Below are the key morning headlines from today’s papers, featuring the Financial Times, The Times, The Telegraph, The Daily Mail & more - see the full Press section here.
HSBC sets aside $70m after trade war threats. Bank’s results beat forecasts as profits rise 16%. HSBC Holdings (HSBA) made its first concrete acknowledgement yesterday that the trade war between the United States and China could hit its vast trade finance operations when it set aside a small but symbolic $71 million. The “precautionary” provision was included in a strong set of third-quarter results that helped to push the bank’s share price up 28¾p to 633¾p. Analysts were cheered by faster profits growth from retail banking and wealth management than they had expected and progress on cost control. John Flint, who was promoted to chief executive in February, declared that the 16% increase in underlying profits to $6.2 billion in the three months to September was “encouraging” and played down any immediate problem from the tit-for-tat tariff increases and rhetoric coming from the US and China.
Hammond unveils digital services tax to raise £400 million a year. Online tech giants including Google and Facebook are to be hit with a digital services tax worth up to £400m per year, as Chancellor Philip Hammond used the Budget to take the lead in a global push to tax Silicon Valley while limiting the pain felt on Britain’s struggling high streets. But the proposal for what he termed a “narrowly targeted” tax, to be paid only by large companies that are profitable and generate over £500m a year in global revenues, was sharply criticised by some as potentially damaging for the UK’s technology industry at a sensitive time as negotiations continue over Brexit.
Hammond delivers budget of tax cuts and spending to shore up May. Chancellor declares austerity is coming to an end with budget making little reference to risks of a no-deal Brexit. As negotiations with the EU27 enter their frantic final weeks, the chancellor cast off his cautious reputation and opted to spend almost all of a £68bn windfall handed to him over the next five years by the independent Office for Budget Responsibility (OBR). “Austerity is coming to an end, but discipline will remain. That is the clear dividing line in British politics today,” he told MPs, repeatedly stressing that Britain was at “a turning point in our nation’s recovery”.
Restaurant Group poised to gobble up Wagamama. The company behind the Frankie & Benny’s and Chiquito restaurant brands is in advanced talks over an audacious £600 million swoop on the Wagamama chain. The Times has learnt that Restaurant Group (RTN) is the preferred bidder after a sale process launched in June by Goldman Sachs on behalf of Duke Street and Hutton Collins, the Asian noodle bar chain’s private equity backers. An acquisition of Wagamama, chaired by Allan Leighton, would complete a remarkable turnaround for The Restaurant Group after a spate of profit warnings in early 2016 led to a change of management and the closure of a clutch of loss-making outlets.
Japanese giant Takeda looks to clear European hurdle. The Japanese pharmaceuticals company seeking to complete the £46 billion takeover of Shire Plc (SHP) has offered concessions to European regulators in an attempt to secure approval. Takeda is in talks with the European Commission over the potential future overlap between its Entyvio treatment for inflammatory bowel disease and a compound in Shire’s late-stage drugs pipeline. Entyvio has been granted marketing authorisation in more than 60 countries and is the “cornerstone” of Takeda’s gastrointestinal portfolio. As part of the discussions with European officials, Takeda has proposed offloading Shire’s compound, called SHP647, which is in phase III clinical trials, along with unspecified “associated rights” as a possible remedy to securing clearance for the deal.
Gordon Dadds Group (GOR) deal creates biggest listed law firm in the UK. The listed legal services company yesterday took over Ince & Co, a City shipping law firm. The deal, which by the end of the year will result in the name Ince Gordon Dadds, creates the largest publicly listed law firm in Britain and propels it into the country’s top 40 with forecast annual revenues of £110 million. Based in Aldgate near the City of London, the expanded legal services business will have 100 partners and offices in nine countries. The £34 million acquisition was approved by Ince & Co partners relatively quickly, with reports that the two firms were in advanced talks emerging only at the end of last month
Cityjet deal puts regulator on alert. Competition authorities are considering an investigation into the monopoly that the owner of British Airways has engineered on the route between Dublin and London City airport. Aer Lingus, BA’s sister carrier in the International Consolidated Airlines Group SA (CDI) (IAG) stable, took over the operation of Cityjet services to Dublin on Sunday, running services on the route in its own colours. The Competition and Markets Authority said yesterday that it was launching a two-week inquiry into the arrangement, which was agreed in August, to consider whether it might have “resulted in the creation of a merger situation” and if so whether this would affect competition.
Former Daily Mail journalist fined €40,000 over ‘inside information’. A former Daily Mail journalist has been fined €40,000 by the French stock exchange regulator for allegedly communicating inside information on market rumours to his contacts. Geoff Foster, who wrote the market report column for the Daily Mail, was said to have transmitted information that enabled investors to make tens of thousands of euros by trading in shares. France’s Financial Markets Authority ruled that he had told his contacts what was going to appear in his column, giving them a head start on other investors. Mr Foster, who is retired, denied the charges, saying it was ridiculous to suggest that he would tip off contacts about forthcoming articles.
The world’s biggest businesses pumped an extra £3.5bn into research and development in the UK this year, as global spending growth hit a decade-high. Pharmaceuticals giants GlaxoSmithKline (GSK) and AstraZeneca (AZN) were the biggest investors, with R&D spending of £6bn and £5.4bn, according to the report from PwC, followed by Fiat Chrysler’s £3.9bn and Rolls-Royce Holdings (RR.) £1.1bn. This represents an increase of 10.7% on last year, when R&D investment fell by 8.9%, and puts the UK close to the global R&D growth rate this year of 11.4% – the fastest pace of growth since 2008 – and comes despite worries that Brexit could undermine investment in the country.
Analysts have torn up their forecasts for Just Eat (JE.) and urged investors to sell their shares in the food delivery company, amid rumours of a tie-up between Deliveroo and Uber. Peel Hunt, which has been a “strong believer” in Just Eat since 2013, said it had now had a “change of heart” about the company, citing a potential “Uberoo-esque wave” that would eventually lead to the company’s demise. The broker downgraded its recommendation on the stock to Sell from Buy. It slashed its forecasts for 2018 revenue from £756m to £717m, and for earnings before interest, tax, depreciation and amortisation to £178m from £184m. It also cut expectations for 2019 and 2020.
Cosmetics firm Warpaint London (W7L) has fallen victim to the slowdown on UK high streets as it issued a profit warning for the year ending Dec 31, citing “challenging” market conditions and “retailers reducing stock levels and Christmas orders”. The Aim-listed company said as the financial year was “heavily dependent on second half trading” it now expects profits between £8.5m to £10m, compared to its previous £12m forecast. Revenue is expected to fall in the range of £48m to £52m.
Burberry Group (BRBY) is launching fashion lines through social media in a bid to woo young shoppers and shake off its traditional image. The fashion house, which is known for its quintessentially British designs, is focusing on selling products through online platforms such as Instagram to attract millennials. Riccardo Tisci, Burberry’s chief creative officer who joined from French rival Givenchy in March, launched a clothing range through Instagram earlier this month. It was available to buy for just 24 hours in a flash sale
