Advertising mogul Maurice Saatchi has quit the agency which bears his name, days after an accounting error sent shares plunging 45%. The Tory peer, one of the greatest admen of his generation, stood down as an executive director of M&C Saatchi (SAA) on Tuesday night as part of a boardroom clear-out. He quit alongside non-executives Lord Dobbs – author of political thriller House of Cards – Sir Michael Peat and Lorna Tilbian, as the company battles for stability following an announcement that it had overstated profits by nearly £12m. Insiders said the departures follow a split over the direction of the business.
Nervy investors pulled almost £140m out of property funds in just three days amid fears of a wave of suspensions after withdrawals were blocked by M&G PLC (MNG). The firm suspended its £2.5bn Property Portfolio fund last Wednesday after investors headed for the exits in droves, amid fears of a slump in the value of retail real estate due to a crisis on the high street. It sparked fears of contagion across the industry – panicking investors in other property funds, who have rushed to demand their money back. A total of £138m was withdrawn on the three trading days immediately after the M&G fund suspension according to data from Calastone, which processes funds transfers.
The boss of Lloyds Banking Group (LLOY) has been forced into a humiliating apology after major flaws were found in a compensation scheme for victims of Britain’s biggest ever bank fraud. Antonio Horta-Osorio said sorry after a review branded aspects of the programme “neither fair nor reasonable”. The conclusions from retired High Court judge Sir Ross Cranston is a blow for Mr Horta-Osorio as he struggles to move on from the fraud at the Reading branch of Hbos, which Lloyds subsequently bought during the financial crisis a decade ago. Criminal banker Lynden Scourfield and his cronies deliberately wrecked dozens of struggling small businesses, spending the profits on prostitutes, holidays and luxury goods.
Market opening hours could be slashed by the London Stock Exchange Group (LSE) in a bid to improve traders’ work-life balance. The business is asking City workers whether the market should be open for a shorter time than the current 8am to 4.30pm as part of a consultation on how to bring more women and disabled people into the industry. Industry groups have repeatedly called for a shortening, arguing that the average London trader works a 60-hour week once extra time before and after the daily session is factored in. Only one in eight people working in London’s trading firms is female, according to figures released last year by the Financial Conduct Authority.
Ted Baker (TED) stunned the City on Tuesday with a shock profit warning and the departure of its chief executive and chairman, sparking speculation the ailing retailer is now a takeover target. Last night it emerged that activist investor Toscafund has built a 5.9% stake in Ted Baker. The aggressive hedge fund, founded by Martin Hughes, has a reputation of pushing for change at companies such as Speedy Hire, the tool rental business. Earlier in the day Ted Baker warned in a brutal update to shareholders that the past 12 months had been the “most challenging in our history” as it battles to recover from a harassment scandal and an accounting crisis, as well as struggling with a wider downturn.
The long-serving chairman of Domino’s Pizza Group (DOM) will step down in the wake of a US hedge fund wrestling control of a boardroom overhaul. Stephen Hemsley, who took the role in March 2010, will leave on Dec 29 and be replaced temporarily by the senior independent director Ian Bull. The company said in October it had hired headhunter Heidrick & Struggles to find a new chairman and that the search was progressing. A new chairman will be named before a new chief executive is appointed to replace David Wild, who said in August that he was retiring. The move comes after activist investor Browning West was given a board seat and help pick a new chairman and chief executive along with Mr Bull.
Tullow Oil (TLW) has been plunged into crisis after it ousted its boss, slashed production forecasts and axed the dividend – sending shares crashing to a 20-year low. The Africa-focused business’s stock fell 71.8% to its lowest since 1999, wiping £1.4bn off the value of the company as chief executive Paul McDade and exploration director Angus McRoss quit by mutual agreement. The firm – which was worth £14bn at its peak in 2012 – is now the biggest percentage faller on the FTSE 350 this year barring companies which have gone into administration. It will trigger massive paper losses for thousands of retail investors, who hold around 15% of Tullow’s stock between them.
Equipment hire company Ashtead Group (AHT) warning of a slowdown at its dominant US business has scared investors away from the business. Ashtead derives more than 80% of its sales in the US. However, despite posting group revenues up 14% to £2.68bn in the first half and pre-tax profits 6% better at £660m, concerns about US demand saw shares drop 7.5% to £21.89. Updating on progress in the six months until the end of October, new chief executive Brendan Horgan warned that the US was seeing a “lower rate of growth compared with recent years”. This, he said, was putting pressure on operations that Ashtead.
Questor: Smith (DS) (SMDS) needs watching but the yield and valuation make it a hold for now. Questor share tip: recent rise in profits could be short-lived if prices come under sustained pressure – but we shouldn’t overdo the gloom
