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.
Mulberry Group (MUL) is set to take a major hit this week as the crisis at House of Fraser claims another victim. The luxury fashion firm, which has concessions in 17 of House of Fraser’s 59 department stores, is said to be hamstrung by uncertainty surrounding the chain’s future. Its half-year results on Wednesday are expected to disappoint, largely due to House of Fraser’s £90m takeover by Sports Direct in a controversial pre-pack administration deal in August
Outlook is worst since the crash, say bosses. The chancellor has suffered his first big setback since the budget as it emerged that confidence among businesses had slumped to its lowest level since the financial crisis. Just a week after Philip Hammond announced a budget that appeared to signal the end to austerity and attempted to provide a boost to commerce, a survey has shown that corporate sentiment fell to below its lows in the wake of the Brexit referendum. Confidence is also lower than after last year’s general election, which failed to yield a majority for Theresa May and forced the government into a potentially compromising political alliance with the Democratic Unionist Party.
Barclays (BARC) is under growing pressure after it emerged that incoming chairman Nigel Higgins has invested in tax avoidance schemes. The former Rothschild banker, 58, who will join Barclays next year, was a member of two schemes – Eclipse Film Partners and Film Development Partnership – that were shut down by HMRC over investments in movie projects for tax relief
German rail giant seeks help to prop up UK arm that owns Northern franchise. Germany’s nationalised train operator is locked in crisis talks with the Government as unprecedented levels of disruption cripple the finances of one of Britain’s biggest rail franchises, the Telegraph can reveal. Northern, whose parent company Arriva is owned by state-backed transport titan Deutsche Bahn, has suffered at the hands of waves of strike action and a bungled timetable overhaul. Under the terms of the franchise, Northern’s subsidy for operating the line is supposed to come down every year but with passenger numbers dwindling, the Germans are trying to renegotiate the terms, it is understood.
Investor doubts growing over Wagamama takeover deal. Restaurant Group (RTN) blockbuster takeover of Wagamama’s is under threat as concerns mount over the logic of the deal. Shares in the London-listed owner of Frankie & Benny’s and Garfunkel’s plunged last week after the £560m purchase of the popular noodle chain was unveiled. Investors are being tapped for £315m of funding and the chain will take on more than £400m of debt, half of which is currently sitting on Wagamama’s balance sheet. One of Restaurant Group’s largest institutional shareholders told the Telegraph: “We would be more interested if they first turned around their legacy business properly.”
Taxman chases GE over £770m bill. HM Revenue & Customs is pursuing General Electric for almost £800 million in tax deductions going back 14 years. The tax authority has told GE that it intended to retrospectively disallow interest deductions claimed by GE Capital, its financial services division, between 2004 and 2015. Britain has been cracking down on the tax practices of large businesses, and HMRC said that it investigated “around half of the UK’s largest businesses” at any one time. Last year it secured more than £9 billion in “additional” tax revenue from large and complex companies.
Asos bosses forgo bonuses after profits surge fails to meet sky-high expectations. ASOS (ASC) bosses have been stripped of their bonuses for the first time in four years after the fashion site failed to hit tough targets. Nick Beighton, the chief executive, has lost out on a bonus worth hundreds of thousands after a surge in profits failed to hit sky-high expectations. Although annual pre-tax profits climbed 28% to £102m, the business said its “very stretching” target of exceeding that figure had not been met. “As a result, no bonus award has been made to the CEO, CFO or any other employee for the period to 31 August 2018,” the company said. Mr Beighton, who took over from founder Nick Robertson in 2015, has also had his base salary frozen at £565,000.
M&S takes falling sales in its stride. Marks & Spencer Group (MKS) is expected to report another fall in food and clothing sales this week but will tell the City its restructuring plan is still on track. The high street chain is forecast to register a 2% fall in like-for-like sales in its food division, with clothing and homeware sales down 1.2%. Its pre-tax profit is also expected to fall about 7% to £203 million, which is roughly midway between its forecast range of between £188 million and £212 million. Under Archie Norman, chairman, and Steve Rowe, the chief executive, M&S is attempting yet another corporate transformation programme with the aim of reviving sales and profit across all areas including online, where it has struggled for some time. As part of this programme the top management team at M&S has been almost completely overhauled and there are plans to close at least 100 stores by 2022.
Online gambling companies based in Gibraltar have snubbed efforts to lure them to Spain after Brexit, with Malta proving more attractive. Those with licences to operate in Spain need to be inside the EU after Britain leaves. After the Brexit vote Madrid halved taxes for online gambling to 10% in Ceuta and Melilla, Spanish enclaves in north Africa, in an attempt attract betting companies. However, Malta offers a low tax for gaming companies of 5%. The island, which has been plagued by money laundering allegations, also offers a business infrastructure to develop necessary software. Bet365 is expanding in Malta but played down reports that it would relocate from Gibraltar after Brexit. The UK-based giant 888 Holdings (888) said that it had a back-up plan to establish operations in Malta and William Hill (WMH) acquired the Stockholm-listed Mr Green & Co to give it an EU base. However, all these gambling companies will keep their UK-faced services on the Rock.
