The Telegraph 12/03/19 | Vox Markets

The Telegraph 12/03/19

Domino’s Pizza Group (DOM) has refused to backtrack on its ambitious growth plans despite serving up a “mixed year” and warning store openings will slow over the coming months. The company’s expansion plans have been knocked off course as its franchisees dig their heels in and demand a larger slice of the profits. Domino’s is the master franchisee in the UK, Ireland and a handful of European countries. It relies on its franchise partners to open new stores and boss David Wild has committed to a target of having 1,600 in its home market. But after a record 95 openings in 2017, Domino’s was forced to downgrade its projections and ended last year with 59 new sites.

Mothercare (MTC) is to sell the Early Learning Centre to toy retailer The Entertainer for £13.5m as it grapples with its turnaround. The embattled retailer, which staved off collapse last year by shutting 60 stores and going cap in hand to shareholders to raise £30m, said the sale of the baby toy business was its “next step toward being free of bank debt”. As part of its radical rescue plan Mothercare is shifting its focus from its shrinking UK business towards its international arm, which makes the bulk of revenues.

French Connection Group (FCCN) has blamed a “difficult” retail backdrop in the UK for another heavy slide in sales as the company searches for a new owner. The fashion brand, which peaked in the 1990s on the back of its cheeky FCUK logo, put itself up for sale last October and said on Tuesday that it expected to conclude the process by the first half of the year. It is understood that septuagenarian founder Stephen Marks, who owns a 42% stake, wanted the business to make a profit before letting go of the chain and today toasted a meagre £100,000 of operating profits, although it continued to make a £9.3m loss on a pre-tax basis.

British private security firm G4S (GFS) is reviewing offers for a potential sale of its armoured van division after reporting a 55% plunge in full year profits. A number of private equity firms and public companies have shown interest in the asset, although G4S warned a sale was not guaranteed. The FTSE 250 company added that it could still spin the delivery unit off in a demerger, partial separation or public listing. Chief executive Ashley Almanza said: “We are 12 weeks into the separation review. All of the options are credible. It is better for us to have more than one option [and] we’re pursuing all of them.”

Cairn Energy (CNE) long-running tax dispute with the Indian government has dragged the London-listed oil explorer to a huge annual loss. The embattled oil producer laid bare the toll of its Indian legal woes after revealing earlier this week that a resolution of the 12-year dispute was not likely until late this year. It conceded a further hit to its full-year financial results by downgrading its flagship North Sea project after the Kraken field failed to live up to expectations. Cairn took a $166.3m charge after cutting its Kraken reserves by a fifth following sluggish production from the field.

The boss of Aldermore Group (ALD) said he expects to see more M&A deals struck between Britain’s smaller banks as they fight to increase their profile. Former Barclays’ executive Phillip Monks, who set up the bank in 2009, said some of the country’s so-called challenger banks are “incredibly undervalued” and may seek a tie-up to increase their profile. Aldermore was acquired by South Africa’s FirstRand early last year. “It’s quite likely you’ll see more consolidation with the ‘mini me’s’ of the big banks,” he said. “Smaller specialised lenders can exist in isolation, the need for acquisitions isn’t so prevalent.”

Unilever (ULVR) has revealed that its former boss Paul Polman was paid a total of €11.7m (£10m) for his final year at the company, a combination of his fixed salary, an annual bonus and long-term incentives. Mr Polman, who had been at the helm for a decade, announced in November that he was leaving the FTSE 100 conglomerate at the end of the year and would be succeeded by company lifer Alan Jope from Jan 1. While Mr Polman was a paid a fixed salary of €1.6m for 2018, Mr Jope is due to receive €1.45m this year, although he could also receive annual bonuses worth up to €3.3m as well as shares ­worth up to €1.7m under the consumer goods giant’s long-term incentive plan.

Shoppers at Sainsbury (J) (SBRY) owned Argos will now be able to pick out and buy items by taking a picture with their smartphone camera, the retailer announced on Monday. Using a new “visual search” app from the home and technology retailer, shoppers will be able to search Argos’s catalogue of products to find the same or similar items. Best known for its bulky paper catalogues, Argos has adopted the new search function to let shoppers find items that match what they want with just a picture using image search technology and machine learning that recognises distinctive features of furniture. Shoppers can then place an order for the product using the app.

Shipbroker Clarkson (CKN) sank to a two-month low after warning that it was navigating choppy waters as the industry grapples with the US-China trade war and the fallout from the Vale dam disaster in Brazil. Chairman Bill Thomas admitted that “geopolitical uncertainty” stoked by trade tensions and Donald Trump’s oil sanctions on Iran had weighed on its performance this year. Its dry cargo business has also been affected by Brazilian mining giant Vale disrupting the iron ore market by curbing production in the wake of the fatal dam disaster in Minas Gerais.

Provident Financial (PFG) has dismissed Non-Standard Finance (NSF) £1.3bn hostile takeover bid as “financially flawed” after NSF unveiled details of its offer over the weekend. The two sides have been locked in a bitter war of words since NSF launched its surprise attack last month, when Provident chairman Patrick Snowball received a voicemail at 6.45am giving him a 15-minute warning that an offer was about to be announced. On Monday Provident told investors that NSF’s plan – detailed in an offer document over the weekend – was “strategically and financially flawed” and “presents significant risk”.

Ryanair Holdings (RYA) will gag British investors in the event of a no-deal Brexit in a bid to keep its aircraft flying. The Irish airline laid out plans on Monday to “protect the company’s EU licences post-Brexit” that also include preventing Britons from buying new shares. UK shareholders will be issued with a “restricted share notice” under a no-deal Brexit that would strip them of voting rights and prevent them from attending or speaking at general meetings. The plans, approved by Ryanair’s board on Friday, would become effective on the day the UK left the European Union without a deal – a “hard Brexit” day.

Troubled contractor Kier Group (KIE) shocked investors by admitting its debt pile was £50m higher than it had previously thought. An accounting error in Kier’s half-year results at the end of December meant net debt was £181m rather than £130m. Shares fell 12% in lunchtime trade, wiping out some of the gains made since Kier’s calamitous emergency rights issue at the end of last year. The HS2, Crossrail and Hinkley Point C contractor said the upward loan revisions related to changes to a £40m “debt reclassification” and a £10m increase relating to the company’s hedging activities.

Questor: sell a business, cut debt and make yourself less risky – why Smith (DS) (SMDS) is worth holding. Questor share tip: it sounds simple, but the packaging firm’s recent disposal of its plastics arm could tempt investors back into the stock



Mentioned in this post

Aldermore Group
Cairn Energy
Domino\'s Pizza Group
French Connection Group
Kier Group
Non-Standard Finance
Provident Financial
Ryanair Holdings
Sainsbury (J)
Smith (DS)