The Telegraph 12/02/19 - Vox Markets | Vox Markets

The Telegraph 12/02/19

Debenhams (DEB) has been given breathing space after agreeing a £40m credit line from its existing lenders. The struggling department store chain, which has 165 shops in the UK and Ireland and 26,000 employees, said the facility will help “facilitate a broader refinancing and recapitalisation”. Sergio Bucher, chief executive said the move “represents the first step in our refinancing process”. “The support of our lenders for our turnaround plan is important to underpin a comprehensive solution that will take account of the interests of all stakeholders, and deliver a sustainable and profitable future.”

Online trading platform Plus500 Ltd (DI) (PLUS) has fallen victim to an EU regulatory crackdown with shares tumbling more than a third on Tuesday. The Israeli company said profits would be “materially lower” than City expectations as European regulations are implemented to curb the use of highly speculative financial bets. The stock market selloff will be welcomed by a clutch of hedge funds, which have built large short positions against Plus500. Trading income for 2018 rose by two-thirds to $720m (£560m) and pre-tax profit almost doubled to $503m. However, with much of this good news priced into the company’s stock market valuation, shares sank to a 12-month low. They have almost halved since August.

AA (AA.) insisted its turnaround was on track despite a membership slump as it trumpeted a series of key wins to supply breakdown cover to business clients. The company, which is struggling under billions of pounds of debt left by its previous private equity backers, said it was on course to make more than £340m in pre-tax profits this year – £2m above what City analysts had pencilled in. Personal memberships continued to fall, slipping 2% to 3.2m during the year to January, but the AA does the majority of its work for corporate clients.

A British data firm has snapped up a US rival to build out its identity verification business in the US in a £232m deal. GB Group (GBG), an Aim-listed data company, confirmed it will buy out IDology, an Atlanta-based competitor, which will allow it build its presence in North America. The Chester-headquartered company provides background-checking services and ID verification on 4.4 billion people globally, with clients including payments giant Stripe, betting shop William Hill and Waitrose. The deal will see GBG raise an additional £160m in financing through a new share placing plus a new £84m bank facility. GBG’s share remained steady at 424p.

TUI AG Reg Shs (DI) (TUI) has blamed a hot summer that resulted in slower bookings and the weak pound for losses more than doubling in the final quarter of last year. The FTSE 100 travel operator said underlying losses before interest, tax and other charges was €83.6m (£73.3m), up from €36.7m in the same period of 2017 despite a 4.4% rise in revenues to €3.7bn. The results were in line with expectations. The company said its airlines and tours division continued to face “headwinds” due to lower than expected winter and summer bookings as well as an unusually hot summer last year, with losses 26% wider at €178.1m.

Petrofac risks £400m shareholder claim over bribery scandal. The oil services giant at the centre of a global corruption scandal could soon be taken to court by its own shareholders. Petrofac Ltd. (PFC) may be forced to face a legal claim after a string of bribery and corruption allegations halved the UK-listed company’s market value, according to legal funding firm Innsworth. The “vulture capitalist”-backed litigation investor sounded the warning shot after Petrofac’s former sales boss pleaded guilty to 11 counts of bribery last week. The claim is understood to have attracted interest from major institutional shareholders on Petrofac’s register and could amount to more than £400m in damages.

CMA delays final decision on Sainsbury-Asda merger by two months. The competition watchdog has extended its deadline for a final decision on the proposed merger of Sainsbury (J) (SBRY) and Asda by almost two months. The Competition and Markets Authority said there were special reasons why the original March 5 deadline had been pushed back to April 30, citing the “scope and complexity of the investigation”. It added that it needed to consider issues raised by both supermarkets and third parties, as well as the need to reach a fully reasoned provisional decision.

Acacia Mining makes ‘progress’ on Tanzanian dispute and returns to profit. The interim boss of Acacia Mining (ACA) said that talks to resolve an ongoing dispute with the Tanzanian government were “progressing in the right direction” as the miner swung back to profit. The FTSE 250 company, which is 64% owned by Canadian miner Barrick, posted pre-tax profits of $96m (£74m) for the year to Dec 31. This compared to losses of $709m for 2017 amid a ban on selling powdered gold concentrate by the government of Tanzania and an impairment charge of $850m. The company runs three mines in the country.

Just Eat activist investor demands merger with delivery rival. A US activist investor has ratcheted up the pressure on Just Eat (JE.), issuing a withering attack on executives that demands handing control to a rival through a delivery mega-merger. Cat Rock, who was credited for the ousting of chief executive Peter Plumb last month, accused Just Eat of “repeating past mistakes”. It claims attempts to work with the board following Mr Plumb’s exit, including recommending candidates for his replacement, have been rebuffed. Just Eat executives allegedly refused to meet with the US fund, which has a 2% stake in the company, and replaced the boss of its sprawling Canadian arm – a decision Cat Rock labelled “misguided”.

Imperial Brands chairman to step down. Imperial Brands (IMB) confirmed that Mark Williamson will step down as chairman after new corporate governance rules and investor concern triggered speculation about his departure. He has been on the board of the FTSE 100 company for 12 years, putting him at odds with the nine-year limit set by the new UK corporate governance code. The tobacco group said it has been engaged in succession planning to replace Mr Williamson, who also chairs FTSE 250 engineer Spectris and is on the board of National Grid. Imperial said: “Mark will remain as chairman until his successor has been found and to ensure an orderly handover of responsibilities. A further announcement will be made upon the appointment of his successor.”

British American Tobacco strikes first sports sponsorship deal in 13 years. British American Tobacco (BATS) is to restart sports sponsorship for the first time in more than a decade – but it will not be promoting its cigarette brands. The tobacco giant will return to Formula One, with its vaping brands emblazoned on McLaren’s racing cars. BAT ended sports sponsorship in 2006, bowing out after a Europe-wide crackdown on tobacco sports advertising. McLaren is to unveil its 2019 car on Thursday. BAT, whose brands include Rothmans, Dunhill and Camel, historically enjoyed a long association with F1 in particular.

Questor: this overlooked precision engineer trades on just six times earnings. Buy. Profits at Renold (RNO) have been depressed but any recovery could start to make the stock look very cheap indeed

 

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Mentioned in this post

ACA
Acacia Mining
BATS
British American Tobacco
DEB
Debenhams
GBG
GB Group
IMB
Imperial Brands
JE.
Just Eat
PFC
Petrofac Ltd.
PLUS
Plus500 Ltd (DI)
RNO
Renold
SBRY
Sainsbury (J)
TUI
TUI AG Reg Shs (DI)