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.
High street shop values fall by 10%. Depressed valuations expose retail sector woes. At least £20 billion has been wiped off the value of shops on the high street in the space of five months. CBRE, Britain’s largest valuer, said that yields on “prime”, or good quality, high street shops had moved from 4% to 4.5% between June and November, which equates to a 10% fall in capital values. According to the Property Industry Alliance, there are more than £200 billion of high street properties and supermarkets across Britain, meaning that an average 10% drop in values could have a serious impact. CBRE’s latest monthly index, which aims to illustrate sentiment and general trends in valuations, shows further depressed valuations of prime and secondary shopping centres, indicating that the full extent of declining values across the sector could be even higher.
Fears of US menthol ban burn hole in Big Tobacco. Billions of pounds were wiped off the value of two British tobacco companies yesterday after reports that American regulators plan to ban menthol cigarettes. Shares in British American Tobacco (BATS) dropped by more than 10% to their lowest mark since 2014, erasing more than £8 billion from its market capitalisation. Imperial Brands (IMB) , its smaller rival, was down by just over 2%. The sell-off was triggered by media reports in the United States, citing unnamed officials, that the US Food and Drug Administration is looking to pursue a ban on menthol cigarettes as part of wider action tightening regulations surrounding e-cigarettes. Uncertainty was heightened by government offices being closed yesterday for the Veterans Day public holiday, meaning that the FDA did not move to clarify its intentions.
Stobart chairman hits back at ‘brazen rigging’ claims as court showdown starts. Stobart Group Ltd. (STOB) chairman Iain Ferguson rejected allegations of “brazen rigging of a shareholder vote” as he faced down the company’s former chief executive Andrew Tinkler at a packed High Court. The first day of a trial triggered by a bitter power struggle at the Southend Airport owner heard claims that Mr Ferguson manipulated a staff share scheme to defeat an attempt by Mr Tinkler to vote him off the board. The transport and energy conglomerate is suing its former chief executive Andrew Tinkler, who was fired in June after 10 years at the company. Leading Stobart’s legal team, Richard Leiper QC accused him of only having “his own interests at heart”.
Babcock hits back after ‘malicious’ attacks on its financial health. Babcock International Group (BAB) has finally hit back at a “false and malicious” report by the anonymous “Boatman Capital” that had called into question the engineering company’s prospects. In a regulatory statement FTSE 250-listed Babcock, whose major contracts include maintaining the Royal Navy’s fleet, said it “strongly refuted” the allegations made by Boatman last month. Boatman attacked Babcock’s management, claiming they had “systematically misled investors” by burying bad news, and said that its relationship with main customer the Ministry of Defence had broken down.
£46bn Shire and Takeda mega-deal targets completion by January. Shire Plc (SHP) and Takeda are one step closer to sealing one of the biggest pharmaceutical mergers in history after announcing a completion date for the deal. The Irish and Japanese drugs giants hope to finalise the merger by Jan 8, should shareholders vote in favour of the deal at meetings on Dec 5. If all goes to plan, London-listed shares in Shire will be suspended on Jan 4. The £46bn deal will rank among the top 10 pharma mergers ever and will create a global pharmaceutical powerhouse with close to £22bn in annual sales, roughly equivalent in size to Britain’s AstraZeneca.
Numis goes missing in Wagamama deal. Restaurant Group (RTN) faced questions over its proposed £559 million takeover of Wagamama yesterday as it announced a £315 million rights issue at a deep discount to the prevailing share price. Although the rights issue is fully underwritten by JP Morgan Securities, there were raised eyebrows that , which two weeks ago had been listed as co-underwriter, was no longer listed. The Restaurant Group did not explain why “one of the underwriters has gone missing”, as one analyst put it, confirming only that “both JP Morgan and Numis, our joint brokers, remain fully supportive of the transaction”. The group, which is buying the Asian noodle bar chain from Duke Street, the private equity firm, said that it would issue 290.4 million shares, equivalent to 144% of its existing share capital, or 59% of the enlarged company.
BTG (BTG) focuses on lung cancer with second acquisition in two months. British pharmaceutical company BTG’s next big investment is in lung cancer, after putting a $20m (£15.6m) ‘down payment’ on US medical device company Veran. It’s the second acquisition in two months for BTG and will be announced in its half-year results this morning. Veran is a US company that uses images to create a real-time road map of a patient’s lungs to helps doctors to navigate through their airways to see what’s going on and to collect samples of lung tissue
ITV warned it is too late to take on Netflix in subscription streaming. ITV’s plan to challenge Netflix with its own streaming service is “too late” and will struggle to attract subscribers, a leading media analyst has warned. Claire Enders, the founder of Enders Analysis, said that ITV (ITV) had little chance of success against the heavy spending of Netflix and Amazon. The broadcaster’s chief executive Carolyn McCall is due to announce details of ITV’s service in February. The broadcaster already charges a subscription for a version of its catch-up service without advertising and runs a US streaming joint venture with the BBC called Britbox, but now aims to create a new, reliable source of income amid signs of a downturn in the advertising market.
Virgin Money axes deal with ex-Barclays boss. The new owner of Virgin Money has axed a lucrative deal with former Barclays’ boss Anthony Jenkins. CYBG (CYBG) , which owns Clydesdale and Yorkshire Bank, said its £1.7bn takeover of Sir Richard Branson’s bank has led it to cut ties with 10x Future Technologies, which was founded by Mr Jenkins, and to instead build its own IT platform. The deal was originally agreed between Virgin Money and 10x shortly after Mr Jenkins, dubbed “Saint Antony” in the years he ran Barclays, set up the London-based fintech business two years ago. Sources told Sky News that the deal was worth tens of millions of pounds and ending the contract could lead to a sizeable payout for Mr Jenkins’ business.
Gambling software maker Playtech (PTEC) ‘stabilises’ troublesome Asia. Gambling software provider Playtech has reported it is on track to meet full-year earnings guidance and insisted Asian operations have “stabilised” after its recent malaise in the region. The FTSE 250 company, which provides casino and bingo games to gambling operators, said that trading since June 30 was in line to deliver adjusted earnings before interest, tax, depreciation and amortisation (ebitda) in the range of €320m to €360m (£281m to £316m). Playtech’s top line has been dented by surging competition from new Chinese operators and an online gambling crackdown in Malaysia.
Dignity profits fall as funeral provider battles price war. Dignity’s quarterly profits have stumbled after the funeral provider cut prices to tackle tough competition. The company, which offers cremations, prepaid funeral plans and services, said operating profits plummeted 37% to £12.2m in the quarter to Sept 28 as it fights a price war with rival Co-op Funeralcare. Dignity (DTY) admitted its “pricing trials” had dented the average income per funeral after announcing in January that it would reduce the price of its cheapest funeral option, ‘simple funerals’, by 25% to £1,995 in England and Wales and £1,695 in Scotland.
Wood Group lands UAE deals worth $53m. Wood Group (John) (WG.) is to create 100 jobs after winning $53 million of contracts with the Abu Dhabi National Oil Company. The FTSE 250 engineer, which is based in Aberdeen and employs nearly 60,000 people worldwide, said that it would be providing project management and consultancy services for Adnoc at several big projects on onshore oilfields in the United Arab Emirates. Wood works principally in the oil and gas industry but has been diversifying into automotives, renewables, chemicals, nuclear and mining. It bought Amec Foster Wheeler for £2.2 billion last year to further widen the sectors in which it works.
Gold miner Pan African Resources (PAF) looks all set to return to profitability in 2019. A company that was created from scratch to become a substantial employer with a market capitalisation of almost £200million in little more than a decade is always worthy of note. In the case of Pan African Resources that market capitalisation also allows for a significant period of underperformance from the company’s South African gold mines that’s only now coming to an end. Go back just a little more than two years and the company’s shares were almost three times higher than where they are today. And there’s every sign now that a return to those elevated levels is on the cards. That’s because unprofitable projects have been set aside, and new higher margin operations are coming on stream.
Fifty is the new thirty as M&S sets sights on the chic middle-aged. Marks & Spencer Group (MKS) is overhauling its clothing range as it targets customers in their 50s who want to dress like they are in their 30s. The High Street stalwart is improving the tailoring of its women’s clothes in a bid to win over sceptical customers and revive its ailing fortunes. It is also preparing to unveil another Holly’s Must-Haves collection selected by television presenter Holly Willoughby in time for Christmas. The 37-year-old has already launched two collections since September, with items such as a faux leather jacket and a leopard print dress, both costing £49.50, selling out within hours. And M&S is not just targeting middle aged women – it is also going after men in their 50s who want a younger look.
