The Times
Ocado delivers surprise losses as it raises £144 million to expand: The retail group made the announcement yesterday as it revealed that it had slipped into the red again, making a pretax loss of £500,000 in the year to 03 December. This compares with a £12 million profit the year before and was well below the stock market’s forecast of about £7 million.
Exploration boost and oil price rise mean BP is ‘firing on all cylinders’: BP hailed its strongest annual results since before the Gulf of Mexico disaster yesterday, as higher oil prices, increased production and lower costs combined to deliver a surge in profits.
‘Babcock is not another Carillion’: Shares in Babcock slid to a seven-year low yesterday as the defence contractor admitted to a £100 million revenue shortfall and said that it had held meetings with Cabinet Office officials in the light of the collapse of Carillion.
Luxury yacht builder fights to stay afloat: Oyster Yachts, which also has a boatyard in Hoveton, Norwich, and offices in Ipswich, Majorca and the United States, is reported to be looking for adequate financial support to remain afloat. It is understood some of the staff have been sent home on unpaid leave.
Tesco fraud trial abandoned after defendant has heart attack: The trial of three former Tesco Executives accused of fraud has been abandoned after one of the defendants suffered a heart attack and the judge ruled that it would be unfair to continue.
The Independent
U.K. economy will expand by 1.9% in 2018 and 2019 if soft Brexit is secured, according to latest Niesr forecast: The U.K. economy will expand by 1.9% both this year and next, according to the latest forecast from the National Institute of Economic and Social Research (Niesr), but only if Ministers secure a soft Brexit.
Poundland ‘Elf Behaving Badly’ campaign banned and deemed ‘demeaning to women’: Poundland’s controversial “Elf Behaving Badly” campaign featuring a child’s elf toy in a series of sexualised poses has been banned for being irresponsible and likely to cause widespread offence.
Financial Times
‘No plans’ to keep building Anglo American stake, says Agarwal: Indian metals tycoon Anil Agarwal says his decision to invest in Anglo American has been a success but he has no plans to add to his 21% interest in the London-listed miner.
Rival’s woes help boost new business at broker Hargreaves Lansdown: Hargreaves Lansdown said problems with one of its competitor’s platforms helped drive strong growth in new customers in its first half, despite the delayed launch of its cash management product which had been billed by analysts as potentially “transformational”.
Investec to appoint co-CEOs amid changing of the guard: Investec will promote both its Chairman and the head of its asset management arm to serve as co-Chief Executives as part of a generational handover at the South African bank.
Intesa unveils new strategy to boost growth: Shares in Italian bank Intesa Sanpaolo rose 1.8% as Chief Executive Carlo Messina unveiled an ambitious four year plan to almost halve its stock of bad loans and boost net income.
BNP Paribas boosts profit targets on improving economic outlook: BNP Paribas boosted its profit targets on the back of an improving economic outlook even as its fourth quarter results came in below expectations, held back by higher costs.
Munich Re slides 5% after profits blown off-course by hurricanes: German reinsurer Munich Re revealed that a series of powerful hurricanes in the U.S. and Caribbean last autumn had wiped 85% off its profits for 2017.
Citi touts industrial metals as haven from market sell-off: U.S. investment bank Citi has touted industrial metals such as zinc and copper as a potential haven from the turbulence rattling global markets.
GM’s forecast-beating results driven by U.S. and China: General Motors beat market expectations for fourth quarter and full year earnings because of a strong performance in the U.S. and China. Shares in the company rose 3.2% by midday trade in New York.
Boeing-Embraer focus on commercial unit tie-up: Boeing and Embraer have floated the idea of a joint venture in which the U.S. company could take a stake of up to 90% in the Brazilian aircraft maker’s commercial business, but that could exclude the sensitive military business to allay government concerns about sovereign defence capability.
Walt Disney earnings top expectations though sales fall shy: Walt Disney reported better than expected fourth quarter earnings even as revenue fell short of Wall Street’s estimates.
Los Angeles Times set to be sold to biotech billionaire: The biotechnology billionaire Patrick Soon-Shiong is close to purchasing the Los Angeles Times from the U.S. publisher Tronc, according to people familiar with the matter.
Higher prices, tax gain beef up Chipotle profit: Chipotle’s quarterly profit more than doubled from a year ago after the fast-casual burrito chain reaped the benefits of higher menu prices and recently enacted U.S. tax reform.
Japan Tobacco drops 3% on weak profit, sales outlook: Japan Tobacco dropped as much as 3% on Wednesday, despite buoyant investor sentiment in Tokyo, after the cigarette group forecast operating profit would remain flat in 2018 as sales in Japan continued to decline.
Steve Wynn steps down as head of Wynn Resorts: Steve Wynn has resigned as Chief Executive and Chairman of Wynn Resorts, the company announced on Wednesday, the latest fallout from sexual harassment allegations against the casino tycoon.
Lex:
Snap: panda-monium: Internet companies cannot cut their way to profitability.
Icahn/SanRidge: low energy: Carl Icahn wants a new Boss but probably not on these terms.
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Intesa Sanpaolo: flowering: Bank’s business plan promises economic renaissance but may yet deliver a masterpiece.
Lombard:
Ocado tastes like Marmite to long-term tech investors: Retailer’s potential revenue growth will appeal to a certain investment palate.
The Daily Telegraph
Snapchat owner’s shares pop as user growth picks up: Shares in Snapchat’s parent company skyrocketed on Tuesday night as it surpassed revenue expectations, a welcome relief for the messaging app after a trying first year on Wall Street.
EU regulators to assess Apple’s purchase of British music app Shazam: European regulators will assess Apple’s takeover of British song-recognition app Shazam, after seven countries argued the deal could limit competition.
Stagecoach shares plunge as Boss hits out at ‘misleading’ East Coast comments: Stagecoach’s shares hit a nearly nine-year low as its Chief Executive railed against “misleading” comments about the premature demise of its control of the East Coast mainline.
The Questor Column:
Questor: hold Shell – the generous dividend is starting to look much more sustainable: Royal Dutch Shell’s fourth quarter and full year 2017 results, announced last week, appear to allay any fears over the safety of the $1.88-per-share dividend, which equates to a 5.4% yield for 2018. Further share price advances in the near term may now depend on the oil price, which may be due a pause for breath after its own gains, especially as speculative buys of crude from fund managers rather than industry operators stand at record highs in the futures market. On the basis of the stated 2017 earnings per share figure of $1.58 the dividend was not covered by profits, and the consensus forecast from analysts of around $2.01 for 2018 earnings per share means dividend cover looks thin even then at around 1.07 times, when a figure of around two would give much more reassurance. However, Shell’s cost cuts and efficiency programmes mean that cash flow is now much stronger. In 2017 free cash flow more than covered the dividend even when the average price that Shell received for its oil was $49, not the $68 on offer today, even once those important expenses had been met. This explains why the company now feels able to abandon paying some of its dividend, which comes to around $3.9 billion a quarter or $15.6 billion a year, in shares (or “scrip”). All dividends will now be paid in cash. Questor says “Hold”.
Update: Connect: This column last looked at Connect, the specialist distributor, early last month and we struck an optimistic tone: the proposed sale of the books division, planned further debt reductions and a cost-cutting programme all appeared to underpin the dividend. Unfortunately, a trading update in late January unstitched a lot of that theory. The books sale has fallen through, at least to the putative German buyer, and the parcels business is taking longer to turn around than planned. As a result, analysts cut their profit forecasts by more than 10%. The tempting forecast dividend of 10p a share (which equates to a 13.4% prospective yield) is covered 1.3 times by earnings per share, while free cash flow more than covers the dividend too: forecast earnings before interest, depreciation and amortisation of £59 million, less interest of £6 million, less tax of £8 million and capital investment of £13 million, still leaves £32 million. In addition, there is little debt, interest cover is good and the firm is well managed. The problem is that earnings per share peaked in 2013, operating profits are now expected to drop for a third straight year and cash flow for a second. As a result, cash flow cover of the dividend is getting tighter. Income seekers may well wish to tough it out, especially if they are looking for dividends to match any cash needs they have, since Connect appears to be firmly committed to the payout. The chances of capital gains, however, seem slim, since the forward price to earnings ratio (p/e) of 5 is less than half the forecast yield and that is the market’s way of saying it does not believe the profit estimates. Questor says “Sell”.
The Guardian
SpaceX: Elon Musk seeks to revive Apollo era with Falcon Heavy rocket test: The most powerful rocket to leave Earth in a generation is set for its maiden flight from Florida on Tuesday, its whimsical payload lending a touch of showmanship to a pioneering test mission that could have significant implications for the future of deep space exploration.
Network Rail Boss Mark Carne to step down this year: The head of Network Rail is to step down later this year, with his position having come under increased pressure from government.
Daily Mail
Chinese tech giant Huawei to invest £3 billion in the U.K. after Theresa May meets with its Chairman: China’s biggest smartphone supplier Huawei Technologies will invest £3 billion in the U.K. following a meeting between the firm’s Chairman Sun Yafang and Prime Minister Theresa May.
Carillion Bosses blame everyone but themselves… the next step should be a proper trial: Watching the former Carillion Directors explain themselves yesterday in their first public outing since the construction and outsourcing giant collapsed was toe-curling.
Brewdog to open brewery in Australia as value of Scottish craft beer maker reaches £1 billion in just over ten years: Brewdog is opening a brewery in Australia as it continues an expansion which has seen its price tag reach £1 billion in just over ten years.
Sandwich chain Eat to axe restaurants as it deals with pressures from rivals Pret A Manger, Itsu and Leon: Eat is considering axing a number of restaurants as it deals with pressures from rivals like Pret A Manger, Itsu and Leon.
Hollywood Bowl Chief exec Stephen Burns handed £250k in shares: Hollywood Bowl Group’s Boss was handed shares worth more than £250,000 yesterday. As part of a long-term incentive plan, Stephen Burns was awarded 130,256 shares.
Daily Express
Draghi calls out bitcoin as ‘high risk’ investment: THE President of the European Central Bank (ECB) has warned banks about the dangers of cryptocurrencies as he branded bitcoin a “high risk” investment.
World stock market collapse – the day the world lost $4 trillion as stocks plunge: As the opening bell rang on Wall Street today, stock markets across the world were already reeling from a third day of chaotic trading which saw markets in Asia and Europe suffer dramatic losses.
The Scottish Herald
Scottish Friendly sales rise to fresh record: Glasgow-based mutual Scottish Friendly has unveiled a surge in sales to a fresh record in 2017 and expressed confidence in its prospects for this year in spite of Brexit uncertainty and pressure on household finances.
Mone and Barrowman launch new online investment scheme using crypto-currency technology: Michelle Mone aims to launch a venture capital scheme using the technology of a controversial crypto-currency.
The Scotsman
RBS announces stay of execution for 10 local branches: RBS has announced that 10 of its branches in rural Scotland are to be given a stay of execution and will remain open until at least the end of the year.
City A.M.
Ryanair’s perception climbs again after winter turbulence: Ryanair has posted a 12% rise in profits after tax in the three months to December. YouGov brand tracking data indicates that following its difficulties in early autumn, the airline’s impression score (whether someone has a positive impression of the brand) dropped from negative 31 to negative 52 among the general public.
Warren Evans becomes latest casualty on the high street as it falls into administration: Warren Evans has become the latest U.K. retailer to fall into administration, underscoring the considerable pressures being felt by the industry.
New Look’s sales plunge on heavy discounting: New Look’s sales plunged in the third quarter after the chain offered heavy discounts to shoppers. For the 39 weeks ended 23 December, total group revenue slumped 6.3% to £1.1 billion. This represented a like-for-like sales fall of 10.6%. Website sales plunged 15%.
