Travis Perkins (TPK) is accelerating plans to sell its Wickes division after replacing the chief executive of the struggling DIY chain. Travis Perkins is said to be separating Wickes’s IT systems from those used by the rest of the group to prepare the 240-store DIY chain for a demerger in the middle of next year. The project, led by Travis Perkins finance chief Alan Williams, could also flush out a buyer for Wickes. Travis Perkins has drafted in David Wood, a former Tesco executive with no DIY experience, to replace Simon King in the wake of operating profits falling by almost a third to £69m over the past two years. Travis Perkins, which also owns the trade-oriented Toolstation chain, is slashing costs and selling businesses amid declining levels of home ownership and a growing tendency for consumers to shun DIY projects. The group said in December that it was reviewing options to “maximise the value” of Wickes in the medium term, and it has been separating its plumbing and heating unit before a potential sale, which could raise up to £500m.
Mike Ashley’s is set to reveal the scars from a tumultuous year of dealmaking and aggressive activism when the retailer reports annual results this week. Analysts estimate that underlying earnings will be down by 7.5% to £283.1m, despite sales rising by an estimated 9% to £3.7bn. The principal drain is House of Fraser, the loss-making department store chain that Ashley bought out of administration for £90m last August. The tracksuit tycoon has spent much of the past year at war with the board of Debenhams, culminating in Ashley’s 29.7% stake being wiped out when the group collapsed into the hands of lenders led by hedge fund Silver Point in April.
Woodford’s fall from grace has sent shockwaves through the fund manager industry, and last week, the Bank of England warned of a clampdown on open-ended funds. Investors were already hesitant about parting with their cash amid Brexit uncertainty. The rise of cheap trackers that simply follow an index has also pummelled fund managers. Premier Asset Management Group (PAM) is not immune. The fund management group, which listed on AIM in October 2016 at 132p a share, giving it a valuation of £140m, reported a drop in assets under management in its quarterly results last week, blaming record-low inflows. Mike O’Shea, Premier’s chief executive, said last week that conditions would remain “challenging”. The company suffered net outflows of £55m in the three months to the end of last month, compared with £202m inflows a year earlier. Assets dipped from £6.8bn to £6.7bn. Analysts at Numis Securities noted that Premier’s investment performance “has been deteriorating recently”. Fees are under intense scrutiny. “Fund management is a rare commodity in which the more you pay, the less you get,” says Alan Miller, the co-founder of wealth manager SCM Direct. Analysts say inflows should recover, especially when there is more clarity on Brexit. However, with active managers out of favour and regulators preparing a crackdown, it is hard to see light at the end of the tunnel. Sell.
Bosses at Stagecoach Group (SGC) took maximum bonuses last year despite presiding over the transport giant’s ignominious exit from the railways and a slumping share price. Martin Griffiths, chief executive, received a bonus of £848,000, lifting his total package of pay and perks to £1.8m. Finance director Ross Paterson was handed a £565,000 bonus, giving him a total £1.2m package. Stagecoach has endured a torrid year. In May 2018 it handed back the keys to the East Coast main line between London and Edinburgh, with losses of £259m. This April, the company was disqualified from three new rail franchise competitions, meaning it will be kicked off the railways when contracts on the West Coast and East Midlands routes end imminently.
SSE (SSE) investors have been warned that its chairman may not be devoting enough time to the energy giant because he holds too many jobs — known as “overboarding”. Richard Gillingwater, 63, also chairs the £274bn asset manager Janus Henderson and is a director at the FTSE 100 caterer Whitbread. Ahead of SSE’s annual meeting on Thursday, adviser ISS said Gillingwater’s other commitments were “significant”. ISS also raised concerns about board member Helen Mahy, but said neither had breached guidelines and both should be re-elected.
Former employees of AstraZeneca (AZN) are embroiled in a bitter dispute with the company following the collapse of a drugs manufacturing plant little more than two years after it was sold. They have accused the FTSE 100 pharmaceuticals group of betrayal through failing to ensure payment of £12 million of enhanced redundancy pay, a lack of due diligence on the deal and circulating misleading information to staff ahead of it. The 100-acre Avlon site near Bristol was sold by Astrazeneca for a nominal £1 in December 2016 to Avara, a start-up contract manufacturer owned by Leonard Levie, who also owns American Industrial Acquisition Corporation, a larger New York-based portfolio of manufacturing and distribution sites. Employees have said that Astra wrongly told them during the consultation process on the deal that Avara was a subsidiary of AIAC. The site produced Crestor, Astra’s blockbuster high-cholesterol statin, and Seroquel, its anti-psychotic drug.
Retailers are missing last year’s heatwave as the number of customer visits to shops dropped again last month. Shopper numbers across British high streets, retail parks and shopping centres fell by 2.9% last month, according to figures by Springboard, a retail research business. The figure is a slight improvement on May’s 3% fall, which was the steepest monthly decline for six years, but drags the three-month rolling average to 2.4%, compared with 1.7% in 2018. The high street was the worst retail performer in June, slipping by 4.5% compared with a rise of 0.1% the previous year, when the men’s World Cup and hot weather boosted the national mood and encouraged spending. Even Primark, a retail industry darling, bemoaned the lack of a “feelgood factor” this month.
GlaxoSmithKline (GSK) is poised to appoint a former Astrazeneca executive and senior boardroom figure at HSBC as its new chairman as it prepares itself for a break-up, according to a report. The giant pharmaceuticals group is in advanced talks to recruit Jonathan Symonds, 60, as its replacement for Sir Philip Hampton, 65, who plans to quit as chairman later this year, Sky News said yesterday. The appointment is expected to be confirmed over the next few weeks. Securing Mr Symonds would be complicated by his role as deputy chairman at HSBC. The importance of his position at a systemically important financial institution and his time commitments to the bank mean that the appointment would have to be agreed by the Prudential Regulation Authority, the banking watchdog.
Asking prices for residential property have fallen for the first time in a year, according to a survey that flies in the face of recent hints of a nascent market recovery. Days after a snapshot of chartered surveyors found that newly agreed sales were on the up in June, Rightmove has announced that property prices have dipped by 0.2%, with falls led by sliding valuations of larger homes with at least four bedrooms. The online property group said in its latest monthly survey that fewer properties were coming to market and those that were being listed were taking the longest time to find a buyer for this time of the year since 2013. Despite this apparent lack of supply, estate agents are sitting on their highest amount of average stock since July 2015, Rightmove said.
Pressure is about to return to Persimmon (PSN), with a television investigation set to reveal more concerns about the quality of its properties and customer service. Britain’s New Build Scandal, to be aired tonight on Channel 4 as part of its Dispatches series, will feature an inspection of a new Persimmon home that found 295 faults, 70% of which were so serious that they violated building regulations, including a fire door that did not close, leaking sinks, unsealed showers and faulty waste connections. Britain’s most profitable housebuilder is responsible for one in seven homes sold via the government-backed Help to Buy mortgage scheme and in February became the first to report an annual profit of more than £1 billion. Based in York and a member of the FTSE 100 index of leading shares, it was embroiled in a pay scandal last year when Jeff Fairburn, 53, chief executive at that time, was awarded £81.6 million under a long-term incentive scheme put together in 2012 and linked to dividends and the share price.
