Saturday , June 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

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 »

FT Opening Quote

May 24, 2016

Kingfisher’s French sales are anaemic, Nationwide ‘s profits are up 23 per cent, the AA may sell its Irish business. 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.
Racked with existential doubt, French consumers continue to hang out at the Deux Magots Café to discuss symbolist poetry, rather than doing up their apartments in the latest pastel shades. French sales of DIY group Kingfisher grew an anaemic 0.2 per cent in the first quarter in constant currencies.
Fortunately for Kingfisher, Britons and Irish people have more homely preoccupations, or at least feel more confident about their earnings outlook. Sales for the relevant division rose 6.2 per cent. Screwfix, the warehouse-based vendor of tools and associated bits and bobs lifted revenues an impressive 16.2 per cent.
Nationwide Building Society has announced decent full year results. Read ‘em and weep, bosses of quoted lenders. Statutory profits rose 23 per cent to £1.3bn, while the underlying number was 9 per cent higher at £1.4bn.
Gross mortgage lending increased 20 per cent to £32.6bn. A core capital ratio of 23 per cent could give a person vertigo. New chief executive Joe Garner is fronting his first set of annual results and must be conscious they may be hard to better.

Read More »

FT Opening Quote

May 23, 2016

Ryanair’s profits growth is set to slow, Bayer has offered $62bn for Monsanto, MPs are looking into what happened at 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.
Ryanair has forecast net profits growth will slow to 13 per cent in the current financial year to €1.37bn-€1.42bn. Prices will soften, according to motor-mouthed chief executive Michael O’Leary. The low-cost airline has just unveiled full year profits after tax 43 per cent higher at €1.24bn. That beat Ryanair’s forecasts, but not those of many City analysts.
Ryanair was helped by a €398m gain on the sale of its stake in Aer Lingus to International Airlines Group. But sales were also 16 per cent stronger. The company is leading the low-cost charge against national flag carriers that have high fixed overheads. It will take delivery of 52 new B737 aircraft this year, increasing the fleet to 380 planes.
Mr O’Leary has stopped cracking jokes about overweight customers in an effort to make Ryanair appear friendlier. But he is still sharing his opinions on Brexit, which the airline says would damage UK economic growth and consumer confidence for 2-3 years during negotiations to re-enter the single market on revised terms.

Read More »

FT Opening Quote

May 19, 2016

A Rolls-Royce bribery probe has spread to Nigeria, Royal Mail has posted in-line profits, Aston Villa has been sold. 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.
A probe into suspected bribery at Rolls-Royce has spread to Nigeria. The Serious Fraud Office is taking a look at the engine maker’s former operations in the energy sector in that country, the FT has learnt. The investigation already encompassed Brazil, China and Indonesia.
David Cameron was recently recorded describing Nigeria as “fantastically corrupt” , earning the riposte that bribery in developing countries has been fuelled by wealthy foreign corporations.
The news isn’t a big help to Rolls, which is trying to re-establish credibility with investors after a series of profits warnings. However, the allegations appear to refer to activities that ended in 2013 at the latest.
The consistent message of the thrilling “contingent liabilities” section of Rolls’ annual reports is that any costs arising from the SFO probe are covered by existing provisions.
Royal Mail has reported full year profits before tax £130m lower at £267m. The adjusted number reported by the parcel slinger was £538m compared with £569m last time.

Read More »

FT Opening Quote

May 18, 2016

Burberry has been checked by weakening Chinese demand, Arm has bought Apical for $350m, Playtech is struggling to find a 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.
A fashion faux pas this morning from Burberry, which reported profits before tax £29m lower at £416m. Slackening Chinese demand has been weighing on all luxury businesses and the weak out-turn at Burbs was expected by the City.
Sales of £2.5bn were 1 per cent weaker, while licensing profits were hit by the expiry of Japanese licenses. Chief executive Christopher Bailey (above) says the environment is likely to remain tough, but is talking up a programme to deliver annual cost savings of £100m by 2019.
There has been grumbling in the City that Mr Bailey’s dual role of CEO and chief designer has made it hard for him to focus on either metier. The FT recently reported a new executive would be appointed to back him up and doubtless analysts will quiz Mr Bailey on that point today.
Chip designer ARM has bought imaging specialist Apical for $350m in cash. The acquisition is supposed to complement Arm’s Mali graphics and video processing technology. Smartphones and machines such as robots and vehicles will need a growing capacity to interpret visual data as they become more autonomous.

Read More »

FT Opening Quote

May 17, 2016

LandSec is cautious ahead of the Brexit vote, Vodafone expects earnings to blossom from Project Spring, Premier Foods is back in the black. 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.
Land Securities, the UK’s biggest property company, lifted net asset value per share a hefty 10.9 per cent to £14.82 in the year to March 31. That’s in line with analysts’ estimates and the performance of rival British Land, which reported its own numbers yesterday.
Big property groups have benefited from improved economic tone over the last year, which has helped them to fill speculative developments with tenants. However, their mood is now more bearish in the face of such challenges to confidence as the Brexit vote.
Land Securities is particularly cautious, as reflected in a reduction in loan-to-value on its balance sheet from 28.5 per cent to 22 per cent.
Vodafone has reported full-year results bang in line with headline estimates. Sales were 3 per cent lower at £41bn while underlying earnings were 2.5 per cent weaker at £11.6bn.
The telecoms group slipped to a pre-tax loss of £450m, compared with a £1bn profit last time, reflecting investment.

Read More »

FT Opening Quote

May 16, 2016

ICAP is renaming itself NEX, British Land profits are up 16 per cent, the CBI has cut its UK growth forecasts. 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.

What’s in a name? A lot, in the view of City entrepreneur Michael Spencer (above), who considered 900 potential new names for his interdealer broker ICAP. And the winner is …NEX Group.
ICAP is turning from an interdealer broker into a technology-based trading platform business after selling its voice broking arm to Tullett Prebon, The new name “encompasses the spirit of an agile and innovative company that is robust, resilient and trusted”. So there.
It would be interesting to know what names suggested by the public did not make the cut. “Platty McPlatform Face”, maybe, à la the rather silly result of a contest to name an Arctic research vessel?
Market conditions have been tough for ICAP for the last few years. The year to March 31 was no exception, with trading profits dropping £26m to £203m.
British Land, the UK’s second largest property group, has performed better, helped by rental growth. Net asset value in the full year was 11 per cent higher at 919p, though that is a gnat’s whisker lighter than consensus. Underlying profits were 16 per cent higher at £363m.

Read More »

FT Opening Quote: HSBC stays in London

February 15, 2016

HSBC stays, Alliance Trust CEO goes, Brexit threats. This is Opening Quote. To receive it daily by email, sign up here.
No wonder bank bosses are well paid. Ordinary folks would have struggled to work out which country was the best base for HSBC. China, where trials are fixed, corruption is endemic and bearish investors get in trouble with the police? Or the UK, where trials are mostly fair, bribery is rare and shorting is seen as helpful to price discovery? HSBC’s board has earned its corn by deciding to stay in London, citing the talent pool and the growth of renminbi trading rather than anything that might upset the Chinese. This might seem like a no-brainer. But it is worth remembering that when the bank began reviewing its location, Chinese markets were stronger and the mood towards bankers was sourer in the UK. The chancellor had introduced the penal bank levy, no slowly being phased out.
As the FT’s Martin Arnold points out, the focus of HSBC watchers will now turn to succession. Stuart Gulliver is the longest-serving CEO of a large UK bank and can be expected to step down in the next year or so, preceded perhaps by chairman Douglas Flint. Katherine Garrett-Cox is stepping down rather sooner as chief executive ofAlliance Trust Investments.

Read More »

FT Opening Quote

January 4, 2016

A New Year sell-off in China, a clarification from Sports Direct in the UK, a New Year robot resolution in the US. 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.

Happy New . . . Yikes!
Chinese stock markets were halted for the day after dropping more than 8 per cent, partly in response to weak manufacturing numbers. The use of circuit breakers in China is a reminder that Asian volatility can be expected to overhang the UK market for much of the year ahead.

Resource stocks will thus remain subdued, even if broader stock indices can shrug off the worst Chinese contagion, as they did last autumn. Manufacturers are also exposed, as highlighted in a CBI survey that found most members enjoyed a strong finish to 2016.
Oil has firmed in recent trading, meanwhile. But the price remains too depressed to light much of a fire under the shares of Cairn, which has announced successful testing of an appraisal well off the coast of Senegal. The group, which entered the oil rout in better shape than rivals, says it believes reserves can be tapped at commercial flow rates.
Controversy rumbles on at Sports Direct, which recently promised to raise wage rates after allegations of poor labour practices.

Read More »

FT Opening Quote – Peppa in pink with Spielberg deal

December 17, 2015

Peppa Pig owner Entertainment One has made a deal with ET’s Steven Spielberg, AstraZeneca has revealed it will pay $4bn for Acerta Pharma. 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.

This is Peppa Pig’s chance to jump in puddles with ET. Entertainment One, the business that controls rights to the shocking pink uberporker, is extending its relationship with veteran Hollywood producer and director Steven Spielberg.

They are setting up a four-way partnership called Amblin Partners. The other associates are Anil Ambani, chairman of India’s Reliance Group, and Jeff Skoll, chairman of Participant Media.
Amblin Partners will produce movies that eOne will distribute across a series of territories. Films in production include The BFG and an HBO production featuring Breaking Bad star Bryan Cranston.
Peppa better not hang out with Cranston’s meth-cooking alter ego Walter White, or she could pick up habits worse than jumping in puddles.
AstraZeneca has announced the terms of its acquisition of Dutch-US drug company Acerta Pharma. The UK group will buy 55 per cent of the equity of the cancer specialist for $2.5bn. It will pay a further $1.5bn by the end of 2018. Acerta investors can sell their remaining shares for $3bn net under an options agreement.

Read More »

FT Opening Quote – RBS seeks dual-track Williams & Glyn disposal

December 16, 2015

RBS has doubled its efforts to sell Williams & Glyn, with both an IPO and a trade sale being pursued. Lord Livingston is in demand again, while deputy heads are rolling at Rolls-Royce. 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.

This will end in disappointment for someone. The Royal Bank of Scotland is adopting the modish practice of selling a business – in this case sub-bank Williams & Glyn – via a “dual track” process. This means preparing the company for a flotation, while simultaneously hawking it round trade buyers.
It is a good way of securing a decent price, while creating a safety net if institutions give the company the raspberry during marketing for the initial public offering.
However, fund managers tend to get a bit tetchy when their meal is whipped from under their noses because another diner is prepared to pay more for it.
The irony is that RBS already tried to sell W&G to a trade buyer, in the form of Santander, but the deal fell apart on systems integration problems.
Lord Livingston of Parkhead, aka ex-BT boss Ian Livingston, is the new go-to guy to hire as a non-exec. Dixons Carphone has appointed him as deputy chairman. It has therefore pipped Man Group to the post.

Read More »

FT Opening Quote – Carpetright is getting it right

December 15, 2015

Carpetright is walking on thicker pile profits this morning, Imagination has been hit by a slowdown in chip and smartphone sales, the Aveva-Schneider Electric deal is off, but UBM has sold PR Newswire to Cision for $841m. FT Opening Quote, with commentary by Deputy Companies Editor Matthew Vincent, is your early Square Mile briefing. You can sign up for the full newsletter here.

It is only 4 miles down the A3 from Peckham to Clapham High Street but, for a carpet retailer seeking to move upmarket from its cheap and cheerful east end origins, the two locations are – to quote the Christmas advert of the ultimate middle class home furnisher – “half the world away”.
Of course, Carpetright’s new south London boutique was never going to transform its performance or its image – shaped by founder Lord Harris of Peckham – as the place to go for discounted plain beige twist pile. And the company has a lot further to go to rival John Lewis for hardwood flooring. But the shift in strategy has been closely watched by investors treading carefully after recent profit warnings. So this morning’s news that pre-tax profit edged up 6 per cent to £7.1m, on sales up 1.4 per cent to £231.2m, despite 22 old store closures, puts the group on a sounder footing.

Read More »

FT Opening Quote – Oil is troubled waters for Fed, Shell

December 14, 2015

The collapsing oil price is a ground for concern for the Fed as it decides on interest rates this week and for Shell, which is one step closer this morning to acquiring BG. 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.

Would an expected rise in US interest rates this week trigger a rout in equities or bond markets? Pundits have been envisaging both apocalyptic visions. In the first case, a sell-off would be a response to the end of the easy money era. In the second, fixed-rate securities would tumble as better bank rates lured investment.

The financial crisis showed up the weakness of the efficient markets thesis, which proposes all information is immediately reflected in securities prices. However, markets would need to be perversely inefficient to respond in panic to a rate rise that has been so heavily trailed.
That won’t stop Fed watchers debating every nuance of the decision, due on Wednesday. This will create some welcome volatility for trading desks, which have mostly had a lousy year.
The further weakening of oil and other commodities is giving pundits grounds to suggest Fed boss Janet Yellen may sit on her hands after all.
The oil price is also a teaser for Shell, would-be acquirer of BG. The takeover was originally predicated on oil prices of over $70 a barrel.

Read More »