strategic review of its group airline’, which it has put up for sale. The group’s Nordic businesses include Ving, Tjareborg and Spies and account for one fifth of its workforce.
A US activist investor has called on Merlin Entertainments (MERL) to secure a deal to take the company private. San Francisco-based hedge fund ValueAct says Merlin’s value would rise by around 30% if it went private. In an open letter to Merlin’s chairman, Sir John Sunderland, ValueAct’s chief investment officer Mason Morfit and partner Jake Welch, said: ‘Private ownership is simply better placed than current public shareholders to underwrite the investments Merlin must make, and to align employee incentives appropriately.’ ValueAct said there was ‘significant private capital interest’ in the company, which could attract a bid of about £4.50 a share. Merlin is currently trading at about 346p a share – having been as low as 304p in October – valuing it at £3.5billion. ValueAct invested in Merlin two years ago, when the shares were trading above 500p a share and the business was valued at £5.5billion.Merlin said in a statement: ‘It remains in the best interests of all its shareholders to continue to pursue its current strategy to create a high growth, high return, family entertainment company based upon strong brands and a global portfolio that is naturally balanced against the impact of external factors.’
B&M European Value Retail S.A. (DI) (BME) plans to open 50 new stores across Britain as it hones in on people’s desire for value shops and bucks the trend of the failing High Street. The Liverpool-based group, which sells everything from food and toys to homeware, saw its annual pre-tax profit increase by 8.7% to £249.4million. The company said the first quarter has started well with mid-single digit like-for-like growth in B&M UK stores. There has been speculation, which has been played down by B&M, that B&M is planning on attempting a reverse takeover of Asda, after the latter’s takeover plans with Sainsbury’s were thwarted by the Competition and Markets Authority.
Aura Energy Limited NPV (DI) (AURA) was powering ahead as it announced it had produced its first yellowcake, a type of uranium concentrate used to make the fuel for nuclear reactors. Aura said impurities in the product were within acceptable levels prescribed by regulators, meaning it can be sold. Aura is based in Australia, but its uranium project is in Mauritania. The firm also owns a site in Sweden where it plans to mine metals used in batteries.
AJ Bell (AJB) released a strong set of half-year results, its first as a listed company. Revenue hit £50.1million in the six months to March 31, up 17% on a year earlier, while profit soared 27% to £17.7million. AJ Bell pulled in 16,941 customers over the period, taking its total to 214,853. Andy Bell, chief executive and founder, said that floating on the stock market last December was less about raising extra money and more about raising his firm’s profile, so it could compete with the likes of Hargreaves Lansdown which has more than 1m clients. Bell is still one of the company’s largest shareholders, with a 25.5% stake, but sold around 2.8% of the company when it listed for £651million, pocketing around £18million. Investors, who have seen AJ Bell’s shares rise 169% since the initial public offering, seemed to be taking the chance to cash in their gains.
Hargreaves Lansdown (HL.) announced that one of its founders, Stephen Lansdown, was selling shares in his company. Lansdown reduced his stake from 10.9% to 9.3%, pocketing around £170million. His former business partner Peter Hargreaves still owns more than a third of the company.
Serco Group (SRP) boosted its value by announcing it would acquire an engineering business which serves the US navy. Even though Serco announced plans to issue up to 11.2m shares, raising around £130million to help fund the £178million deal.
Hollywood Bowl Group (BOWL) continued its series of strikes with investors, with revenues up 5.3% to £67million in the six months ending March 31. Profits rolled in 12.5% higher at £16.4million.
