The Telegraph 16/05/19 - Vox Markets | Vox Markets

The Telegraph 16/05/19

Thomas Cook suffers £1.5bn loss as it confirms ‘multiple’ bids received for airline business. Thomas Cook Group (TCG) said it had received “multiple bids” for all or part of its airline business as the troubled holiday company reported a dramatic increase in losses in the six months to March. The travel agent suffered a pre-tax loss of almost £1.5bn, a near five-fold increase on the £303m loss it endured during the same period last year. A highly promotional environment, driven by political and economic uncertainty, coupled with higher fuel and hotel costs would act as a drag on second half performance and full-year earnings, the company said. It warned that it now expected underlying earnings before interest and tax in the second half of the year would be behind the same period last year.

Just Group plans US exit after sluggish first quarter. Retirement specialist Just Group (JUST) will exit the US as part of a broader strategy to improve its capital position by 2022. The decision accompanied news of a 55% drop in new business sales during the first three months of the year, which prompted a significant sell-off in the shares. The FTSE 250 company, which was forced to raise £375m in March to comply with new capital requirement rules, said it was “absolutely focused” on generating sufficient capital to fund new business within the next few years. This means redoubling efforts to control costs, closing loss-making operations and shifting focus towards more “capital efficient” assets.

Investec closes robo-advice unit after deciding it won’t make any money. Investec (INVP) will offload its Click & Invest unit after the robo-advice business racked up losses of nearly £13m during the year to March. Having taken a £6m write-off against Click & Invest software, the South Africa-headquartered banking and asset management group will close the service to new clients, putting roughly 50 jobs at risk. Co-chief executives Fani Titi and Hendrik du Toit said they would ensure employees were treated with “respect and fairness” in a forthcoming consultation process, while current clients have already been notified to start moving investments elsewhere.

Sophos rallies as it swings to profit in ‘challenging’ year. Oxford-based cyber security company Sophos Group (SOPH) has warned that the “vast majority” of smaller businesses are still not protected against attacks, after a year in which it struggled to keep up the strong growth seen after the WannaCry hack. Chief executive Kris Hagerman said many of the smaller and media enterprises it was selling to were “a little been overwhelmed by the problem, so they don’t have the IT teams, and just want to run their school or retailer or hospital”. He said there “probably is a level of misunderstanding” about the risks, but the “other thing that clearly applies here is there’s an inertia”, where people needed educating that updating their systems would be in their interest. The comments come after Sophos manage to dispel fears over the strength of its business, swinging to a profit despite branding the year “challenging”.

National Grid profits drop as Labour threat looms. National Grid (NG.) profits tumbled by almost a third from the year before following a battering of one-off charges to the business including the collapse of key reactor projects within the UK’s new nuclear programme. The FTSE 100 energy giant laid bare the full financial toll of its woes in the US and the UK on the same day that the Labour party unveiled its sweeping nationalisation plan in full. In its US business a seven month long workers strike dealt a £283m blow to the company after it was forced to hire contractors to replace 1,200 workers who were locked out of the business.

Burberry to close stores as it tells City to wait for the ‘Tisci-effect’. Burberry Group (BRBY) has announced that it will shut 38 shops around the world as the British luxury brand told investors they must wait for a sales boost from new designer Riccardo Tisci’s ranges. The 163-year-old brand, famed for its trench coats and check print, posted flat sales of £2.7bn after suffering from a slowdown of spending by wealthy Chinese consumers, who traditionally drive the majority of sales. Pre-tax profits rose by 7% to £441m while operating profits missed analyst forecasts, dropping by 6pc to £438m on the back of currency movements and the ramping up of investment in new products and designs.

Playtech hit by investor pay revolt. Playtech (PTEC), the company that provides gambling software to some of the world’s biggest bookmakers, has been left bruised by investors, which revolted against executive pay at the company’s annual general meeting on Wednesday. Chairman Alan Jackson also received a substantial vote against his re-election despite the company announcing last month that a search for his replacement has started. More than 40% of shareholders voted against Playtech’s remuneration policy and report. Despite the substantial vote against pay, the ballot represented a swing from last year when a majority voted against executive pay.

Non-Standard Finance declares Provident bid unconditional. Non-Standard Finance (NSF) will push ahead with its £1.3bn hostile bid for larger rival Provident Financial (PFG) after declaring the deal unconditional. The company had until 5pm on May 15 to reveal whether or not the unsolicited approach had received a valid number of acceptances for it to proceed. NSF needed valid acceptances for 90% of Provident shares for the deal to move forward, but lowered the threshold to 50% to get the deal over the line. To date, NSF has received acceptances in respect of Provident shares amounting to 53.53% of Provident’s issued share capital.

Babcock rebounds after latest attack. Babcock International Group (BAB) bounced back from early losses after rebutting “malicious” claims made in the latest attack on the defence contractor by a mysterious research group. The Boatman Capital Research claimed that Babcock needed to write down its Defence Support Group business after overvaluing its main contract by £50m, an impairment it said would be equivalent to 13% of its profit. The anonymous group made a first stinging attack on Babcock’s management last October with long-serving chairman Mike Turner stepping down months later amid mounting pressure from investors.



Mentioned in this post

Babcock International Group
Burberry Group
Just Group
National Grid
Non-Standard Finance
Provident Financial
Sophos Group
Thomas Cook Group