was thrown into fresh crisis after its auditor Grant Thornton resigned, casting doubt over the retailer’s future as a listed company if it fails to find a replacement. The auditor is understood to have told Sports Direct last night that it was severing ties after more than a decade scrutinising its finances. The news leaves Sports Direct scrambling to find a new auditor from September 11 when Grant Thornton will formally dump its obligations. The high street giant has asked the Government what the next steps are if it cannot draft in a new firm, the Financial Times reported. Business secretary Andrea Leadsom has the power to appoint an auditor to a quoted company if it fails to find one itself. However industry sources said that such a move would be “uncharted territory” and it could even lead to a de-listing if Sports Direct goes without an auditor for too long.
Prudential (PRU) will relabel its British arm as M&G Plc after completing a £7bn demerger at the end of the year. The plan will result in two separate listed businesses: M&G, comprising its UK and European savings and insurance business and its M&G fund management arm; and Prudential, which will focus on wealthy US retirees and fast-growing markets across Asia. M&G will retain the Prudential name on certain products for its five million customers in the UK and Europe. Current M&G Pru chief John Foley confirmed the split would happen in the fourth quarter of 2019, once shareholders had voted in favour of the new listing. Mr Foley said once it was independent, the business would be able to forge its own “corporate identity”.
The boss of FirstGroup (FGP) dismissed suggestions that a pending legal challenge by its rivals for the West Coast and HS2 franchise could derail his company’s contract to operate the lines. FirstGroup and its Italian partner, Trenitalia, won the right to operate Britain’s most profitable rail franchise through First Trenitalia, a 70/30 joint venture, it was revealed on Wednesday, confirming a Telegraph report in June that the pair were set to win the tender. The deal also covers the operation of the HS2 high speed railway, which is due to operate on part of the route from 2026. However, there remains doubt over whether the project will be completed, with Boris Johnson’s government currently reviewing its options. A “go or no go” decision on HS2 would be made by the end of the year, transport secretary Grant Shapps told Sky News. Judges have given train companies Virgin, Stagecoach Group (SGC) and Arriva the green light to haul former transport secretary Chris Grayling before the High Court after they were barred from bidding for rail franchises earlier this year. The companies’ bids were deemed “non-compliant” after they refused to take responsibility for billions of pounds of pension liabilities.
The boss of car dealer Lookers (LOOK) has said the sector will face greater scrutiny by financial watchdogs as motorists increasingly rely on credit to buy their set of wheels. Earlier this year the Financial Conduct Authority announced it was investigating sales practices at Lookers, one of the country’s biggest car dealers. The news caused the company’s shares to plunge 25%, while a profit warning the following month pushed them down a further 20%. Lookers boss Andy Bruce predicted the regulatory probe could signal the beginning of much closer interest in how the car sales process operates. “The car industry is being held to a higher standard than it is used to and facing more scrutiny,” said Mr Bruce, noting that FCA had not actually started examining Lookers’ documents yet. “First the FCA looked at financial services, then moved into financial products in retail, and now the car sector – it’s inevitable.”
The boss of builder Balfour Beatty (BBY) called on Boris Johnson’s new Government to clarify its plans for HS2 and Heathrow Airport’s proposed third runway, warning that “delay and procrastination is the enemy of our industry”. Leo Quinn, who has been leading a turnaround of Balfour since 2015, said the cancellation of HS2 would be “a huge disappointment and a real setback for the whole industry”. Mr Johnson has been a vocal critic of Heathrow expansion and is reportedly considering scrapping the southern phase of HS2 amid spiralling costs. Mr Quinn said: “Keeping confidence that these projects will go ahead is paramount to ensuring we retain the capability to deliver them. We are ready and able to deliver them, we just need somebody to throw the switch.” He was speaking after Balfour reported a 26% rise in profits to £63m for the first half of the year as it continues to defy a malaise sweeping the construction industry. Balfour has bounced back from a series of setbacks that left its finances in the doldrums five years ago. The company’s strong profits allowed it to raise its dividend by a third to 2p per share. Balfour has bolstered its margins and tackled its debts by being more selective about the contracts it takes on.
Avast Software (AVST) posted a surge in profit at the start of the year as customers flocked to its anti-virus products. The Prague-based company said there had been robust demand for its virtual private network (VPN) products and anti-tracking software in the six months to the end of June. Revenue rose 5.8% to $426.8m (£353m) helping drive pre-tax profits up by 4.3% to $186m.
Intu Properties (INTU) rose 3.05p to 39.35p, in an apparent reaction to moves made by fund manager Crispin Odey, whose fund reduced its short position in the stock from 5.8% to 3.1%. Odey Asset Management’s reduction can be seen as a verdict that the landlord’s shares – which have fallen hard lately – may be close to bottoming out.
Admiral Group (ADM) boss David Stevens described the latest numbers from the UK insurer as “a bit dull”, after revealing that half-year profits held steady despite a £33m blow from an unexpected change in the Ogden rate. The Ogden discount rate is used to calculate the possible return accident victims should expect from investing their lump sum compensation payments. The higher the Ogden rate, the less insurers shell out, as it assumes better returns. Following a recent Government review, the rate rose to -0.25% from -0.75%, although this fell short of the expected range of between 0% and 1%. Admiral had pencilled in a 0pc estimate as of December 2018. Mr Stevens said: “If it’s a can’t-put-down, read-in-one-go page-turner that you’re after, then I’m afraid our half-year results don’t fit the bill. “Turnover up mid-single digits, profit up low-single digits. Hardly ‘hold the front page’,” he added.
