Below are the key headlines from today’s updated papers, featuring the Financial Times, The Times, The Telegraph, The Daily Mail & more - see the full Press section here.
Online estate agency Purplebricks Group (PURP) has seen its share price fall over 35% after cutting its revenue forecast for the year. For 2019, Purplebricks now expects its sales to reach between £130million to £140million, against initial forecasts of between £165million to £175million. The group blamed ‘headwinds’ in the Australian housing market and a ‘slower than expected’ response to its latest marketing campaign across the pond in the US. Amid turmoil across some of its international operations, the group also announced that the chief executives of both its UK and US arms will be leaving the company. Touching on its performance in the UK, the group said that while the housing market had continued to be ‘challenging for the estate agency industry’, the group still expects its sales in this country to rise by between 15 to 20% from the year before.
British Gas owner loses 742,000 customers and issues price cap warning. Centrica (CNA) says it will take £300m hit on cap on energy bills and lowers 2019 cashflow outlook. The owner of British Gas, Centrica, lost about three-quarters of a million customers last year and warned it will take a £300m hit from the government’s price cap on energy bills. Shares in Britain’s biggest energy company dropped more than 10% after the company lowered its cashflow outlook for 2019, leading investors to fear Centrica’s dividend could be cut. Iain Conn, the chief executive, said the group faced a “huge number of headwinds”, including the price cap, reduced gasfield production and several of its nuclear power plants being offline.
Barclays keeps activist at bay as it defies Wall Street gloom. Barclays (BARC) on Thursday defied a slump on Wall Street and continued to grab market share from the giant American banks that have traditionally dominated investment banking and trading. While profits for the year were flat at £3.5 billion, largely due to fines for misbehaviour, the bank said it is benefiting from being practically the last European bank standing in New York. Deutsche Bank, UBS and Credit Suisse have retreated from investment banking. Barclays chief executive Jes Staley said: “We believe in being a bulge-bracket investment bank. To be alongside the top American houses is very important to us. The results are supportive of the bank’s strategy.”
Serco Group (SRP) was upbeat about rewarding long-suffering shareholders on Thursday despite difficult conditions in the UK. The prisons-to-hospitals outsourcer’s chief executive Rupert Soames, who described the mood as “miserably cheerful, like Eeyore”, said dividends were on the cards again. Serco, which makes 40% of sales from the UK, said sales in 2020 would rise 5% due to new contracts, including a £1.9bn deal to house asylum-seekers in Britain. Free cash flow also turned positive for the first time in three years. Soames has never paid a dividend to investors but said prospects were increasing. “There’s an aviation term called being on short finals, which means you’re just coming into land approaching the runway. We are reaching the landing point where we will be able to pay dividends. “It’s been a miserable four years for shareholders but they can now see some light at the end of the tunnel. In 2014 we were early adopters of financial carnage. Finally the old tanker seems to be turning and we now have positive cash flow and increasing profits. It does feel a bit of a turning point.”
BAE Systems (BA.) shares fell on Thursday after it admitted a German freeze on Saudi arms exports in response to the murder of journalist Jamal Khashoggi could hammer its supplies to the kingdom. The FTSE 100 firm, which gets less than 15% of group sales from Saudi, said there were several planning and supply chain projects to cut disruption from the ban. Germany said in November it would halt arms export licences to Saudi following outrage over Khashoggi, who was slain in the Saudi Arabian embassy in Turkey in October. BAE has Saudi contracts for Eurofighter Typhoon and Tornado fighter jets using parts affected by the German ban, prompting fears shipments could be hit. Chief executive Charles Woodburn said: “This is not a cliff-edge scenario. The impact has been minimal to date but over time it could become more difficult.” He did not give details on how it was trying to cut disruption because the information is classified. BAE was less forthright about the problems than French plane maker Airbus’s chief executive Tom Enders, who has said Germany’s ban was “a kind of moral high ground attitude”
A slowdown in Germany has overshadowed an otherwise positive set of half-year results for Hays (HAS) . The UK’s biggest recruitment firm posted a 8% rise in net fees for the six months to Dec 31, with pre-tax profits up 7% to £112.6m. The dividend was up 5% to 1.11p a share. Alistair Cox, chief executive, said the results were “testament” to Hays’ strategy of global expansion over the past decade, with 80% of profits now coming from outside the UK. However, shares fell 4% as investors fretted over a slowdown in growth in Germany, its biggest market, which accounts for about a third of profits.
Go-Ahead Group (GOG) , the under-fire operator of the Govia Thameslink train network, sought to draw a line under its railway woes after making bumper returns from its giant Southeastern franchise. The FTSE 250 company beat market expectations on rail profits and also impressed with the amount of money it was making on London buses. Half-year revenue rose 5% to £1.9bn. Pre-tax profit fell sharply to £44.2m after losing the London Midland franchise in December 2017, however. While Go-Ahead impressed the City, its rail business remains precariously placed. Chief executive David Brown said Go-Ahead “would make no money” this year on Britain’s biggest train franchise, Govia Thameslink