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.
Scandal-hit Facebook stutters. Social media giant misses Wall Street targets for user growth. A series of scandals and setbacks at Facebook appeared to dampen demand for its social apps in the third quarter and caused it to miss Wall Street’s targets for user growth last night. The technology company and publisher said that its user base had fallen for the second consecutive quarter in Europe and had stagnated in the United States and Canada, as it reported a profit that was ahead of analysts’ expectations but revenue that was slightly behind. Facebook owns the social network of the same name, the Whatsapp and Messenger messaging services and Instagram, the picture and videosharing network. It makes nearly all its money from digital advertising. It is one of the world’s largest internet companies, valued at about $422.2 billion.
Dozens of Evans Cycles stores to be closed as Mike Ashley buys it out of administration. Stores belonging to Evans Cycles will be shut after the stricken bike retailer became the latest high street name to be snapped up by the retail tycoon Mike Ashley. Mr Ashley, whose Sports Direct International (SPD) empire has agreed to buy the chain out of a pre-pack administration, said he was “pleased to have rescued” the brand but that “in order to save the business we only believe we will be able to keep 50% of stores open in the future.” Evans, which was bought by private equity firm ECI for £75m in 2015 and has around 60 shops employing 1,300 staff, has struggled amid rising costs and a fall in consumer spending that have felled a number of major retailers this year.
Restaurant Group investors suffer indigestion over £560m Wagamama deal. Around £80m was wiped off the stock market value of Frankie & Benny’s owner Restaurant Group (RTN) after investors reacted negatively to a planned £559m takeover of Wagamama. Shares sank 13% as the company announced plans to tap investors for £315m and take out £220m of new loans to fund the deal. In addition, £202m of Wagamama debt will be transferred onto Restaurant Group’s balance sheet. Wagamama’s private equity owners Duke Street and Hutton Collins will share £207m of cash and see £150m of shareholder loans repaid. Restaurant Group chief executive Andy McCue hailed the proposed acquisition, which will be put to a shareholder vote in mid-November, as “transformative”.
Disruption at factory wipes £70m off Reckitt’s sales. An ill-timed disruption at a baby formula factory lies behind a disappointing sales performance in the third quarter, Reckitt Benckiser Group (RB.) said yesterday. The consumer goods group blamed “technical engineering issues” at its main European site in the Netherlands, which largely supplies markets in the Far East, for numbers that fell short of expections. Reckitt announced quarterly sales of £3.1 billion, up 2% on a like-for-like basis compared with a year ago but behind City forecasts of a 4% rise. The manufacturing disruption wiped £70 million off sales, it said.
IG Group shakes up male-dominated online trading sector with first female boss. Britain’s spreadbetting industry is no longer being run by all men after IG Group Holdings (IGG) picked a female executive to replace its former boss Peter Hetherington. The company said that June Felix, who was most recently president of US payments giant Verifone in Europe and Russia, would become chief executive with immediate effect. She has previously held senior roles at Citibank and IBM Corporation. Her appointment marks the first time IG Group has had a female boss in its 44-year history. Its closest rivals Plus500 and CMC Markets have also only ever had male chief executives, although Penelope Judd was made non-executive chairman of Plus500 last year.
Patisserie Valerie boss ‘has conflict of interest’. Luke Johnson is facing mounting pressure to step down from the Patisserie Holdings (CAKE) audit committee ahead of a shareholder meeting to approve a £15.7 million rescue share issue. Shareholders are expected to approve the fundraising, which the company has made clear is necessary for its survival after the discovery of £40 million black hole due to “significant, potentially fraudulent accounting irregularities”. Mr Johnson, executive chairman and a 37% shareholder in the company, has been warned by Glass Lewis, a proxy adviser, that if he remains on the committee it will continue to recommend that shareholders vote against his re-election as group chairman.
Kier Group (KIE) gratefully accepts the chancellor’s budget ‘gifts’. Shares in the construction, services and property group rose by almost 5% after analysts at Liberum sifted through the finer details of Philip Hammond’s best efforts and found that several of Kier’s business divisions were in for a boost. The company is the largest provider of road maintenance to Highways England, the government body responsible for operating motorways, for example, so business may well be coming down the road on the back of the chancellor’s 50% increase in highways spending to £25.3 billion in 2020 to 2025. Budget nods to a more than 20% rise in rail spending over the five years to 2025, with an emphasis on renewal work, is another positive for Kier, which provides trackside power and signalling services. As the largest supplier to Virgin Media for telecoms maintenance, Kier is also in a good position to capitalise on a £200 million commitment to test the deployment of full-fibre internet in rural areas. Finally, the confirmed extension to 2023 of the Help to Buy scheme for first-time buyers was a win for Kier’s development business. Housebuilders were among the biggest gainers thanks to the Help to Buy extension. Taylor Wimpey (TW.) rose 5½p to 160¾p, Berkeley Group Holdings (The) (BKG) gained 105p to £34.86 and Barratt Developments (BDEV) climbed 12p to 511p
Pressure grew on Persimmon (PSN) boss Jeff Fairburn last night as MPs blasted the housebuilder’s ‘shoddy’ treatment of customers. Kate Green told fellow MPs that her constituents had been ‘brushed aside’ by the company after complaining that their new build homes had been left incomplete with serious defects. The Labour MP also raised concerns about chief executive Fairburn’s £75million bonus, declaring: ‘He certainly does the reputation of his company no favours, taking these vast pay-offs when clearly the company is failing to serve the needs of its customers.’
Carpeting company Victoria (VCP) , a rug supplier to the Queen, has plummeted for the second day in a row. The 123-year-old firm, which is listed on London’s junior market AIM, fell another 14.3% yesterday, closing down another 65p at 390p, taking loss so far this week to more than 35%. The rout, which has wiped £268.4million off the value of the company, came after a bleak warning on Monday that it was not making as much profit on each sale as expected. It was a sharp turn of fortunes for Victoria, which has delivered some of the best returns for investors of any listed UK company this decade.
Oil and gas exploration company Ascent Resources (AST) plunged as it threatened to take the Slovenian government to court in the EU. Ascent has been seeking an environmental permit to launch its Petisovci project for five years, and said it had received repeated private assurances from senior officials at Slovenia’s environment agency saying the permits would be confirmed. But more recently, it had failed to get ‘any meaningful comment’ from the agency or Slovenia’s new environment minister Jure Leben. Chief executive Colin Hutchinson said the company was exploring options to challenge both Leben and Slovenia in the EU courts. Shareholders seemed unconvinced that this would produce any positive results and shares fell by 0.25p, to 0.5p.
