The Times 12/07/19 - Vox Markets | Vox Markets

The Times 12/07/19

The chief executive of Land Securities Group (LAND) has resigned after eight years. Rob Noel will leave Landsec next year after his successor is appointed, handing over the management of a £13.8 billion portfolio that includes the £4 billion Nova regeneration project in Victoria and the Bluewater shopping centre in Kent. Mr Noel, 55, who earned £1.6 million last year, said that he was ready for a break after working “flat out” in the property industry for 33 years. He took over from Francis Salway as chief executive of the FTSE 100 company in 2012, having built a reputation as a tough-talking manager with a good read on the market. During his tenure he has sold £8 billion of assets and reinvested £8 billion in new developments, overseeing projects including the Walkie Talkie skyscraper in the City of London. The building sold for £1.28 billion in 2017, the largest amount paid for an office building. “We’ve changed the skyline of London, rebuilt Victoria and [parts of] Leeds and Oxford city centres,” he said of his time at the company. “It’s been great fun and really busy.”

Senior executives of Reckitt Benckiser Group (RB.) face pressure to return lucrative bonuses after it agreed to pay $1.4 billion to resolve long-running US investigations into the sales and marketing of a treatment for opioid addiction. The company said it had reached a settlement with the US Department of Justice and the Federal Trade Commission relating to a $3 billion indictment issued in April against Indivior, the UK-listed drugs company it spun off in 2014. The settlement is the largest recovery by the US in a case concerning an opioid drug. The authorities made a string of allegations against Indivior, including that it made unsubstantiated claims about the safety of Suboxone Film in an attempt to boost sales.

Indivior (INDV) raised its annual forecasts yesterday after its controversial Suboxone Film treatment performed more strongly than expected. In a surprise update, Indivior lifted its net revenue and net income expectations for 2019 after the anti-opioid addiction treatment, which is battling generic competition, lost market share at a slower rate than anticipated in the first half of the year. Indivior said that group net revenue was set to be in the range of $670 million to $720 million, up from $525 million to $575 million, and net income between $80 million to $130 million, up from a loss of $40 million to profit of $10 million.

Shareholders at Telford Homes (TEF) have staged a rebellion over the reappointment of PWC as auditors. Only 56% of the housebuilder’s shareholders voted in favour of reappointing PWC at the company’s annual meeting yesterday. ISS, the shareholder adviser, called for a vote against the firm because of its work for Redcentric, the technology services provider. PWC and two of its partners were fined a total of £4.8 million by the audit regulator last month over a £25 million hole in the books of Redcentric that caused shares to crash. ISS said that no concerns had been raised with Telford’s accounts but cited concerns about “the effectiveness of the processes in use by the auditors”.

The furniture retailer DFS Furniture (DFS) has defied pressure on the high street by reporting a strong rise in underlying sales. It said in a trading update that underlying gross sales rose 7% in the 52 weeks to the end of June compared with the year to July 28, 2018. This growth included a 17% rise in online sales. DFS did not publish in-store sales, but analysts at Peel Hunt said that like-for-like sales were up 2 to 3%. DFS said underlying pre-tax profits for the year are expected to be “slightly above” £50 million, compared with £38.3 million last year.

Times have been turbulent for the airline industry over the past two years as it has battled against rising costs for fuel, carbon and other operating charges, leading a number of small airlines to collapse. However, Thomas Cook Group (TCG) surged 1¼p to 13¼p after Dart Group (DTG), the owner of Jet2, one of Britain’s biggest airlines, reported pre-tax profit up 36% to £177.5 million from revenue 32% better at £3.14 billion. Dart climbed 38p to 880p.

Housebuilders were enjoying their best day in nearly a month. The Royal Institution of Chartered Surveyors’ monthly survey showed tentative signs of recovery in Britain’s housing market in June, with prices widely rising, except in London and southeast England, for the first time since shortly after the Brexit vote in 2016. Taylor Wimpey (TW.) climbed 2½p to £161p, Berkeley Group Holdings (The) (BKG) added 53p to £37.92 and Persimmon (PSN) rose 17½p to £19.03. Barratt Developments (BDEV) gained 30¼p to 614½p — hitting an eight-month peak — boosted by confident notes from analysts at Morgan Stanley, who raised their price target from 625p to 675p, and Berenberg, who pushed up their target from 650p to 670p.

British American Tobacco (BATS) fell 47½p to £29.00, knocked by a note from Piper Jaffray that described competition from Juul and IQOS, Philip Morris’s ecigarette brand, as “daunting” for Velo, BAT’s own nicotine-free tobacco product.

Meggitt (MGGT) edged up 13½p to 541¾p after analysts at Goldman Sachs upgraded it from “neutral” to “buy” and increased their price target from 592p to 662p, citing President Trump’s 13% increase in defence spending in the past two years.

Hurricane Energy (HUR) shot up 9¼p to 53½p after the British oil explorer reassured investors that the recent letdown of plugging the Warwick Deep well after it failed to flow at commercial rates would not impact its nearby Lancaster field.

Concepta (CPT) reported that the number of women who had conceived while using its fertility app My Lotus had reached double figures since November. The tool, which lets women test their hormone levels to find their most fertile days, has been available at Boots shops since March.

Tempus – Ocado Group (OCDO): Long term buy. In less than a year, fees from international deals start rolling in and the shares should keep going

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Mentioned in this post

BATS
British American Tobacco
BDEV
Barratt Developments
BKG
Berkeley Group Holdings (The)
CPT
Concepta
DFS
DFS Furniture
DTG
Dart Group
HUR
Hurricane Energy
INDV
Indivior
LAND
Land Securities Group
MGGT
Meggitt
OCDO
Ocado Group
PSN
Persimmon
RB.
Reckitt Benckiser Group
TCG
Thomas Cook Group
TEF
Telford Homes
TW.
Taylor Wimpey