The Telegraph 14/03/19 - Vox Markets | Vox Markets

The Telegraph 14/03/19

The chief executive of Royal Dutch Shell ‘B’ (RDSB) will take home more than £17m for 2018 after doubling his pay packet from the previous year. Ben Van Beurden was awarded a total of €20.14m (£17.21m) for the year in which Shell’s profits bounded to their highest in four years. However, the bulk of his bumper pay packet was due to long-term remuneration rewards for his achievements since the oil market crash that vested last year. Shell’s long-term incentive plan paid out €15.2m to Mr Van Beurden last year, compared with just €4m in 2017. The bumper payday means Shell’s chief executive is paid 143 times what the average employee is paid.

The boss of OneSavings Bank (OSB) said the bank was moving ahead with its tie-up with rival Charter Court Financial Services Group (CCFS) despite Brexit uncertainty as he did not want to be “frightened” and controlled by the UK’s departure from the EU. The two specialist mortgage lenders agreed to terms of a £1.6bn deal on Thursday amid a week of Brexit chaos. The Government’s failure to agree a suitable deal has already caused significant problems for the UK housing market. “The timing around Brexit is an interesting one – the thing is, Brexit is there, we can allow it to control us and make us frightened and stop doing things [or we can get on with it],” said chief executive Andy Golding.

DFS Furniture (DFS) is planning to turn its Sofology business into a nationwide chain after it helped profits to double, but warned that falling consumer confidence would dent sales this year. Sales at Sofology arm, which DFS bought for £25m in 2017, rose 21% in the six months to December. Tim Stacey, who took over as chief executive of Britain’s largest furniture maker last year, said Sofology had performed “incredibly well”. “We’ve owned it for the full period and that has enabled us to get behind the marketing investment and provide the business with working capital to it needs to grow,” he said.

Property agent Savills (SVS) warned that sales would be hit by volatility on global markets this year as it unveiled a dip in annual profits. Mark Ridley, who took over as chief executive in January, said it was difficult to predict how economic disruption including Brexit and trade tensions between the US and China were likely to play out but that the quantity of deals were likely to fall in some markets as a result. He added: “I would hope the somewhat macro uncertainty may be clearing in the second half of this year and that will improve transaction volumes worldwide.”

Cineworld Group (CINE) is targeting a spot in the FTSE 100 after hailing the success of its blockbuster takeover of US chain Regal. Mooky Greidinger, chief executive, insisted Cineworld’s £2.7bn acquisition had “exceeded expectations” with annual pre-tax profit more than doubling. Cost savings last year of $70m from the deal exceeded expectations of $45m, while synergies this year will be $50m higher than the $100m previously guided. Cineworld shares rose more than 6%, putting it on the cusp of the blue-chip index. While the company had missed out after this week’s index reshuffle, Mr Greidinger added that in the future: “We’ll be there.”

The boss of Capita (CPI) has hit out at critics of its controversial British Army recruitment campaign, insisting its posters targeting “snowflakes”, “binge gamers” and “selfie addicts” had been a “phenomenal success”. Launched in January, the ‘Your Army Needs You’ campaign provoked a backlash on social media from those who claimed it trivialised life in the armed forces and was an insult to those who currently serve. But Jon Lewis, who has been leading Capita through a sweeping turnaround for the past year, said: “We had a whole bunch of people of a different demographic, shall we say, who were less than impressed – they’re the people who had to Google what ‘snowflake’ meant.

Sports Direct International (SPD) offers £150m loan to bail out Debenhams (DEB). Sports Direct has offered Debenhams an alternate £150m deal, just days after the troubled high street retailer revealed it was in crunch talks with its lenders over a bailout of the same amount. In a brief statement Sports Direct said that the loan would be “guaranteed to be interest-free” if the fashion house issues 5% new shares to the company and appoints retail tycoon Mike Ashley as director and chief executive. “If such approvals were not forthcoming, the loan would bear interest at 3%,” it said. A total of £40m would be used to repay Debenhams’ bridge facility for 12 months with the remaining £110m available for general working capital.

Avast Software (AVST) CEO steps down less than a year after UK’s biggest tech listing. Te chief executive behind one of Europe’s biggest technology floats of 2018 has stepped down only ten months after listing on the London Stock Exchange. Vincent Steckler, who has led anti-virus software provider Avast since 2009, said that he plans to retire this year. He will be succeeded by the president of the company’s consumer business, Ondrej Vlcek. In May 2018, Mr Steckler led Avast to its debut as the largest UK technology float on the London Stock Exchange, with a market value of more than $3bn (£2.5bn). Mr Steckler also led the Czech company through its major acquisition of AVG and is credited with growing its revenues from $20m to $800m in a decade.

Drugs maker Hikma Pharmaceuticals (HIK) back in black despite fierce competition. Hikma has swung back into profit after putting the hefty costs associated with an acquisition two years ago behind it. The Jordanian generic drug maker made a $293m (£223m) pre-tax profit in 2018, compared to a $738m loss a year earlier, when it booked a massive impairment charge and paid restructuring costs for its acquisition of Roxane Laboratories, now renamed West-Ward Columbus. Siggi Olafsson, Hikma’s Icelandic chief executive, said 2017 had been a tough year, but that the teething problems related to Roxane were now behind it. “We have a new team in place and are on track with our plan for growth,” he added.

British American Tobacco (BATS) – Tobacco giants fear fresh crackdown. Big Tobacco stocks went up in smoke as hopes of escaping a punitive crackdown in the US faded and the American drugs watchdog stepped up its attack on teen vaping. Ned Sharpless, the National Cancer Institute’s director, will become the US Food and Drug Administration’s acting head, stoking fears that he will continue his predecessor’s drive to cut smoking rates. Jefferies analyst Owen Bennett warned investors that the appointment will raise concerns over a possible ban on menthol cigarettes, given Mr Sharpless’s current role and his “enthusiastic support for [Scott] Gottlieb’s aggressive approach to tobacco control”.

Prudential (PRU) shifts £37bn to Luxembourg ahead of Brexit. Britain’s biggest insurer has shifted billions of pounds worth of assets into Luxembourg ahead of Brexit, joining the long list of banks, asset managers and insurers that have moved nearly £1 trillion out of the UK. Prudential revealed that it had spent £27m preparing for Brexit, which includes setting up an operation in Luxembourg, and has transferred £37bn in customer assets to the EU hub. The figures emerged days after think tank New Financial identified more than 275 firms that have moved or are moving some of their business, staff, assets or legal entities from the UK to the EU in preparation for Brexit.

Provident Financial swings to profit as it fights takeover. Troubled Provident Financial (PFG) swung to a profit as it prepares to convince City investors that a £1.3bn hostile takeover bid is a bad idea. Chief executive Malcom Le May is set for a series of one-on-one meeting with top shareholders to convince them that the doorstep lender has a “very compelling story” and does not need to be bought. “I’ll keep articulating that to whoever wants to listen to me, including those shareholders who initially saw merit [in a takeover by Non-Standard Finance (NSF)],” he said.

Dignity defends pricing as watchdog probes funeral sector. Funeral provider Dignity (DTY) has mounted a defence of its pricing and service after suffering a “challenging year” marked by a fierce price war and an impending competition probe into the sector. Dignity boss Mike McCollum insisted the company “offered the highest levels of client service” and said it had cut prices well in advance of the Competition and Markets ­Authority opening an inquiry into “unaffordable” funeral plans. “The changes in our pricing last year predated the CMA [probe] by about six months. We are very much reacting changing competitive market environment,” he said.

Stobart cuts dividend in fresh blow to feuding shareholders. Aviation and energy conglomerate Stobart Group Ltd. (STOB) has cut its dividend and will use the cash to expand Southend Airport in a move likely to aggravate two of its biggest investors. The company will lower its investor payouts from 15p to 6p a share as it looks to boost footfall through the Essex airport, which is seen as key to its growth plans. The move means that the annual dividend cheques received by former chief executive Andrew Tinkler and star fund manager Neil Woodford, who between them own more than 85 million shares according to Bloomberg filings, will fall by almost £8m. Last year the pair attempted to oust Stobart’s chairman in one of the biggest boardroom bust-up of 2018.

Questor: buy this trust for a stake in ‘Europe’s third-largest software company’. Questor investment trust bargain: HGCapital Trust (HGT) buys stakes in unlisted firms, many of which operate in profitable niches. Collectively they would amount to a very large business

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Mentioned in this post

avst
Avast Software
BATS
British American Tobacco
CCFS
Charter Court Financial Services Group
CINE
Cineworld Group
CPI
Capita
DEB
Debenhams
DFS
DFS Furniture
DTY
Dignity
HGT
HGCapital Trust
HIK
Hikma Pharmaceuticals
NSF
Non-Standard Finance
OSB
OneSavings Bank
PFG
Provident Financial
PRU
Prudential
RDSB
Royal Dutch Shell \'B\'
SPD
Sports Direct International
STOB
Stobart Group Ltd.
SVS
Savills