AstraZeneca (AZN) has set aside up to £12 million for former employees amid mounting criticism about the sale and collapse of its Avlon pharmaceutical manufacturing site near Bristol. The company said the fund, to be administered independently, would ensure staff “receive full severance should the administration of the site not generate enough funds to cover redundancy costs”. The move comes after calls from MPs, including Frank Field, chairman of the Commons work and pensions select committee, for payment and the Unite union, for an inquiry into what it described as “bandit capitalism”.
Saga (SAGA) is set to come under pressure to break itself up after an American activist investor revealed it had built a 5.1% stake in the insurance and travel group aimed at the over-50s. The stake purchase by Elliott Capital Advisors comes five weeks after Lance Batchelor fell on his sword as chief executive in the wake of a profit warning in April that wiped a third off the value of the company, and which halved its dividend. Elliott, founded in 1977 by Paul Singer, when 32, has taken on companies ranging from AC Milan football club to Hyundai, Alliance Trust and even the Argentine government. Last year it put pressure on Whitbread to accelerate its break-up, which led to the sale of Costa Coffee to Coca-Cola for £3.9 billion.
The beleaguered chairman of De La Rue (DLAR) has refused to resign at the banknote printer’s annual shareholder meeting next week, in spite of growing pressure from an activist investor. Crystal Amber, one of De La Rue’s largest shareholders with a 6.5% stake, is locked in a dispute with the company over its performance, merger and acquisition opportunities and boardroom pay. De La Rue is a leading supplier of banknotes worldwide, employing about 2,700 staff. The activist investor said yesterday that it had advised De La Rue’s board that unless Philip Rogerson, the chairman, “stands down at or before the annual meeting, it is the fund’s intention to requisition an extraordinary general meeting to replace him”.
Investors took fright after Johnson Matthey (JMAT), the speciality chemicals company, warned of lower profits in its biggest division, which makes pollution filters for motor vehicles. The FTSE 100 group said higher costs would contribute to the lower outlook for the Clean Air unit and announced the retirement of John Walker, the head of the division. Johnson Matthey said it was still on track to meet its full-year guidance for the group, of mid-to-high single digit growth in operating profits, with stronger performances in other divisions offsetting the decline in Clean Air. However, it said that this would hinge on a stronger performance in the second half of the year.
Watches of Switzerland (WOSG), devoted to shoppers who take comfort in “rational indulgence” has 128 shops, including the UK brands Goldsmiths, Mappin & Webb and Watches of Switzerland and the American jewellery chain Mayors. The group’s Mappin & Webb business traces its roots back to a silver workshop in 1775 and has held royal warrants since Queen Victoria. The company, which listed in London in May, reported a 180% jump in pre-tax profits from £7.2 million to £20.1 million for the year to the end of April. Sales were boosted by a 28% rise in luxury watch sales to £631.4 million, which accounts for 82% of the business. It is the largest UK retailer of Rolex, Cartier, Tag Heuer and Breitling. Brian Duffy, 64, who has been chief executive for six years, said that despite other retailers complaining about a lack of consumer confidence he was seeing “unprecedented demand” for luxury watches as people invest in family heirloom timepieces. “We call it rational indulgence, as they are buying a product that maintains its value and there is a secondary market that means they can always sell it if times get tougher”, Mr Duffy said.
The under-fire chief executive of GVC Holdings (GVC) delivered a timely riposte to his critics by issuing a forecast-beating trading update on the back of strong online growth. Kenny Alexander, who has faced criticism on several fronts, said that the Ladbrokes and Sportingbet operator’s online division had made “material market share gains” while the hit on its betting shops from the stake cut on fixed-odd betting terminals (FOBTs) had not been quite as bad as feared. In a research note, Morgan Stanley said that the 39% fall in machine revenues was “a little better” than the 43% slump reported by its rivals, suggesting that it was outperforming.
BT Group (BT.A) has agreed the sale of its global headquarters in London to a private equity firm for almost £210 million as part of a broader costcutting drive. The FTSE 100 telecoms group said that the deal with a European real estate fund managed by Orion Capital Managers included an initial leaseback agreement of 30 months “during which time BT will move its headquarters to a new London location”. BT said that it “expects to announce details of its new headquarters shortly”.
Vegan chocolate ice-lollies and billionaire sundaes have helped Hotel Chocolat Group (HOTC) to record a jump in full-year sales. Hotel Chocolat posted a 14% rise in sales to £132 million for the year to July 1 and said that it expected profits to be in line with expectations, despite investing in 16 new shops, including its first two stores in the US. It is the company’s second foray into America after a failed attempt seven years ago. Angus Thirlwell, chief executive, said it had learnt from when opening in New York. It was working closely with other businesses, such as credit card companies and fashion brands, to broaden its US customer numbers.
the world’s biggest miner has promised to produce less thermal coal over the next year and process it to improve its quality and cut carbon emissions. BHP said that coal production at its Mount Arthur mine in New South Wales, Australia, would fall by as much as 18%, from 18 million tonnes this year to between 15 and 17 million tonnes next year, as it shifts its focus from the Chinese market to Japan and Taiwan.
Burberry Group (BRBY) hit a record high yesterday after the fashion group reported higher than expected quarterly revenue. The results were investors’ first opportunity to quantify the impact of the new chief designer Riccardo Tisci, who joined 18 months ago, replacing Christopher Bailey. One of Mr Tisci’s first changes was to update the brand’s logo for the first time in 20 years and revamp its monogram to feature the initials of its founder, Thomas Burberry, both of which have proved a hit with Chinese millennials.
TalkTalk Telecom Group (TALK) climbed 3p to 108¾p, after it reported adding 118,000 fibre customers in the past three months, as subscribers upgraded from copper lines to faster services. The company said it was on course to meet its full-year guidance, posting a 1.3% rise in revenue to £387 million in the three months to June, despite poor feedback about its customer service this year.
easyJet (EZJ) retreated 15p to £10.34½ before its results today. The airline was relegated from the FTSE 100 last month after six years as the shares slipped to a three-year low of 854¾p, but they were lifted by the news that its rival Ryanair had cut its 2020 growth forecast. Adam Vettese, an analyst at Etoro, said: “Ultimately, Easyjet will need to convince investors of its cost savings plans to demonstrate growth potential.”
Galliford Try (GFRD) has defied the downturn in housing sales and prices, reporting that its annual pretax profit would be in line with estimates. Its construction division accounts for half its revenue, with the rest coming from its Linden Homes private housebuilding side and a partnership and regeneration business that develops homes for housing associations and local authorities. It issued a profit warning in April under pressure from ill-fated projects such as the Aberdeen bypass and Queensferry Crossing, Edinburgh. It also rejected a £950 million takeover offer from Bovis Homes. Under Graham Prothero, 57, the new chief executive, it has restructured its construction business, reducing the exposure of Linden Homes to central London where house prices have been weaker. The plan, unveiled in May, promised to deliver £15 million of savings a year from 2021. It expects annual pretax profit to be in the range of £112.7 million to £115.4 million.
Tempus – NMC Health (NMC): Buy. Ambitious and achieving healthcare provider in an attractive sector whose shares should have further to run
Tempus – Oxford Instruments (OXIG): Hold. Signs of strong progress but it is fully priced