Press | Vox Markets
DLAR
De La Rue boardroom shake-up continues as chairman exits. The management clear-out at De La Rue (DLAR) has continued with the chairman announcing his retirement less than a month after the chief executive said he was leaving. Philip Rogerson used a stock market announcement to say he will retire from the banknote and security printer, while senior independent director Andy Stevens will also depart. Last month shares fell by a third when De La Rue issued a profit warning with its annual results and said that chief executive Martin Sutherland would leave. Activist investor Crystal Amber, the company’s third-biggest shareholders with a 6.25% stake, has been agitating for change at De La Rue, which last year lost the lucrative contract to print UK passports.
BT.A
BT packs its bags in Spain as fears mount over strength of UK broadband business. BT Group (BT.A) has begun work on a sale of its Spanish business as the break-up and restructuring of its international arm Global Services accelerates and its shares slump on fears for broadband dominance on home turf. The telecoms giant has begun exploratory talks with potential buyers of BT España, according to City sources, in parallel to the ongoing sale of BT Ireland. Discussions are at an early stage, with any deal more likely to appeal to buyout firms and infrastructure investors than Spain’s big telecoms players Orange, Vodafone, MásMóvil and Telefónica, City sources said.
CBOX
Life is sweet for egg-free patisserie Cake Box in maiden results. Cake Box Holdings (CBOX) sales jumped by a third in its maiden annual results as a growing number of people gorged on its egg-free cakes. The chain, which floated on London’s junior market last summer, made pre-tax profits of £3.8m for the year to March, up from £3.3m the year before. Revenues grew 33% to £16.9m as it defied the wider retail gloom and opened 27 more franchise stores during the year, bringing the total to 113. Cake Box plans to have up to 250 stores longer term. “We want quality, not quantity,” said chief executive Sukh Chamdal.
NOG
Nostrum Oil & Gas (NOG) is considering a sale of the company as it looks into options to fund further growth. The Kazakhstan-focused oil and gas company said a sale was one of the options it was considering as part of a strategic review of the business launched on Monday. The explorer said it wanted to improve shareholder value and raise the funding needed to embark on new projects. Nostrum, which drills and produces oil and gas in western Kazakhstan, said it had not yet received any bids in a sale process being run by Goldman Sachs. Other options include making further acquisitions in nearby oil and gas fields and selling stakes in some of its assets.
 
MARS
Questor: raise a glass to Marston’s (MARS) sensible plan to cut debt and boost cash generation. Questor share tip: the brewer will stop building new pubs while competition remains intense and will instead focus on making more from its existing assets
FGP
DLAR
Activists sweep the board. First Group under pressure as De La Rue caves in to investor demands. The growing influence of activist investors on British companies was demonstrated yesterday as an American hedge fund gathered support from big City shareholders for its overhaul of FirstGroup (FGP) and a UK fund claimed victory in driving boardroom changes at De La Rue (DLAR). A campaign by Coast Capital, a New York-based activist, to clear out more than half of First Group’s board and to break up the transport company was boosted by a report on Sky News that Schroders and Columbia Threadneedle Investments opposed the re-election of Wolfhart Hauser, First Group’s chairman, on the eve of today’s extraordinary meeting. Investors in First Group will vote on proposals put forward by Coast to replace six directors, including Mr Hauser, 69, who used to run Intertek, the testing company, and Matthew Gregory, 49, its chief executive of only about six months.
MYSL
An online retailer backed by the family of Sir Philip Green has put itself up for sale after a turbulent spell on the stock market. Shares in Mysale Group (MYSL) slumped after it said that it had launched a strategic review to consider “all types of corporate activity”, including a sale of all or part of the group, a fundraising to support an overhaul or a delisting from London’s junior stock market. It comes after a volatile five years as a public company, which began with a botched flotation on Aim in 2014 — when Macquarie, the stockbroker sponsoring the issue, mistakenly priced the stock in pounds rather than pence — and which was punctuated by profit warnings. Mysale said that disruption from a restructuring of the business was having “some temporary negative effect” on trading and that it might need extra funds in the short term to support the turnaround.
GOAL
SPD
Goals investor cries foul over Ashley ‘bullying’. The second biggest shareholder in Goals Soccer Centres (GOAL) has accused Mike Ashley of “bullying” after the head of Sports Direct International (SPD) threatened to vote his stake in the five-a-side operator against the reappointment of all its directors. Chris Mills, 66, founder of Harwood Capital, which has an 18.86% stake in Goals, dismissed last week’s intervention by Mr Ashley as “deeply unhelpful”, insisting that the board was doing its utmost to resolve the company’s financial problems. Sports Direct, which has an 18.92% stake in Goals, said last Friday that it had lost confidence in the six-strong board, which includes Mr Mills, over its handling of the discovery in March of VAT liabilities of at least £12 million. It accused Goals of a “lack of transparency”.
WPCT
Investors lose patience with Woodford Patient Capital Trust (WPCT). Disgruntled investors are gearing up to demand a boardroom shake-up at the listed trust run by Neil Woodford. Seneca Investment Managers, a Liverpool-based hedge fund, is understood to have approached other institutional shareholders to force changes to the five-person board at Woodford Patient Capital. The group, which has sold shares in Patient Capital in recent days, received support from other shareholders to approach turnaround experts to push through its plan, which a source said amounted to “shareholder action”. The largest investors in Woodford Patient Capital include Blackrock, Alliance Trust and Legal & General. The trust’s board has held discussions with some of its largest shareholders and is in talks to hire an additional non-executive director. A search also is under way to replace Alan Hodson, a former executive at UBS, who left the board last month.
ADM
HSTG
Admiral Group (ADM) sailed ahead yesterday amid City predictions that accelerating insurance prices would send its shares higher. Barclays upgraded the FTSE 100 motor insurer from “underweight” to “overweight”, citing hopes of higher growth in the cost of premiums and the recent underperformance of the shares. Analysts at the bank noted that the severity and frequency of personal injury claims fell by 2% between January and May compared with the previous year. “Our analysis suggests insurance prices have reached an inflection point in [the second quarter], with April-May prices up 4% — a trend that we believe will only be recorded by the wider market when the mainstream quarterly indices are published in the second half of July,” they told clients. Admiral and Hastings Group Holdings (HSTG), its smaller rival, “show the strongest gearing to rising prices”, Barclays said, predicting car insurance premium growth of between 4 and 5% by the end of the year. The share prices of both companies “have historically been highly correlated to movements in premiums”, the analysts added.
CCL
Carnival (CCL) struggled after Barclays downgraded the holiday operator behind Cunard and P&O Cruises from “overweight” to “equal weight” and sliced its target price by a fifth to £43.30. Its analysts pointed to persistent challenges in Europe “which could continue into next year”. Barclays added that Norwegian Cruise Line and Royal Caribbean Cruises “face stronger growth catalysts”.
DRX
Citigroup cut its target for Drax Group (DRX), the owner of Britain’s biggest power plant, from 312p to 265p, sending the company’s shares down by 16¾p to 275¼p.
ETO
Entertainment One Limited (ETO) shares rose 5% after Berenberg launched its coverage of the television and film producer with a “buy” rating. Analysts at the German investment bank reckon that the business, having been disrupted by the growing dominance of streaming services such as Netflix, now stands to benefit from their rise. “With eight more brands in development, further monetisation opportunities in China and the rest of the world and Peppa Pig theme parks, we believe there is a lot more upside to come,” they told clients in a note.
 
STS
Tempus – Securities Trust of Scotland (STS): Buy. Strong track record and dividend looks set to rise
CAKE
Police arrest five in Patisserie Holdings (CAKE) investigation. Serious Fraud Office says those held have been questioned over alleged fraud at cafe chain. Five people have been arrested and questioned over alleged accounting fraud at Patisserie Valerie, in a dramatic escalation of the investigation into the cafe chain’s financial implosion. According to a statement from the Serious Fraud Office (SFO) issued over the weekend, the arrests took place last Tuesday in a joint operation with Hertfordshire, Leicestershire and Metropolitan police services after the discovery of a multimillion-pound gap in the company’s accounts late last year. The SFO did not disclose the names of those arrested or what they had been detained for, although said it was conducting inquiries into the role of individuals in the firm’s slide into administration. The company went bust in January, sparking the loss of 900 jobs when 70 of its almost-200 stores and concessions closed.
NG.
TSCO
Supermarket freezer aisles could soon help power the National Grid (NG.) after trials found that hundreds of thousands of fridges could provide a nationwide “virtual battery”. The trials were undertaken by Tesco (TSCO) along with researchers at the University of Lincoln in a mocked-up supermarket, built to test whether fridges can help to balance the energy system. Researchers found that complex algorithms, developed by the software firm IMS Evolve, can temporarily cut the electricity supply to fridges when needed while still keeping the food cold. These mini power cuts to the freezers could automatically create short pulses of extra electricity on the grid to match any dips in the grid’s energy frequency.The system operator already pays firms that own utility-scale batteries to provide this service but the trial indicates that retailers can also play a role, while at the same time reducing their carbon footprints.
AML
Aston Martin Holdings (AML) chief executive faces vote against £1.2m salary. Andy Palmer’s pay package has drawn criticism amid falling share prices. Andy Palmer has led the company since 2014, but investor scrutiny of his £1.2m salary – before a potential bonus five times larger – has increased as shares have slumped from the price at the carmaker’s much-anticipated stock market flotation. There is little prospect of Aston Martin losing the vote because the majority of shares are owned by Italian private equity firm InvestIndustrial and Kuwaiti investors. However, a symbolic vote against the binding pay policy would add to pressure on the company’s leaders. Aston Martin’s struggles in recent months have come despite making progress on opening a new factory in south Wales to make the DBX, the brand’s first sports utility vehicle in its 106-year history. Palmer is hoping the car, which will retail from £140,000-£160,000, will become Aston Martin’s most popular model, helping to double production.
LLOY
Lloyds Banking Group (LLOY) freezes 8,000 offshore accounts in Jersey. UK lender spent three years asking clients for personal information under new rules
GOAL
Ashley’s row with Goals Soccer Centres (GOAL) could get expensive. Call for accounting probe highlights need for audit and finance chief rotation at Aim
HL.
Hargreaves Lansdown (HL.) hit by investments in groups supported by Woodford. Holdings in a handful of British companies have significantly underperformed peers
SBRY
Supermarket giant Sainsbury (J) (SBRY) has been blasted for ‘rewarding failure’ by handing bumper rewards to chief executive Mike Coupe despite a calamitous end to his attempted merger with Asda. His plan to create a £50billion grocery giant was quashed by the Competition and Markets Authority (CMA) in April. The shares have since plummeted to a 30-year low. Coupe caused outrage after he was caught on camera singing We’re In The Money the day the firm announced its merger plan. He received £3.9million, 7% more than he received a year earlier. That compares with the £4.6million handed to Tesco’s Dave Lewis, who has been lauded for reviving his firm’s fortunes. In a report seen by The Mail on Sunday, shareholder advisory body Glass Lewis challenged Sainsbury’s board and pay committee to explain the size of executive bonuses following the shares crash. ‘The committee have failed to outline the impact, if any, of the failed deal on the bonus outcomes of the executives, particularly in light of share price performance as a direct result.’ It said the reward could represent ‘divergence of bonus outcome from shareholder experience’.
SPD
House of Fraser’s Hull store will close in August despite personal guarantees from the chain’s owner Mike Ashley that it would remain open. The closure has raised doubts about the future of other outlets which Ashley rescued from administration last year. In March, the firm said 54 stores were still operating and five would close. Since then, it has emerged that the future of the Altrincham branch is also in doubt, despite being named by parent company Sports Direct International (SPD) on a list of 20 that had been ‘saved after landlords agree to new terms’. Billionaire Ashley said in September that it was ‘great news’ the store would remain open, despite ‘a small number of greedy landlords’ that ‘still refuse to be reasonable’. And shortly before Christmas, he said the Hull branch was getting ‘a second chance, saving over 100 jobs’.
FGP
Transport giant FirstGroup (FGP) faces a dramatic showdown with investors on Tuesday after the rail and bus company’s largest shareholder launched a final push to unseat a string of board members. Last night, James Rasteh, a partner at New York-based hedge fund Coast Capital, which owns almost 10% of FirstGroup’s shares, broke ranks to complain of the ‘arrogance’ of the group’s chairman. He said the board’s management of the business has been ‘shocking’ and described the company’s expansion of its rail franchise as ‘sheer folly’.As well as clearing out the board, Coast Capital wants the group to halt the sale of First Bus and address the growing pension deficit at the company, which has been mired in problems at its rail franchise operations.
AFRI
One of the few cannabis firms listed in London is considering a move to America’s heavyweight Nasdaq Exchange. AfriAg Global plc (AFRI) is listed on the Nex Exchange and is merging with Apollon Formularies, a Jamaica-based company that makes cannabis-related medical products to sell at clinics. Entrepreneur David Lenigas, the executive chairman of AfriAg, said: ‘We are interested in moving on to AIM or the London Stock Exchange’s main market when appropriate, but if that alternative doesn’t become available then we will consider moving our listing to Nasdaq in the US.’ City sources said that at the moment the LSE and its junior AIM market aren’t keen to allow cannabis-related firms to list on their exchanges, but are coming under pressure to change their policy on marijuana companies. As a result, AfriAg and similar businesses, such as Sativa, have had to list on London’s little-known Nex Exchange.
SEQI
MIDAS SHARE TIPS: Fear the worst? Try Sequoia Economic Infrastructure Income Fund Limited (SEQI), the fund designed to be fireproof. Midas verdict: The word ‘fund’ may have acquired unwelcome connotations following the Woodford fiasco but Sequoia is a very different beast, in structure, approach and focus. At £1.10, the shares offer attractive long-term rewards – and a juicy dividend too.
CTO
MIDAS SHARE TIPS UPDATE: Powering up skyscrapers brings high rising results for Clarke (T.) (CTO). Midas verdict: T Clarke combines old-fashioned values with cutting-edge technology and know-how. It is a winning combination and should continue to deliver growth. Shareholders have done well out of this business but there is more to come so they should hold on to their stock. At £1.16, there could be rewards for new investors too.
BT.A
VOD
Mobile operators should face scrutiny from cartel watchdogs over High Court claims of attempted price fixing and collusion, according to the leader of a cross-party group of MPs. Grant Shapps, the Conservative chairman of the cross-party British Infrastructure Group, called on the Competition and Markets Authority (CMA) to consider opening a formal investigation of the mobile industry. The regulator is being urged to intervene after The Daily Telegraph on Friday revealed claims by the BT Group (BT.A)-owned operator EE that the former chiefs of rivals O2 and Vodafone Group (VOD) UK made “inappropriate” attempts to discuss sales plans and pricing. Mr Shapps said: “These fresh revelations of potential collusion between some major operators will worry consumers and the British Infrastructure Group of MPs is anxious to see the sector come clean. “They can start by ensuring that full competition always benefits consumers, as well as stopping dodgy practices like continuing to charge full whack after a contract has ended.”
JMAT
Johnson Matthey chief: ‘Diesel will be around for a long, long time’. The drive towards clean, electric vehicles ought to be a worry for Johnson Matthey (JMAT). The manufacturer generates nearly two thirds of its £4.2bn turnover by supplying car makers with catalytic converters, which clean exhaust emissions. About one in three new cars worldwide has a Johnson Matthey autocatalyst on it. Robert MacLeod, the chief executive, insists he isn’t concerned by what many see as the inevitable demise of internal combustion engines. “Will diesel ever die? It depends on your definition of diesel dying,” he says, speaking in the boardroom of the company’s base in the City of London’s Farringdon Street. “I think diesel will be around for a long, long time.” He rehearses well-worn arguments in diesel’s defence. “Diesel’s fuel economy benefits are enormous. If you drive hundreds of miles on motorways every day, diesel’s well suited to that. The emissions are lower with that sort of driving.”
RR.
The chief executive of Rolls-Royce Holdings (RR.) has conceded the engineering group is “not necessarily the most benign environment” for female staff as it pushes to become diverse. Warren East made the comments in an interview in which he also admitted that at 57 he felt young within the FTSE 100 company. The chief executive of Rolls-Royce has conceded the engineering group is “not necessarily the most benign environment” for female staff as it pushes to become diverse. Attracting and retaining a new generation of diverse talent has become a key area of focus for Rolls and Britain’s manufacturing sector in general. Yesterday was International Women in Engineering Day — set up by the UK-based Women’s Engineering Society to promote diversity and now a worldwide movement thanks to backing from the government and Unesco. Speaking at the Paris Air Show last week Mr East said that Rolls-Royce had “an age demographic that’s like . . . I do feel young, I don’t feel old”. He added: “It’s not necessarily the most benign of environments if you’re a woman engineer. It just hasn’t been, historically. We recognise that the inclusion bit is just as important as the diversity bit and so we work hard on that.”
GSK
Luke Miels’ strong medicine paying off for GlaxoSmithKline (GSK). When Luke Miels was poached from Astrazeneca two years ago to lead the pharmaceuticals division of Glaxosmithkline, his defection triggered a bitter legal dispute between Britain’s biggest drugs companies. Mr Miels, Astrazeneca’s head of Europe, was a protégé of Pascal Soriot, its chief executive, and his controversial departure came at a crucial period for the rival businesses. When he arrived at his new job, Mr Miels found a drugs business that was too inward-looking and bureaucratic, with a “conservative” culture. “We are not doing research in a vacuum,” he said. “You need to be looking outside the company. You need to be looking how your programme is advancing relative to the other alternatives that may be out there. And so we’ve made the company culturally more outward-looking.” The turnaround is centred on streamlining the division in an attempt to produce fewer but bigger bestselling drugs. “There were a lot of programmes,” Mr Miels said. “There wasn’t a lot of prioritisation within that, so you had a lot of programmes moving ahead. The challenge is that even if you have a really good programme, if it moves too slowly another company [with] a more concentrated effort could surpass you.”
BARC
The former chief executive of Barclays (BARC) has been cleared of wrongdoing after a judge ruled there was “insufficient evidence” to support the charge of conspiracy to commit fraud. The decision was made after a jury was initially discharged in April, although the case remains subject to strict reporting restrictions. It had been alleged by the Serious Fraud Office (SFO) that John Varley concealed £322m of payments to the Qataris from other investors in exchange for multi-billion pound cash injections that saved the bank from a government bailout. When charges were first brought in 2017, Mr Varley was forced to resign from a number of high-profile board positions with immediate effect, including his role as senior independent director at mining giant Rio Tinto and a senior director at investment management behemoth BlackRock.
BCA
One of Britain’s best-known hedge fund managers has ramped up his bet against WeBuyAnyCar.com owner BCA Marketplace (BCA), despite a £1.9bn private equity buy-out bid. Crispin Odey said he believes last week’s approach for BCA from private equity firm TDR Capital will fail, and is positioning his fund to profit by building a short position in the car auction company’s shares. The hedge fund chief held a short position on 0.6% of BCA’s stock on Thursday when the company confirmed it was in “advanced discussions” with TDR about a 243p a share bid. News of the approach lifted BCA shares by almost a fifth 239p, with BCA’s board saying it would unanimously back a formal offer from TDR if one was made. However, Mr Odey is convinced a bid will stall and said he had increased his short position in BCA when he learnt of the approach. “BCA is expensive at that level and it’s a business that is likely to return 5%, maybe 11% or 12% at best, and that’s just not enough,” Mr Odey said.
KIE
Kier Group (KIE) bosses were awarded significant pay rises even as they oversaw the outsourcer’s descent into a crisis that has drawn comparisons with failed contractors Carillion and Interserve. Aggregate pay for Kier’s board members leapt by more than 70% over three years to 2018, from £3.3m to £5.6m. The figures cover both executive and non-executive directors, and include basic salary, bonus and pension payments, plus employee share scheme benefits and taxable benefits as well as windfalls from the contractor’s long-term incentive plan for its executive directors. Figures from Kier’s publicly available remuneration reports show that total board pay increased by almost a quarter in the year to June 30, renewing questions over whether pay on boards of UK listed companies is sufficiently linked to performance.
BT.A
Questor: now is not the time to bail out of BT Group (BT.A) as it ends its cat-and-mouse with Ofcom. Questor share tip: improving relations with the regulator may allow the group to make better returns from its latest investment programme
HL.
Hargreaves bosses Mark Dampier and Lee Gardhouse refuse to give up bonuses. Two bosses at Hargreaves Lansdown (HL.) who promoted the fallen fund manager Neil Woodford have volunteered to defer their bonuses in the wake of the investment scandal. The failure to give up their bonuses entirely, however, has sparked anger. More than 290,000 clients of the funds supermarket have had £1.6bn trapped in the Woodford Equity Income Fund since withdrawals by investors were suspended on June 3. Mark Dampier, research director, and Lee Gardhouse, the chief investment officer, deferred their annual bonuses as Hargreaves came under fire for backing Woodford while selling down its own stakes in his funds. Dampier and Gardhouse’s pay is not disclosed as they do not serve on the board.
GNK
Greene King (GNK) dividend on the line under new boss Nick Mackenzie. Greene King’s dividend will come into focus this week as the pub group’s new boss faces the City for the first time after the departure of Rooney Anand. Mackenzie, 50, will be tasked with ensuring Greene King continues to pay off debts relating to the acquisition of the rival Spirit pub group in 2015. He will also face questions over his plans for the dividend. He is expected to hold it steady at the full-year results on Thursday. Like all pub groups, Greene King is being hit by a cocktail of increased wages, rising business rates and currency pressure. Trading this year is proving weak compared with last year’s, which was boosted by hot summer weather and the World Cup: Greene King sold 3.7m pints of beer during England’s seven matches.
INTU
Struggling shopping centre owner Intu Properties (INTU) is set to be the biggest victim of Monsoon Accessorize’s company voluntary arrangement (CVA). Monsoon has 19 stores in Intu malls, four of which face rent cuts of more than 50%. A further six will have their rents slashed by more than a third if creditors approve the retailer’s restructuring plan early next month. This year’s flood of CVAs has been particularly painful for Intu because its huge debt pile gives it less room for manoeuvre than other landlords.
FGP
Hedge fund raider Coast Capital threatens to sue FirstGroup (FGP). The New York hedge fund trying to overthrow the board of train and bus giant FirstGroup is threatening to sue its directors if they sign a deal to run the new West Coast rail franchise. Coast Capital has called a vote to oust half the FTSE 250 company’s board and replace them with its own nominees. The 10% shareholder has labelled the six targeted directors — including chief executive Matthew Gregory and chairman Wolfhart Hauser — as “shades of super-destructive to extraordinarily underqualified”.
IQE
Smartphone technology supplier IQE (IQE) could face an investor backlash for paying boss Drew Nelson a bonus. Shareholder adviser Glass Lewis has urged investors to oppose IQE’s pay report after Nelson and operations director Howard Williams were given payouts despite missing financial targets. IQE, which supplies wafer semiconductor technology for smartphone microchips, awarded Nelson and Williams bonuses of £105,000 and £70,000 respectively for last year — the equivalent to a fifth of their salaries. That was despite falling short of targets linked to their awards. IQE said the remuneration committee had “exercised modest discretion to ensure fairness for shareholders and participants”.
WANdisco could be lost in the cloud. This month, Microsoft became America’s most valuable company at $1 trillion. Nadella, who took over in 2014, made a prescient move by shifting towards cloud computing; it is now a market leader. WANdisco is also pivoting towards the cloud. Since listing in 2012, its value has plunged from a peak of £1bn to £233m as the market did not grow as quickly as expected. It has burnt through cash and held a string of rights issues. In February, WANdisco raised $17.5m (£13.8m) through a share placing aimed at expanding relationships with America’s cloud giants. Sales fell 13% to $17m for the year to December, while pre-tax losses swelled from $14m to $19.4m. Things would have looked even bleaker but for a new accounting standard — IFRS 15 — that took effect in January last year. It required WANdisco to book annual subscription sales up front instead of deferring them. Without this, sales would have fallen 38% to $12.2m, with losses at $24m. There were other red flags. In April, WANdisco failed to disclose “bookings” — a measure of all the money a customer has committed to spend. Short-sellers are betting the shares will fall, with 1.8% of them out on loan. WANdisco enjoyed a mini renaissance in the first quarter, with sales rising 38% to $4m as it moves from a licence to a subscription-based model. However, the road ahead looks tough. With 40 competitors doing similar things, WANdisco can hardly claim to have the market to itself. Sell.
BARC
The former chief executive of Barclays (BARC) has been acquitted of charges that he paid secret fees to Qatar to help the bank to avoid a government bailout. The decision that there was insufficient evidence against John Varley, after a high-profile fraud trial, marks a failure of the only attempt in Britain to prosecute a senior banker for the mistakes of the financial crisis. Mr Varley, 63, was acquitted on two charges of fraud over fundraisings in 2008, in which Barclays tried to raise money from investors around the world to remain in private ownership. Royal Bank of Scotland and Lloyds, its rival British banks, had to take huge cash injections from the government, leaving them with large taxpayer-controlled holdings.
WPP
Sorrell’s basket maker lined up for sale. The world’s largest advertising company is set to jettison the shopping basket maker that Sir Martin Sorrell, its former boss, used to found it. WPP (WPP) is finalising the sale of the Kent-based kitchenware maker to its management team, with a deal expected within days, according to industry sources. With an annual revenue of less than £1 million, Wire & Plastic Products will generate an inconsequential sum for its owner, worth £12.5 billion. Nevertheless, the disposal is a symbolic moment for WPP, given the offshoot’s pivotal role in the company’s history. In 1985 Sir Martin bought a controlling stake in Wire & Plastic Products, a listed maker of wire baskets and teapots. He renamed the company WPP and over the next three decades built it into a FTSE 100 advertising and marketing powerhouse. A relentless dealmaker, in 1987 he launched a hostile $566 million takeover of J Walter Thompson, the Manhattan agency. Two years later, the former Saatchi & Saatchi finance director acquired Ogilvy & Mather, another prominent American advertising agency.
GOAL
SPD
Sports Direct tackles five-a-side firm’s board over accounts error. Goals Soccer Centres (GOAL) faces a clash with its biggest shareholder at its annual meeting after Sports Direct International (SPD) threatened to vote against the reappointment of the five-a-side operator’s entire board. The sports chain controlled by Mike Ashley, 54, the retail tycoon, issued a statement saying that it had lost confidence in the six-strong board over its handling of the discovery in March of VAT liabilities of at least £12 million. It accused Goals of a “lack of transparency”. Sports Direct, which has an 18.92 per cent stake in the business, has called for Goals to agree to the appointment of Kroll, the corporate investigator, to conduct “an independent and cradle-to-grave report” into its historical treatment of VAT and its continuing discussions with HM Revenue & Customs.
IQE
A British maker of semiconductor materials has warned that the fallout from America’s ban on Huawei has been much more severe than expected. IQE (IQE) said that its revenues would be significantly lower than a previous forecast because the crisis engulfing the Chinese technology group had led to “unprecedented” upheaval in the semiconductor industry. Drew Nelson, 64, its founder and chief executive, said yesterday that the impact of the restrictions on Huawei had inflicted far more damage than he had anticipated. IQE now expects revenues in the second half of the year to be between £140 million and £160 million, compared with previous City estimates of £175 million.
LLOY
The City watchdog has fined Bank of Scotland £45.5 million for failing to report suspicions of fraud at the Reading branch of HBOS and for omitting to inform the regulator of allegations raised by two police forces. The Financial Conduct Authority imposed the penalty after concluding that Bank of Scotland, now owned by Lloyds Banking Group (LLOY), had not been “open and co-operative” with the Financial Services Authority, the regulator at the time, and had failed to disclose information appropriately. It is the biggest fine that the authority has levied for this type of breach and marks the latest twist over a fraud that took place between 2003 and 2007. The scandal involved companies being damaged or destroyed when consultants linked with a Halifax Bank of Scotland “turnaround” unit asset-stripped their businesses and stole from the bank. The proceeds of the fraud financed luxury holidays and prostitutes.
BT.A
VOD
Leading mobile phone operators are facing allegations of price-fixing and collusion as part of a £1 billion High Court claim over the collapse of Phones4u. Ronan Dunne, the former boss of O2, made “inappropriate” attempts to discuss prices and smartphone sales plans with Olaf Swantee, the former boss of EE, according to claims filed by EE. EE, BT Group (BT.A), O2 and Vodafone Group (VOD) are defending themselves against allegations by the administrators of Phones4u that they colluded, triggering the retailer’s collapse in 2014. Mobile phone networks cut ties with the retailer shortly before its demise and Phones4u was “not viable” without their support, PWC, its administrator, found. Phones4u collapsed with 550 stores and concessions and 5,596 staff. Vodafone, EE and Dixons Carphone took over more than 350 stores and more than 2,000 employees were transferred.
NANO
Analysts join dots to name Apple as costly Nanoco Group (NANO) contract loss. A nanotechnology company whose products are used in high-end television sets lost four fifths of its value yesterday after the defection of a key customer — believed to be Apple. Nanoco, which creates technology to make images appear crisper on screens, revealed that an unnamed American customer would not renew its contract when it expired at the end of the year. The Manchester-based company said that the decision to end the relationship was “wholly unconnected to the performance of our materials and our service delivery”.
DOM
The search for a new chief executive of Domino’s Pizza Group (DOM) suffered a setback yesterday when the frontrunner appeared to rule himself out. Andrew Rennie, head of European operations at Domino’s Pizza Enterprises, the Australian-listed Domino’s franchisee, had been tipped to take over from David Wild as chief executive of its London-listed cousin. Although industry sources had confirmed that Mr Rennie, 51, was in prime position, Domino’s Pizza Enterprises insisted yesterday that there was “no substance to that speculation”. Mr Rennie said: “As a senior executive in this business and a significant holder of [Domino’s Pizza Enterprises] shares, I am invested in our future and look forward to delivering on the growth plans we have outlined to the market.”
OCDO
Ocado Group (OCDO) received a special delivery of its own after analysts at Citigroup upgraded the online grocery group in a note. The Citi team lifted their price target for Ocado from £13 to £14.50, calling it a world leader in the online grocery market and picking out the Ocado Zoom venture, which delivers orders to households in less than an hour and is being tested in west London. With Ocado having struck delivery deals with retailers including Marks & Spencer in Britain, Kroger in the United States and Coles in Australia, the analysts said that they were confident that it would soon agree more and would increase market share more rapidly than rivals. The broker believes that the company could double its share of the online grocery market to 30 per cent.