Ocado upbeat despite devastating fire. Sales at Ocado Group (OCDO) have taken a hit from the giant fire at its Andover facility and could suffer further in the second quarter but the online grocer said that its draft findings following the blaze showed that there was no long-term problem with its warehouses or model. In an update that cheered the City, the company said that revenue had jumped by 11.2% to £404 million in the 13 weeks to March 3, which it said was a “resilient” response given the scale of damage to the warehouse in Hampshire. The fire completely destroyed the facility, which accounted for 10% of the online grocer’s total capacity. Ocado said that this had caused it to lose 1.2% of sales in the quarter. As the fire only occurred in the final four weeks of the first quarter, however, the impact on sales in the second quarter is expected to be greater and could rise to 3% of sales.
Antofagasta (ANTO) topped the FTSE 100 after the copper mining giant announced a higher than expected dividend. The miner said that it would pay a final dividend of 37 cents a share, ahead of market expectations and taking its total dividend for 2018 to 43¾ cents. “We take this as a statement of confidence from management over the tightness of the copper market and the strong cash flow generation that its portfolio can generate in such conditions,” analysts at Peel Hunt said.
Evraz (EVR) was the biggest faller in the FTSE 100 after the Russian steelmaker said that 25.4 million shares had been sold at 595p per share, a discount to Monday’s closing price of 630p.
Supermarket chain Sainsbury (J) (SBRY) added 4½p to 239½p after it and Asda promised regulators £1 billion of lower prices annually as they attempted to salvage their proposed merger.
Ferrexpo (FXPO), the iron ore miner, tumbled by 24½p to 245¾p after it said that it was delaying the publication of its full-year results following a review of its donations to a charity set up by the company found additional discrepancies.
Lloyds comes under fire over Horta-Osório’s pension perks. Staff protest as anger at exclusive final salary scheme grows. António Horta-Osório has been criticised by staff at Lloyds Banking Group (LLOY) for being the only employee at the company who is entitled to a pension based on his final salary. Lloyds is facing a possible showdown with shareholders over plans to pay its chief executive and incoming finance chief pension contributions that potentially break the spirit of new guidelines intended to align the interests of company bosses with their staff. The group has been attacked by its own staff over the arrangements for Mr Horta-Osório, 55, and William Chalmers, 50, its next chief financial officer, amid discontent in Britain about the pensions of senior executives.
JD Sports will take over Footasylum for £90 million, a little more than half of what its struggling smaller rival was valued at when it floated 16 months ago. JD Sports Fashion (JD.) said that it had offered 82.5p a share for Footasylum (FOOT), which reflects a 77.4% premium to Friday’s closing price but is below its flotation price of 164p a share in November 2017. Footasylum’s founding family have recommended the deal and are set to earn £54 million from the sale of their shares when the takeover completes. Since it floated in a listing that valued it at £171 million, Footasylum has had to scale back its once lofty expansion ambitions after a string of profit warnings. Last year the company defended its business model but said that it had faced competitive trading and some unexpected setbacks such as delays in store openings.
Hunger strike protest at Clydesdale Bank. A businessman has begun a hunger strike opposite the headquarters of Clydesdale Bank to protest about the way he claims it has treated him. John Guidi, 63, said yesterday that he was drained after spending Sunday night in a pop-up tent in Glasgow city centre. He said: “It was just terrible, I was really, really cold.” Clydesdale Bank was founded in 1838 and is now part of CYBG (CYBG), the London-listed group that also owns Yorkshire Bank and Virgin Money. CYBG offers financial services including bank accounts and loans. It is the sixth biggest retail banking group in Britain. Mr Guidi blames the bank for removing funding from his property business and selling his loans to Cerberus, an American investment group. He faces eviction next month from his home in Bothwell, south Lanarkshire, where he has lived for 30 years.
‘Torpedo’ Sorrell sets his sights on two more targets. Sir Martin Sorrell is lining up two new takeover deals for the advertising business he set up after leaving WPP. He said his S4 Capital (SFOR) venture was in talks to acquire a creative agency in Europe and a digital buying firm in Latin America. He described the forthcoming transactions as “in-fill deals”, suggesting they would be much smaller than the $150 million acquisition in December of the Californian ad technology firm Mightyhive. In its maiden annual results yesterday, S4 Capital said its underlying revenues and gross profit had increased by more than 30% in January after signing up a number of new clients. S4 Capital flagged up “significant” contract wins from the consumer goods giants Procter & Gamble and Nestlé and the food company Mondelez.
Worldpay takeover creates electronic payments giant. Worldpay, Inc Class A Com Stk (DI) (WPY) has been bought by Fidelity National Information Services for $35 billion in the largest ever deal in the electronic payments industry. The deal values Worldpay at far more than the £2 billion it was sold for by Royal Bank of Scotland in 2010 when the bank was forced to dispose of it under EU state aid rules. The deal creates the world’s biggest electronic payments business by market value, linking banks and credit card companies with billions of consumers who are increasingly shunning cash. Worldpay, formerly Streamline, was set up in 1989 as a subsidiary of National Westminster Bank. Natwest was bought by RBS in 2002 and the payments business was renamed RBS Worldpay. RBS then developed the business through acquisitions in Europe and America.
Bonus row Persimmon chief Jeff Fairburn was paid £85m. The former chief executive of Persimmon (PSN), whose bonus sparked outrage and ultimately led to his departure, received even more than was thought under the arrangement, it emerged yesterday. The FTSE 100 housebuilder paid Jeff Fairburn £81.6 million over two years under a long-term incentive scheme put together in 2012 and linked to dividends and the share price, according to Persimmon’s annual report, published yesterday. He was previously believed to have received £75 million. Mr Fairburn, 52, received an award of £43.5 million under the arrangement in 2017, followed last year by a further payment of £38.1 million. Taking into account his salary and other benefits, he was paid a total of £84.71 million.
Aston Martin Holdings (AML) shares took a dive yesterday after Jefferies analysts said that the maker of James Bond’s cars will need to take on new debt or fresh equity to deal with liquidity problems on its balance sheet and in the market. Jefferies said the market had priced in a more muted margin outlook, but management still needs to address “insufficient liquidity”. The six-month lock-up period before insiders can sell their shares approaches in early April and will also need to be considered, the analysts said as justification for a cut to their price target from £14 to £10.50.
British retailers including supermarket chains were lifted after John Bercow attempted to hurry along the government to reaching a Brexit agreement. The Speaker ruled out another vote on Theresa May’s already rejected Brexit agreement if the motion was “substantially the same”, pointing out that the Commons had to be aware of its limited timetable. The intervention appeared to lift domestic stocks, despite a weaker pound. Sainsbury (J) (SBRY) added 11p to 235p. Tesco (TSCO) rose 6p to 235½p.
Hunting (HTG) was lifted 21p to 568½p after UBS upgraded the oilfield services company to “buy” from “neutral”. Analysts said that the company’s international business, which accounts for 30% of revenues but has generated an operating loss over the past four years, is expected to start to turn positive this year. They also highlighted growth momentum within parts of the US business.
Volution Group (WI) (FAN), the manufacturer of low-carbon ventilation products for homes and commercial buildings, jumped 10½p to 174p on better-than-expected interim results. The group posted an 8% rise in profit before tax to £19 million on the back of a 16% rise in revenue to £115 million.
Boeing’s UK supplier takes a hit. Concerns about the future of Boeing’s 737 Max jets after the Ethiopian Airlines crash put pressure on the shares of one of its British suppliers. Shares in Senior (SNR), the FTSE 250 company which supplies oxygen and engine build-up tubes to Boeing, fell more than 5% yesterday. Investors fear a potential hit to suppliers after the Boeing jets were grounded by regulators around the world. The Civil Aviation Authority has banned the 737 Max 8 and Max 9 from British airspace.
Tempus – Domino’s Pizza Group (DOM): Avoid. Feud with UK franchisees and “growing pains” overseas will both take time to resolve
Tempus – Allergy Therapeutics (AGY): Hold. Portfolio of marketed products and wider pipeline limit impact from trial setback
