Friday , November 24 2017
Home / Chris Nuttall
Chris Nuttall

Chris Nuttall

Award-winning journalist with more than 35 years' experience in newspapers, magazines, radio, TV and the internet at local, national and international levels. At the BBC for 17 years and has spent the past 15 with the Financial Times. Served as a foreign correspondent in Sri Lanka, Washington and Turkey as well as in a roving role for the BBC. Turned a late 1980s geeky interest into a professional focus on the internet and technology and was founding World Editor of the BBC News website and the BBC 's first Internet Correspondent.

Articles by Chris Nuttall

FT Opening Quote – Severn flooded with incentives

19 hours ago

Water company Severn Trent hit the headlines (or should that be the ley lines?) earlier this week when it emerged that its engineers still used ancient divining, or “dowsing”, rods to find underground pipes – despite widely held scientific opinion that they don’t actually work. And, this morning, Severn Trent investors will be trying to divine the likely outcome of an upcoming regulatory price review – despite widely held opinion that these don’t work, either, writes Matthew Vincent.A Financial Times editorial recently concluded: “the hurdles [the regulator] has set — above which the utilities keep the winnings — have proved too easy to clear”.Severn Trent has provided some evidence for this notion in its half-year results. It said its so-called “outcome delivery incentives” – financial

Read More »

FT Opening Quote – Thomas Cook suffers Spanish price war, Budget day, Whitman to quit HP

2 days ago

Thomas Cook, the FTSE 250 tour operator, has been offering so called Black Friday discounts a few days early, according to tabloid newspaper bargain hunters, writes Matthew Vincent. And, given every Friday from now until May is forecast to be largely black from 3:00pm to the following 2.55pm, one can see the appeal of £200 off a sunshine break. But such early price cutting is normally a warning sign, according to broadsheet newspaper profit-warning hunters. So does it mean red ink, rather than black, for the company?Not so, Thomas Cook announced this morning, as full-year revenues showed good growth: rising 9 per cent to £9bn on a like-for-like basis, adjusted for foreign exchange – against analyst estimates of £8.5bn.And it says the outlook for holiday bookings to the Middle East and

Read More »

FT Opening Quote – easyJet’s last call for McCall

3 days ago

EasyJet boss Dame Carolyn McCall is presenting her last set of annual results this morning – before she leaves the budget airline for broadcaster ITV, writes Matthew Vincent. So this is the last time she will have to endure aeronautical puns and metaphors in every single report of the company’s numbers. That said, with some reports suggesting she’s heading to the departure gate with £5m in salary and shares, she may not mind that at all. So, Opening Quote is happy to offer both treatments/(final) approaches.In the full-year to September 30, easyJet’s revenues increased/soared by 8 per cent to £5bn – better than/cruising at an altitude just above UBS analysts’ estimate of £4.8bn. Much of this improvement/rate of climb reflected a similar 8 per cent increase in capacity, to 86.7m seats, as

Read More »

FT Opening Quote – William Hill books 30% US growth

4 days ago

Bookmaker William Hill is fancied to extend a recent run of good results, writes Matthew Vincent. Analysts at Investec reckon the FTSE 250 group’s low level of hedging on the recent boxing match between Floyd Mayweather and Conor McGregor will have helped it to outperform rival Ladbrokes Coral.Analysts at Barclays reckon a less draconian government crackdown on fixed odds betting terminals could mean it loses nearer £55m than £284m in revenue – and the odds are shortening. And all analysts are looking forward to 2018’s quadrennial festival of punter stupidity known as the football World Cup. Expect an extremely “low level of hedging” on any England victory. Or even a goalless draw against Costa Rica. In fact, get a result in the government review, and William Hill may be off to the

Read More »

FT Opening Quote – Parcel post boosts Royal Mail

8 days ago

Royal Mail’s best result in the last half year has arguably been staving off industrial action ahead of the vital Christmas period, writes Matthew Vincent. It seems the Communication Workers Union – which was disputing pension changes and pay – had not realised a pre-strike mediation agreement was legally binding.But it can’t claim the paperwork got lost in the post – as most organisations use email these days. And that is the second major problem that Royal Mail cannot put off forever.Credit Suisse has already warned that a switch to digital communications by the government and high street banks will result in a 4 per cent annual decline in letter volumes, a percentage point worse than consensus estimates. That would potentially cost Royal Mail a further £30m of earnings.So the best that

Read More »

FT Opening Quote – Barratt, Crest Nicholson build sales

9 days ago

[unable to retrieve full-text content]
Is the new-build housing boom over? asks Matthew Vincent. This morning’s trading updates from Barratt Developments, Britain’s biggest housebuilder, and Crest Nicholson, the ninth biggest, might suggest some flatlining on certain measures. But with next Wednesday’s Budget almost certain to include yet more government support for first time buyers – in the form of Help To Pay Less Stamp Duty rather than More Help To Buy – there seems little immediate risk to the companies’ sales and profitability. Indeed, so consistent has government financial support been for its only consistent policy that, were they to own shares, half the cabinet could be done for insider trading, and the other half for market manipulation.Continue reading: FT Opening Quote –

Read More »

FT Opening Quote – ITV raises curtain on 7% ad fall

10 days ago

Last week at the London Palladium, ITV showcased the best of its televisual talent and new content for an audience of advertisers – as well as for soon-to-start chief executive Dame Carolyn McCall, writes Matthew Vincent. Then, yesterday, Amazon announced its new blockbuster TV productions as it seeks to lure more viewers away from traditional broadcasters. Their respective offerings can perhaps be summed up as Simon Cowell, Piers Morgan, and the cast of Loose Women versus a multi-season adaptation of JRR Tolkien’s Hobbit-laden fantasy Lord of the Rings.Given the millions of fans who made HBO’s Game Of Thrones such a smash hit, Opening Quote is putting its money on the ageing diminutive hairy creatures… and it doesn’t mean [fill in your own ITV-star punchline here].This is perhaps being a

Read More »

FT Opening Quote – Ladbrokes Coral betting on good review

11 days ago

Ladbrokes Coral is updating the market in week two of a 12-week regulatory consultation period that will decide the future of UK betting shops, writes Matthew Vincent. If the government listens to campaigners rather than bookies, and imposes the maximum cut to stakes on fixed-odds betting terminals, hundreds – possibly thousands – of high-street outlets could close, so reliant are they now on these in-store machines.So this morning, the company is really doing more than disclosing recent trading. It is:Indicating how much revenue there is to be lost through a cut to FOBT stakesHelping likely bidders, such as GVC, work how little they need to pay in an industry consolidation deal.Gaining one last chance to send a message to the politicians who will rule on its future.So what has it

Read More »

FT Opening Quote – Sainsbury highlights £100m savings

15 days ago

Some Sainsbury’s staff have been complaining to the Sun newspaper about cutbacks in the free toast and conserves that accompany their tea breaks – at store managers’ discretion, writes Matthew Vincent. But with 112 of the group’s supermarkets now containing an Argos outlet full of toasters, sandwich makers and other bread-related appliances, one would think this problem hardly insoluble. Indeed, given the sales growth these Argos stores achieve relative to food, they have also been the company’s best hope of jam today.Hungry shareholders, however, have been hoping for some crumbs of comfort about recovering grocery sales – and reasons to believe there will be jam tomorrow.At its quarterly update in the summer , Sainsbury’s said Argos’s ability to outperform the wider market had helped

Read More »

FT Opening Quote – M&S helped by Paddington duffle coats

16 days ago

Marks & Spencer’s seemingly ever-earlier launch of its Christmas TV advert has long been a source of delight to the middle classes and indignation to middle-aged commentators, writes Matthew Vincent. In fact, first sightings of ‘Paddington and the Christmas visitor’ on November 6, a new ad featuring the Peruvian emigre bear, caused one contemporary of Opening Quote to despair: “Just thrown away the Halloween pumpkins and the Christmas ads have started…”.Naturally, I believe my fellow curmudgeon has a point. But it may not bode well for M&S investors, either. Not just because the company feels a need to flog mince pies and stocking fillers before last weekend’s sparkler burns have healed. But because of its focus on a blue duffle coat and red hat ensemble. Last week, rival clothes retailer

Read More »

FT Opening Quote – Minnie Mouse powers ABF’s Primark

17 days ago

Is there nothing Disney cannot do? writes Matthew Vincent in this morning’s FT Opening Quote. It has held talks about taking over Rupert Murdoch’s 21st Century Fox, including the US group’s stake in UK-based Sky. It has rescued the Star Wars film franchise from the cringe-inducing antics of Jar-Jar Binks in all those tedious prequels. And now, it seems, it has helped Primark-owner Associated British Foods boost its annual profit by 22 per cent, with a range of keenly-priced Minnie Mouse accessories and strangely persistent press coverage.This morning, the FTSE 100 food and clothing group said its statutory pre-tax profit in the year to September 16 was up 21 per cent, to £1.33bn, exactly in line with analysts’ estimates.Discount clothing chain Primark led the way, increasing its sales by

Read More »

FT Opening Quote – HSBC pledges $100bn green finance

18 days ago

HSBC, having just been accused of “possible criminal complicity” in money laundering, must be glad to be fielding questions on a positive clean-up story today, writes Matthew Vincent in FT Opening Quote. This morning, it has promised $100bn of finance for low-carbon technology and sustainable development by 2025 as part of a package of measures to strengthen its commitment to tackling climate change and other “green” goals.Last week, former Labour cabinet minister Peter Hain said he had asked the UK Treasury and the Financial Conduct Authority to investigate alleged transfers of cash out of South Africa by the powerful Gupta business family. HSBC said it was looking into the claims. For now, though, the bank is able to focus its energies on clean energy. In a range of new policies, it is

Read More »

FT Opening Quote

June 30, 2016

Legal & General has brushed off the effect of the Brexit vote, Tory leadership nominations close at noon, Mark Carney speaks at 4pm. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here.
Consumer confidence has slumped since the Brexit vote, according to a YouGov/CEBR poll. This suggests optimism has dropped to its lowest level since May 2013. Retail spending is likely to ebb, hurting shopkeepers.
Mark Carney is giving a speech later today. It will be interesting to see whether he puts a brave face on the referendum result, having previously suggested a Brexit vote could trigger a recession. Bosses of quoted business who backed Remain may also have to reverse away from the alarmism that was the worst feature of that campaign.
Legal & General kept its nose out of the debate and says disruption to its retirement division was “minimal”. Bulk annuity sales by the business were £3.6bn in the first half, compared with £2.4bn in the whole of 2015. Lifetime mortgage sales exceeded individual annuity sales
3i has received a series of approaches for its stake in Benelux-based discount retailer Action. The quoted private equity group says it has no plans to sell its investment or float the business.

Read More »

FT Opening Quote

June 29, 2016

Michael Sherwood of Goldman Sachs faces a grilling from MPs on BHS, house prices are up 5.1 per cent in June, says Nationwide, Dixons Carphone profits are up 17 per cent. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here.
Most investment bankers would no more discuss their client relationships on camera than their love lives. Michael Sherwood, co-head of Goldman Sachs in Europe, is preparing to do so this morning, as MPs scrutinise Sir Philip Green’s sale of BHS for £1.
The retailer collapsed earlier this year with a £571m pension deficit. So Goldman’s unpaid advice on the credibility of buyer Dominic Chappell is under the spotlight.
Mr Sherwood’s task is to avoid the appearance of evasiveness or bad temper, without giving so much away that clients feel exposed speaking to him in future. The committee may investigate his habit of taking on larger-than-life customers who are not always popular in the City or Westminster. These include Sports Direct’s Mike Ashley, another actor in the BHS drama.
Dixons Carphone has raised full year “headline” profits before tax (which exclude merger amortisation) 17 per cent to £447m and is increasing its dividends 15 per cent to 9.75p. The merger of Dixons and Carphone Warehouse, dismissed by critics as defensive, has gone well.

Read More »

FT Opening Quote

June 28, 2016

They think it’s all over, but maybe not yet. Despite Brexit and England’s exit from the Euros, Redrow and Rolls-Royce are upbeat this morning and the pound has steadied. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here.

England is out of Europe thanks to a flaxen-haired force of nature. Well, that was the football, with Icelandic goal-scorer Kolbeinn Sigthorssonsealing the fate of Roy Hodgson’s side in Nice last night.
As for Brexit, a couple of big listed companies are this morning telling investors to calm down, dear.
Redrow, whose shares have been battered alongside those of other housebuilders, says the “chronic shortage of housing leaves market fundamentals unchanged”. The company reports there were long queues at sites launched last weekend. Full year pre-tax profits are now expected to beat analysts’ estimates of £240m. Rolls-Royce says the Brexit vote will have no immediate impact on its day-to-day business, with the longer-term picture taking years to emerge.
Perhaps the banks should make statements of their own? Barclays fell 17.3 per cent and RBS dropped 15 per cent on Monday. The sell-off looks overdone, given the hefty capital buffers banks are now required to maintain.
The pound stabilised in early trading at $1.3291, 1.3 per cent higher than its low on Monday.

Read More »

FT Opening Quote

June 27, 2016

George Osborne has said he is staying on as chancellor and has put off plans for an emergency budget. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here.
George Osborne is clinging on as chancellor. In a speech intended to reassure the markets which ended around 7.20am, he was tucking in behind the pro-Brexit vote, saying his duty was to stick around and assist with negotiations on the UK’s departure from the EU.
The chancellor said he had spent the last 72 hours talking to the bosses of big financial institutions and figures such as the US Treasury Secretary and the governor of the Bank of England. His conclusion is that the UK can deal with any shocks. There is “a robust contingency plan”, he said, with the Bank ready to pump up to £250bn into the banking system if needed.
Ozzy stepped back from the swingeing emergency budget he promised during the referendum campaign, with the elegance of a toreador dodging a charging bull. A budget depends on the selection of a new prime minister, he implied. We do not of course know whether the politician formerly known as Gideon would deliver it.
Political journalists are talking up the possibility Mr Osborne may throw in his lot with Boris Johnson if the peroxide opportunist emerges as Tory leader, perhaps as foreign secretary.

Read More »

FT Opening Quote

June 23, 2016

Tesco sales are gaining momentum, the pound has hit a high for the year as voting begins in the UK’s EU referendum. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here.
The moment of truth will come on Friday morning – a verdict with big implications for business that could change the lives of millions (roll of drums). Yes, tomorrow the Competition and Markets Authority will decide whether to set up a database of “disengaged customers” who can’t be bothered to switch energy supplier.
That aside, there’s the small matter of the Brexit vote. Sterling hit a year high of $1.4844 in Asia earlier this morning in response to a couple of polls. Analysts believe risks are clustered on the downside, with sterling and stocks forecast to fall 10-20 per cent following a Leave victory.
A gloomy outlook is supported by the comments of Standard & Poor’s chief sovereign ratings officer Moritz Kraemer in the German daily Bild. He said the UK could swiftly lose its AAA credit rating if Britons decide to quit the UK.
The verdict will show whether we are a “nation of xenophobes or cowards”, according to one FT colleague. That’s a cynical view, but not a bad characterisation of the Leave and Remain campaigns.
Tonight will be a night of coffee and pizza for many Forex and rates traders.

Read More »

FT Opening Quote

June 22, 2016

David Cameron has promised a Remain dividend, Elementis has warned on profits. Hornby needs Airfixing. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here.

David Cameron has promised a “Remain dividend” if Britons vote to stay in the EU. In an interview with the FT, he said businesses and “job creators” would “pile back into the economy”. It’s welcome to hear a positive message from the Remain camp, whose tendency to accentuate the negative resulted in the derogatory nickname Project Fear.
London Mayor Sadiq Khan squared the account last night by accusing Brexiters of mounting a Project Hate over immigration. The only missing constituency now is Project Crikey I’ll Be Glad When This Ghastly Referendum Is Over, to which OQ firmly belongs.
As to the Remain dividend, it’s likely sterling and equities would rally if the UK opts to stay in. Risks are heavily stacked on the downside, according to a currencies expert OQ talked to yesterday, not least because a recent surge in the pound has squeezed a lot of short money out of the market.
Brer Corporate Financier informs us that over £10bn of initial public offerings would be transacted largely through London (though not all would be London listings) in the next twelve months, if Remain wins.

Read More »

FT Opening Quote

June 21, 2016

Hungarians have been having a say on sterling and the UK’s EU referendum, Whitbread sales have been given a Costa coffee boost. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here.
How much weight should the views of Hungarians have in the Brexit debate? Quite a lot, when one of them is George Soros, the Budapest-born, US-based investor. He helped drive the pound out of the European Exchange Rate Mechanism in 1992 and believes sterling could drop 15- 20 per cent if Britons vote to leave the EU.One hesitates to contradict the famous investor, who has written a piece for The Guardian. But 15-20 per cent seems like a surprisingly large correction. Sterling floats freely and markets are making an allowance for the possibility of a pro-Brexit vote, which is reflected in opinion polls split down the middle.
Countries participating in the ERM were required to keep their currencies trading within narrow relative bands through market interventions and rate-setting. This made sterling more susceptible to a steep fall back then – 15 per cent against the Deutschmark in the weeks following Black Friday, when the Treasury gave up trying to defend it.
The other notable Hungarian is prime minister Viktor Orban, who took out a full-page advert in the Daily Mail. He urged readers to vote Remain.

Read More »

FT Opening Quote

June 20, 2016

Sterling and markets are surging as sentiment swings back towards a Remain vote in the UK’s EU referendum. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here.
It is hard to understate the significance of this week’s referendum on EU membership. If the Leave camp wins, it would be the biggest event in the UK’s economic relations with the continent since sterling crashed out of the European Exchange Rate Mechanism in 1992.

The pound rallied in Asian morning trading after polls showed Leave losing ground. Sterling rose as much as 1.9 per cent to $1.4623. Asian shares also made a modest recovery. Polls over the weekend suggested the Leave and Remain camps were neck-and-neck, following a brief cessation of campaigning triggered by the murder of MP Jo Cox.
Global market jitters around the Brexit vote appear to overstate the likely economic impact of Leave winning, which would be most heavily felt in the UK. The referendum may therefore be seen as a flashpoint for volatility that was building up already. A proportion of asset managers privately believe a serious downturn in equities is overdue.

Read More »

FT Opening Quote

June 15, 2016

Sir Philip Green is about to face MPs over the collapse of BHS, George Osborne is warning of an emergency budget, Aveva’s talks with Schneider Electric have collapsed again. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here.
The boss of Arcadia is due to face a parliamentary committee investigating the collapse of BHS in just over an hour. Reams have been written under the headline “Questions MPs should ask Sir Philip Green”. Little has been said about how he should behave.
The first challenge facing the Svengali of the rag trade will be to keep his temper. Sir Philip has a short fuse and MPs will be tempted to see if they can light it. Anger is the short cut to putting his foot in it. This brings us on to Point Two: don’t swear or crack jokes. The entrepreneur uses some colourful language in private and has a sardonic sense of humour. He needs to keep it clean and straight-faced for the cameras. Thirdly the entrepreneur and part-time admiral in the Monaco Navy must sound contrite – 11,000 people have lost their jobs
Sir Philip can be expected to avoid negotiating a settlement of liabilities for BHS’s underfunded pension scheme on-air, not least because committee chair Frank Field MP wants £600m, far more than is needed to cover the deficit on an ongoing basis.

Read More »

FT Opening Quote

June 14, 2016

Ashtead and Crest Nicholson have built some strong profits from the construction sector, Premier Farnell has agreed to a £615m Swiss takeover. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here.
There are strong numbers from the construction sector this morning. Plant hire company Ashtead has raised full-year underlying pre-tax profits 24 per cent at constant rates to £645m. That compares with a consensus forecast of around £618m. Housebuilder Crest Nicholson also lifted PBT by a quarter, to £72.6m at the half-year stage.
Ashtead’s job is the harder. It has to anticipate demand for the building equipment stocked in its depots, many of which are in the US. The shares have slid over the last year, despite a strong performance. Jitters about the US economy have fed through to patchy construction starts. Investors must believe the picture is rosier for UK housebuilders, perhaps because of structural under supply.
Premier Farnell, the Leeds-based electronic engineering group, says it is being bought by the Swiss manufacturing group Dätwyler. It is paying 165p in cash per share – a premium of around 51 per cent to the closing price of 109.3p on Monday, in a deal worth around £615m. This gives Premier an enterprise value of £792m.

Read More »

FT Opening Quote

June 13, 2016

Sterling is under pressure ahead of next week’s EU referendum, Sir Philip Green is set to be grilled by MPs on the collapse of BHS. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here.
It’s the final countdown, as Swedish hair rock band Europe sang in 1986. Next week, Britons go to the polls to decide on a crucial proposition:whether opinion pollsters or bookies are better at judging public opinion.
There’s also the side issue of the UK’s membership of the European Union to vote on. Gambling odds point to the UK remaining, but opinion polls suggest the decision is finely balanced. It’s the biggest issue most Britons will ever vote on.
Most economists believe Brexit would damage the economy. Sterling has accordingly fallen to an eight-week low against the dollar.David Cameron will let former prime minister Gordon Brown make much of the running in pro-Remain campaigning this week. Labour waverers are seen as a key swing vote. Current Labour leader Jeremy Corbyn has been lukewarm in his support for the union.
It’s so far been a quiet morning for corporate news. Satellite operator Inmarsat has struck a strategic partnership in maritime communications with SpeedCast of Australia. Exhibitions and publishing group UBM has received US regulatory approval to sell its PR Newswire business.

Read More »

FT Opening Quote

June 9, 2016

Amazon is getting fresh with a UK grocery delivery service, RPC is buying British Polythene, Glencore has made a $625m stake sale. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here.

Enjoyed that stick of celery? Then may we recommend this radish to you?Amazon is today launching its AmazonFresh groceries delivery service in the UK. Same-day delivery will be available to members of the Prime service in central and east London.
Big UK retailers are quaking in their boots at the prospect of the US tech giant horning in on their market. Their margins are low enough already, without the intervention of Amazon. Jeff Bezos’s business model involves making no profits and paying very little tax.
It’s worth noting, however, that analysts imagined Walmart would hollow out UK retailing following its acquisition of Asda in 1999. It did not happen. Selling perishable goods is a more complicated business than books and DVDs, moreover.
At last, it looks like two big companies have overcome Brexit jitters and agreed a merger. The deal between Sky and Vodafone is in New Zealand though, about as far as you can get from Nigel Farage without a space ship.
The two convergent communications groups are putting together their Kiwi operations.

Read More »

FT Opening Quote

June 8, 2016

AO World losses have increased as it tries to expand in the UK and Germany, Sainsbury sales are down, Tesco is set to sell Giraffe. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here.
AO World, the online white goods business helmed by fast-talking founder John Roberts, has announced an increased group operating loss of £10.6m. Sales meanwhile rose 26 per cent to almost £600m. The company is in a land grab for market share in the UK and Germany, in competition with other online groups and traditional bricks and mortar retailers.
Mr Roberts, who features in a new top ten of chief executives published by Glassdoor, has tweaked current year guidance for adjusted UK ebitda upwards to £21m-£25m. The nascent European division is expected to make losses of E26m-E30m on the same accounting basis.
Chairman Richard Rose is stepping down in favour of Geoff Cooper, who also chairs Card Factory, a float of roughly the same vintage as AO.
Like-for-like retail sales dropped 0.8 per cent before fuel in the first quarter at Sainsbury. Chief executive Mike Coupe described market conditions as “challenging” but with the chain “well-positioned”, a view that investors appear to share, at least in comparison with other supermarkets.
For Tesco, buying Giraffe turned out to be a case of overreach.

Read More »

FT Opening Quote

June 7, 2016

Shell sees more cost savings in its purchase of BG, esure may spin off gocompare, the CMA will investigate the Tullett Prebon-ICAP deal. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here.
Shell has raised its target for cost savings from the £35bn purchase of BG Group by 30 per cent to $4.5bn in 2018. Chief executive Ben van Beurden expects to deliver the original target of £3.5bn in 2017 ahead of schedule.
Mr Van Beurden is under pressure to prove the BG deal is worthwhile after the oil price fell sharply. However the transaction, a large chunk of which was paid for in shares, has been supported by most shareholders because they believe it will replenish Shell’s reserves affordably.
Shell has a capital markets day today. It has published a strategy update that classifies deep water drilling and chemicals as “growth priorities”. Renewables come last in a list of “future opportunities”, where investment will be low.

Gocompare.com could go it alone. Insurer esure, which owns the price comparison website, has launched a strategic review that could result in demerger. Esure has appointed Matthew Crummack to lead the subsidiary. He was previously chief executive of lastminute.com.

Read More »

FT Opening Quote

June 6, 2016

Mike Ashley faces Sports Direct questions from MPs on Tuesday, Janet Yellen makes a speech this evening, lobsters are on a luxury journey to restaurant tables. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here.

Mike Ashley will answer MPs’ questions after all. Lawmakers expect to quiz the entrepreneur on the employment practices of Sports Direct on Tuesday. He is likely to rebut claims that staff at the sportswear retailer’s Shirebrook warehouse were paid less than the minimum wage. The entrepreneur had previously made his appearance conditional on MPs visiting the site.
There is uncertainty over the legal force with which parliamentary select committees can summon witnesses. While the power over UK citizens is statutory, sanctions for non-attendance, which include dubbing those who stay away “in contempt of Parliament” have not been tested in recent times.
Sir Philip Green, a friend of Mr Ashley, faces his own appearance before a select committee next week, when his sale of BHS for £1 will be under the spotlight. The Pensions Regulator has meanwhile denied press reports that it is “refusing” to discuss a restructuring of BHS’s underfunded pension scheme proposed by Sir Philip.
It’s so far been a quiet morning for corporate news. EasyJet carried 6.9m passengers in May, a 5.

Read More »

FT Opening Quote

May 31, 2016

Spread betting group IG says its punt on online advertising is paying off, Alliance Trust has confirmed RIT’s approach about a possible merger. FT Opening Quote, with commentary by Oliver Ralph, is your early Square Mile briefing. You can sign up for the full newsletter here.
Spread betting group IG has been enjoying some good fortune. In a trading update this morning, the company said that results for the year would be slightly ahead of expectations. IG has been pushing up its online advertising spending, but that particular wager appears to be paying off. The higher costs have been more than offset by the resulting growth in revenue.
Alliance Trust has confirmed the Financial Times story over the weekend that it has been approached by RIT Capital Partners, a rival investment trust, about a possible merger. Cue some tough questions for Alliance Trust shareholders about what they might or might not accept in terms of deal. The company has had a troubled recent history and the 10 per cent discount to net asset value at which the shares closed last week suggests that the market still has doubts about its future. But the board has recently been refreshed. Does the new team deserve the benefit of the doubt? And would Alliance Trust’s shareholders accept anything less than the net asset value for their shares? Plenty of summer soul searching ahead.

Read More »

FT Opening Quote

May 26, 2016

Electra has a new activist CEO, Tate & Lyle profits have recovered, Brent crude is back above $50 a barrel. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here.

US activist Edward Bramson (above) is tightening his grip on Electra Private Equity, the historic investment group whose board he joined through an acrimonious proxy battle in November. Mr Bramson will become unpaid interim chief executive as a wide-ranging review continues.
Electra has served notice it will terminate its agreement with its autonomous investment management arm Electra Partners, which it may still retain.
The news will send a cold shiver down the spines of City executives who fear their own businesses could attract the attentions of activists.ValueAct, a gentler breed of activist, recently parachuted a director onto the board of Rolls-Royce. Alliance Trust’s chief executive Katherine Garrett-Cox was eventually ousted by Elliott.
Rejoicing amidst the roustabouts as oil surges above $50 per barrel in Asian trading. The FT’s Gregory Meyer writes that Canadian wildfires have taken 1m barrels a day out of production while militant action in Nigeria has hit output too.
Crude has almost doubled since January.

Read More »

FT Opening Quote

May 25, 2016

M&S full-year profits are down 18 per cent, Dixons Carphone has raised its guidance, Royal Mail has avoided new price controls. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here.
Steve Rowe, the incoming chief executive of Marks and Spencer has described the underperformance of the retailer as “not satisfactory”. He aims to banish frumpy cardies and unbecoming pumps with a focus on product, quality and fit. However this will “have an adverse effect on profit in the short term”.
M&S has unveiled full year results which show profits before tax slipped a discouraging 18.5 per cent to £488m in the 53 weeks to April 2. Underlying profits before tax, which exclude a bunch of writeoffs rose 4.3 per cent to £689m.
Mr Rowe has replaced Marc Bolland, whose strength as a food retailer was overshadowed by M&S’s weakness in clothing. He has published a strategic update, the summary of which talks about obvious things such as shareholder returns and which will rely on clever execution to succeed.
More cheerfully, Dixons Carphone has moved its full year headline profits forecast into the top half of its previous range at £445m-£450m. Like-for-like full year sales increased 5 per cent. There was a scepticism about the merger that created the group in 2014, which some saw as defensive.

Read More »