The Times 16/03/19 - Vox Markets | Vox Markets

The Times 16/03/19

Interserve saved after deal rejected. Lenders mop up failed government contractor. Interserve (IRV), a key government contractor with 45,000 British workers, collapsed into administration yesterday after a US hedge fund blocked a rescue, before being immediately bought out by lenders. The outsourcer’s failure, under the weight of £631 million of debts, will wipe out already-bloodied shareholders, including 16,500 retail investors, and has triggered uncertainty for its UK workforce. However, Interserve and its advisers raced through a quick sale to its lenders via the High Court, which allowed its operating subsidiaries to continue trading with customers and suppliers.

Patisserie Holdings (CAKE) accounting black hole is £94m, administrator reveals. The parent company of the Patisserie Valerie café chain overstated its accounts by at least £94 million, more than double previous estimates, according to newly published documents. The scale of the alleged fraud at the collapsed company has been revealed in a report by KPMG, the administrator to Patisserie Holdings. Its report says that Patisserie overstated the amount of cash it had by £54 million, overstated its assets by £23 million and had £10 million in undeclared debts. Accounts produced for Patisserie’s management last August showed net assets of £108 million when in fact the company had assets of only £14 million and implied trading losses of £21 million, according to KPMG.

HSBC Holdings (HSBA) chiefs bow to pressure and cut pension payments. Top HSBC executives have agreed to have their payments in lieu of pension slashed by two thirds, cutting their pay packets by hundreds of thousands of pounds, to defuse a row with shareholders. John Flint, 50, chief executive of the bank, will take a £248,000 cut in the £372,000 payment that he receives in lieu of pension to £124,000 to bring him in line proportionately with pension contributions made to ordinary staff. Two other main board executive directors will have their payments cut by the same amount. HSBC announced the changes yesterday to placate shareholders, who were furious that the bank had flouted the spirit of new boardroom pay guidelines intended to bring executive pension payments more in line with those of all staff, as first reported in The Times last Saturday.

Sainsbury’s criticises Asda merger report. Sainsbury (J) (SBRY) has hit back at the competition regulator’s adverse provisional findings on its proposed merger with Asda, accusing it of making basic mathematical errors and of issuing flawed and inconsistent results. In its response to the Competition and Markets Authority’s report, seen by The Times, Britain’s second largest grocer says that the regulator made a series of mistakes. It claims that the CMA has “double-counted” Asda convenience stores and incorrectly counted Asda Living stores, which typically are 33,000 sq ft and do not sell grocery items, as convenience stores.

Wagamama expansion may be off the menu in America. Restaurant Group (RTN) has launched a strategic review of its Wagamama business in America, raising the possibility that it could join a long list of British restaurant brands to scrap expansion plans across the Atlantic. The United States has not proved easy for UK chains, as the likes of Belgo, Pizza Express and Yo! Sushi can testify. The Frankie & Benny’s operator, which is due to open its sixth company-owned US Wagamama in Manhattan, New York, said that it was reviewing its options for the business and would update investors this year.

Analysts took a bite out of Greencore Group (GNC) yesterday, warning that the salad and sandwich maker’s customers were thinking twice before grabbing their food on the go. While downgrading Greencore from “buy” to “hold,” Berenberg, said that political and economic uncertainty were weighing heavily on consumer confidence, bad news for a food manufacturing sector already contending with rising labour and ingredients costs on one hand and pressure on prices on the other.

 

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Mentioned in this post

CAKE
Patisserie Holdings
GNC
Greencore Group
HSBA
HSBC Holdings
IRV
Interserve
RTN
Restaurant Group
SBRY
Sainsbury (J)