The Times
Booths, the ‘Waitrose of the north’, opens up: For five generations, the “Waitrose of the north” has been owned and managed by its founding family. However, Booths, an upmarket purveyor of farm-fresh produce, has broken with tradition by appointing an outsider as Chief Executive.
Greek shares and bonds dumped despite forecast of strong growth: An official forecast that Greece would be one of the fastest-growing economies in Europe next year did nothing to placate anxious investors, who dumped Greek shares and sovereign bonds as the crisis in the country showed signs of deepening.
Standard Chartered may opt for shares payout: Standard Chartered could hand out shares rather than cash when it comes to pay its full year dividend.
DFS takes the comfy seat as it plots float: DFS is expected to push the button on plans for a stock market flotation and has lined up a top-level board of Directors to help to run Britain’s second-largest furniture chain.
Smart money is on further Next special dividends: Next has had to suspend its programme of share buybacks this year and pay the cash directly to shareholders as it becomes a victim of its own success and rising share price.
Neil Woodford backs veteran lender’s new subprime plan: A veteran doorstep lending Executive is seeking £100 million for a new venture targeted at subprime borrowers and has signed up Neil Woodford, the highly regarded stockpicker, as a cornerstone investor.
Smith & Nephew wins on sporting injuries: Football, basketball and skiing accidents are proving a boon for Smith & Nephew which pinpointed sports medicine as a big opportunity after a surge in sales of devices that repair damaged joints and ligaments.
Pfizer launches year of acquisitions with $17 billion deal: Pfizer is spending $17 billion on a maker of copycat injectable drugs in its first substantial deal since it failed to acquire AstraZeneca.
The Independent
Trading pits to fall silent this summer: The Owner of many of America’s oldest financial markets has called time on the raucous “open outcry” trading pits that were at the heart of the American economic boom through much of the 20th century.
Twitter user growth slows again: Twitter, the social media platform, continued its recent pattern of reporting stronger than expected revenue and profits but lower than expected user number. The San Francisco-based company has reported similar results in the last three quarters, leaving some analysts to ponder if its days of exponential growth are over.
Greece and Germany cannot even agree to disagree over bailout terms: Greece and Germany clashed over austerity measures in frank exchanges as shares in Greek banks were shaken by the threat of losing crucial billions in funding from the European Central Bank (ECB).
Vodafone Boss issues warning over BT mobile takeover: Vodafone’s Chief Executive Vittorio Colao warned that BT’s £12.5 billion takeover of the mobile giant EE would have to be policed closely by regulators to ensure fair play for rivals.
Financial Times
Pan-European digital current account launched: A new type of digital current account has launched to make transacting money across Europe more efficient as the sector faces mounting criticism for lacking innovation and competition.
Ball in talks with Rexam over £4.29 billion bid: Ball Corporation of the U.S. is in talks to buy Rexam, the U.K.-based drinks can manufacturer, in a £4.29 billion deal that would create a powerhouse in the production of cans for beverages including soft drinks and beer.
London tech investors look to mirror success of Silicon Valley: More than $2 billion has been raised by new technology funds in London in the past five years, as venture capital flows into Europe’s burgeoning start-up scene.
Venture capital funds sprout amid rush to invest in London tech: After Connect Ventures, a technology-focused venture capital fund, was founded in 2012, its partners struggled to find offices in their preferred east London. Start-ups were springing up so quickly in the area that demand for workspace was fierce.
Dairy Crest upbeat despite milk market woes: Dairy Crest sold enough flavoured milkshakes and cheddar cheese to weather the storm of plunging milk prices, which battered its poorly performing dairy operations in the third quarter.
Brazilian judge freezes Batista family assets: A Brazilian judge has frozen the assets of Eike Batista and his family as part of a landmark insider trading trial that could put the country’s former richest man in jail, according to court documents seen by the Financial Times.
LSE to sell Russell asset management unit: The London Stock Exchange Group confirmed that it is to sell the asset management business it acquired as part of its $2.7 billion purchase of Russell Investments, the index provider.
Interpublic agrees to board shake-up: Interpublic Group has reached a settlement with Elliott Management, the activist hedge fund, to reshuffle the advertising company’s board as it seeks to boost its financial performance.
Daimler signals dividend rise with ‘significant’ profit growth: Daimler plans to reward shareholders with a dividend increase and has forecast “significant” profit growth in 2015.
ABB fears global slowdown and oil hit: Swiss engineering group ABB says 2015 will be another tough year as sluggish global growth and falling oil prices hit its order book.
Pandora shares tumble as it cuts forecasts: Investors tuned out of Pandora after a pullback in holiday advertising caused the internet radio company to miss revenue targets, and its 2015 sales forecast came in below analysts’ estimates.
Amy Pascal steps down from Sony Pictures: Amy Pascal, whose embarrassing emails were leaked online in the damaging hack of Sony Pictures, is stepping down from her role as co-Chairman of the movie studio.
GoPro boosted by bumper holiday sales: GoPro leapt over Wall Street’s highest forecasts for its fourth quarter, with revenues of $634 million and earnings of 96 cents, after bumper holiday sales of its action cameras.
Sprint starts to stem loss of subscribers: Sprint, the third-largest U.S. wireless carrier, posted a quarterly loss of $2.4 billion in the final three months of last year, although it dramatically slowed the rate at which it was losing customers.
Vodafone’s 4G service helps arrest slide in revenues: Vodafone almost reversed a long-term slide in revenues in the third quarter on the back of the voracious appetite for videos and social media using smartphones on its superfast 4G networks.
Lex:
Twitter: cruising altitude: With its latest quarterly numbers, Twitter delivered a graphic demonstration of how a business built on those terms could play out. Engagement — measured by the number of timeline views per monthly active user — turned up for the first time in five quarters. Users were not put off by an increase in ads. With a 10% improvement in pricing, ad revenue for each timeline view went up 60%. All of this will come as a relief to investors made wary by recent turmoil in Twitter’s management ranks. The trouble is, the company’s heady valuation can be justified only on the assumption that its user base will grow enormously — a view current management has set a high store by, whatever Mr Williams says. On that measure, the 4 million net new monthly users added in the fourth quarter was a let-down, even allowing for some technical headwinds. Twitter management promises a return to normal growth in coming quarters. Investors swept up by the enthusiasm around the latest earnings had better hope they are right.
AstraZeneca / Sanofi: inversion: AstraZeneca clocked in with a 3% rise in sales for the year but — even excluding a pile of one-off costs — net profit was down 8%. It told investors to expect falling sales, and modest earnings growth, in 2015. This excludes the impact of currency which, at the pound’s current level, will probably worsen the sales decline and wipe out the earnings growth. Then there is Sanofi, which expanded sales by 5% and earnings by 7%, and also sees modest earnings growth this year — but, at the current level of the euro, will receive a currency boost. Analysts expect Sanofi’s growth to accelerate in 2016 and 2017; it has a diverse portfolio with slow, consistent growers such as insulin; hard to copy treatments for rare diseases; and vaccines. Analysts expect declines in revenues and profits in those years at AstraZeneca, which will face generic competition for U.S. Nexium (7% of total sales) imminently, and for U.S. Crestor (11% of sales) next year. The other explanation is that AstraZeneca’s growth will be strong a few years further out. This depends on the immuno-oncology drugs in its pipeline selling as well as it hopes. No drug class creates more excitement. Roche, Bristol-Myers Squibb and Merck are also active in the space.
Pfizer: only in America: The earnings outlook that Pfizer shared last week highlighted its biggest challenge. Revenues will fall this year, while earnings per share will stay roughly flay because of deep cost cuts and share buybacks. The company churns out a whopping $90 billion in annual revenue. How can such a monster grow — and so attract a better valuation? Pfizer is considering mitosis. It will spend a ridiculous $400 million in 2015 exploring putting its higher-growth units into new company. Hospira would fit into Pfizer’s low-growth segment (“Global Established Pharmaceutical”). The generic injectable marketplace is growing 10% a year and should reach a market size of $70 billion by 2020. Hospira’s other area is biosimilars, therapies that replicate biological (as opposed to traditional chemical) drugs. Biosimilars are a small business, but Pfizer estimates the market could reach $20 billion by 2020. The growth that Hospira brings could make Pfizer’s Established segment more attractive as a standalone company. Hospira does not come cheap. The $90 per share price is three times the price of two years ago. But this deal may not be the end of the story — and AstraZeneca might not have been the last word on Pfizer’s efforts to avoid U.S. taxes. AstraZeneca is off the table; a foreign address may not be. If a spin-off is completed, the smaller Pfizer units would be more digestible to an international buyer — or could invert into a smaller international target.
Lombard:
Can-do Rexam should run with the Ball — straight off the stock market: It will be the same for Rexam, if it is bought for a mooted £4.3 billion by U.S. rival Ball. The drinks-can maker has been a stalwart member of the FTSE 350 for years. But a solid performance means that the City would feel guiltily relieved to see it go. Like Mr Brickowski, Rexam’s business model is composed of a few basic components. It buys aluminium. It makes it into cans. It sells the cans to companies such as Coca-Cola. Profits are expected to drift lower. Many investors would happily sell to Ball at a mooted 610p per share. That would be 40% above recent levels. Ball would be buying at an enterprise value multiple slightly below its own, at 9.4 times. The scale of the two businesses and the current composition of the offer suggests Ball may not be planning a lucrative but politically-vulnerable tax inversion. If not, 610p is a generous price that should have Rexam shareholders singing the Lego Movie’s theme song “Everything is Awesome”. To make the most of its outlay, Ball would need to exhibit greater dealmaking steel when agreeing disposals with antitrust regulators than Rexam has when haggling with suppliers.
Ride a white swan: Swashbuckling Chief Executive Gavin Patterson tickled their tummies with synergy estimates of £3.5 billion on costs and, less reliably, £1.6 billion on revenues. The deal will not, in the jargon, “be accretive to earnings” until its second year. That is a way of saying it is no bargain. Unusually, a guarantee would compensate EE’s Owners Deutsche Telekom and Orange from a 4% drop in the BT shares that are the main deal currency, by increasing the cash payment from £3.4 billion. BT is determined to protect its credit rating — net debt will be manageable at 1.4 times earnings after the deal. The concomitant is a hefty 20% expansion of equity capital. Full repayment of a whopping £7 billion pension deficit was recently extended by six years to 2030. EE is more costly than it at first appears. BT can bear the strain. Mr Patterson has gained investors’ confidence. Now he must justify it.
The Daily Telegraph
Greece pleads with Berlin for time and money to re-write debt deal: Greece’s finance Minister pleaded for his country to be given time and money to negotiate a new debt deal with its creditors, after the European Central Bank sought to pull the carpet from under the feet of the country’s stricken banks.
Wonga avoids criminal investigation over fake letters: The City of London Police has ruled out opening a criminal investigation into Wonga after concluding that the payday lender’s fake letter scandal was not a case of fraud.
Vodafone calls on Three to cut ties with EE to curb BT: Vodafone has urged Hutchison Whampoa, the Owner of Three, to pull out of a network-sharing joint venture with EE to curb BT’s growing power.
Songbird Estates shareholders back £2.6 billion Canary Wharf takeover: Qatar has declared victory in its battle for Canary Wharf after its £2.6 billion takeover of Songbird Estates was backed by enough shareholders to clear the deal.
AstraZeneca unveils $600 million Actavis deal as full year results disappoint: AstraZeneca Boss Pascal Soriot appealed for investor patience after the company posted lower-than-expected revenues and earnings for the final quarter of the year, but bolstered its portfolio with a new deal.
Former City Minister Mark Hoban to join the London Stock Exchange: Mark Hoban, the former City Minister, has lined up a non-Executive job at the London Stock Exchange as he prepares to leave Westminster.
House prices bounce back – but for how long?: U.K. house prices rose 2% to £193,130 from December to January, the strongest monthly growth rate for eight months, according to new data from the Halifax.
‘Boris bikes’ set to be painted red under Santander deal: London’s fleet of blue “Boris Bikes” could be painted in the red and white of Santander, with the bank apparently close to winning the sponsorship deal from Barclays.
Help-to-Buy 2 shaves six years off first-time buyer age of 37: A government initiative aimed at getting first-time buyers on the property ladder has shaved six years off the age at which people can afford their first home.
The Questor Column:
Victrex has solid start: Victrex is a British engineering group benefiting from strong demand for its unique polymer products across the world. The FTSE 250 manufacturer, which has enjoyed a solid start to the new financial year, has developed a lightweight thermoplastic called “Peek”. The material, which is resistant to extreme temperatures and chemicals, is being used to replace metal parts in aeroplanes such as the new Boeing 787, brake pads in cars and components in smartphones and medical implants. The driving force behind the company’s recent expansion has been a strong automotive and aerospace market, as manufacturers transfer from metal to Peek products. The new financial year has started well, with sales for the three months to the end of December jumping 42% to 967 tonnes, when compared with the same period a year earlier. Year-on-year revenue in its first financial quarter was up 14% to £59.8 million when compared with a year earlier. Victrex will benefit from a weaker pound as 97% of the products are exported, and more favourable currency movements will boost profits. The balance sheet is in a strong position and the company is highly cash generative. The only problem is that the shares, trading on 21 times forecast earnings, already price in much of this good news. Victrex at £20.92-16p. Questor Says “Hold”.
Wincanton on the road to recovery: Small-cap haulier Wincanton has been enjoying a steady turnaround that has seen the shares gain almost 18% during the past six months. That said, the company remains on target to hit market expectations for full year pretax profits of £27.7 million, giving earnings per share of 17.9p, on revenue of £1.1 billion. The haulage and logistics group is well diversified, with 12% of sales coming from construction, 13% from petrol tankers, 15% fast-moving consumer goods, 25% groceries, 25% general merchandise. The balance comes from other haulage. Wincanton’s shares are up 21% since we recommended buying last year (Buy, 138.75p, July 19), and trading on 10 times forecast earnings, they remain good value. Both companies are logistics operations with revenue of about £1 billion, and both manage large fleets of vehicles to transport goods from A to B. Applying Ocado’s valuation multiple to Wincanton’s forecast earnings would increase the company’s vlaue from about £200 million to £2 billion. Questor thinks one of these valuations is closer to reality and would rather buy the cheaper option at Wincanton, and hold the shares for the long term and wait for the steady profit recovery. Wincanton at 172p-6.9p. Questor Says “Buy”.
AstraZeneca remains solid long term investment: was disappointing for AstraZeneca. Sales and profits were below expectations, though crucially the cashflow was strong and the dividend was maintained. What’s more, as the dollar has strengthened against the pound then dividends paid to U.K. investors will get a boost this year. Core operating profits – a measure which strips out one-off costs such as acquisitions – were even further from the mark at $1.18 billion for the last three months of the year, down 20% from the $1.48 billion that had been expected, and 40% below the $1.98 billion a year earlier. There were also some disappointing results from the sales of key drugs in the fourth quarter. AstraZeneca said that sales of blockbuster cholesterol treatment Crestor were down 5% in the last three months of 2014, an acceleration on the 2% fall in sales during the full year. Sales of Crestor make up a fifth of total sales at AstraZeneca. To get new drugs through the approval process AstraZeneca increased spending on research and design for the full year to $5.6 billion, up 21% on 2013. Launching new drugs also meant increasing annual marketing and advertising costs to $13 billion, up 50% on a year earlier. AstraZeneca remains a solid long-term investment. The company fought off a takeover attempt from U.S. rival Pfizer last year and this underlines the potential in an attractive cancer drug portfolio that will come to market during the next five years. The shares are trading on 17 times forecast earnings, which is a 15% discount to European rivals Novartis and Roche. The shares offer a prospective dividend of 3.8% and remain a hold for the long term. AstraZeneca at £45.29-159p. Questor Says “Hold”.
The Guardian
Greek and German finance Ministers clash at debt relief talks: Greece’s radical Syriza government remained locked in a bitter standoff with its German paymasters, as finance Minister Yanis Varoufakis issued a stark warning of the rise of Nazism in his country if the Eurozone fails to heed the democratic voice of Greek voters.
Ireland retains crown as fastest-growing EU economy: Ireland’s tiger economy roared back to life last year and will retain its crown in 2015 as the fastest growing in the EU, according to Brussels’ latest forecasts.
Travelodge books in for £1.3 billion expansion: Budget hotel chain Travelodge is planning to capitalise on the U.K.’s growing appetite for cheap stayovers with a £1.3 billion expansion programme this year that will target 205 new hotel sites, mostly in London and the south-east.
George Osborne needlessly shrank 5% off GDP with 2010 cuts, says thinktank: George Osborne “took a large risk with the economy” when he imposed deep spending cuts in 2010, and the resulting slowdown may have cost 5% of GDP, or £1,500 for every man, woman and child in Britain, according to a new analysis of the coalition’s record by the National Institute of Economic and Social Research.
British motorists drive off austerity with bumper new car sales: Britain has had some difficult economic years: austerity has bitten, wages have slumped, and home Ownership has become a dream for many – but new cars have been flying off the forecourts.
Dismissed Woolworths and Ethel Austin staff look set to lose compensation fight: Nearly 3,500 former employees of Woolworths and Ethel Austin look likely to lose their battle for compensation after a ruling at the European court of justice.
Daily Mail
Europe at ‘critical juncture’ and faces prolonged period of stagnation and deflation unless millions of jobs are created: Europe is at a ‘critical juncture’ and faces a prolonged period of stagnation and deflation unless millions of jobs are created, according to a report from Brussels.
Vodafone vows to become more aggressive in drive to sell broadband to British households: Vodafone has vowed to become more aggressive in its drive to sell broadband to British households. The mobile group is planning to unveil its internet and TV services later this year, in a bid to avoid being left behind by rivals such as the tie-up by BT and EE, and Sky starting to sell mobile through the O2 network.
Asda Boss Andy Clarke believes Tesco is still a major force in supermarket sector: The strength of a wounded Tesco should not be underestimated, the Boss of rival Asda warned as a wide-ranging probe into the embattled grocer’s relationship with suppliers was launched.
Michael Kors raises concerns that company has fallen out of fashion after sales slowdown: Michael Kors, the American brand that sells a ‘jet-set’ style to the masses with £180 jumpsuits and £300 handbags, raised concerns that it had fallen out of fashion in its home market when it reported a sales slowdown.
Daily Express
Things are starting to look up for Britain’s growth prospects: Britain’s growth prospects brightened as evidence emerged that the dominant services sector is hiring staff at near-record rates to cope with new business.
Customers are reaching for the Sky with broadcaster reporting profit rise: SKY flexed its financial muscle ahead of the imminent auction for Premier League football rights with a 16% rise in half year operating profit as it signed up customers in the U.K. and Ireland at the fastest rate in nine years.
The Scottish Herald
Accountancy firm PwC accused of promoting tax avoidance: The U.K. Government has been called on to take urgent action after MPs accused one of the U.K.’s largest accountancy firms of promoting “tax avoidance on an industrial scale” to several multinational companies.
Keith Miller to leave Miller Group: Keith Miller is to step down as Chief Executive of Miller Group by the end of March after leading the business for more than 20 years.
Interest rates held at record low: Interest rates were kept at their historic low of 0.5% as inflation’s recent weakness continues to reduce the near-term chances of a hike.
BT agrees £12.5 billion takeover of EE: BT raised the hope of cheaper deals for customers as it announced that it had agreed terms for a £12.5 billion takeover of EE, the U.K.’s biggest mobile operator.
The Scotsman
Tesco faces fresh probe into supplier ‘breaches’: Embattled retailer Tesco is facing an official investigation into its treatment of suppliers after an industry watchdog said there was “reasonable suspicion” the chain had breached the groceries supply code of practice.
Clydesdale Bank hits mortgage balance record: Residential mortgage lending balances at Clydesdale and Yorkshire Banks have passed the £19 billion milestone for the first time, the U.K. arm of National Australia Bank said.
Lord Livingston toasts whisky industry in Glasgow: Trade and investment Minister Lord Livingston visited his native Glasgow to meet budding entrepreneurs and pay tribute to the Scotch whisky industry’s contribution to the U.K. economy.
Scottish car sales left trailing: Scotland’s car dealers were left in the slow lane last month as they suffered a fall in sales while U.K.-wide registrations motored ahead.
City A.M.
Virgin Active set for public listing in South Africa: Gym Chain Virgin Active has hired five banks in recent days to work on a public listing on the Johannesburg Stock Exchange.
Government selling down its green energy fund holding: The government is planning to wind down its stake in the renewables infrastructure fund Greencoat U.K. Wind, taking home up to £42 million in the process.
Analysts split on Premier League fallout for Sky: With bids for the Premier League’s TV rights in, analysts were split this week over the potential damage or lack thereof that either winning the same package of games or losing games to BT could have on Sky.
Property firm Grainger achieves sales growth despite electioneering building: Property management firm Grainger said despite the good start to the year, the company expects the months leading up to the election to result in a softer market on home sales as uncertainty weighs on market sentiment.
Near-doubling of gains at McBride sends shares higher: Shares in McBride surged as profits at the company almost doubled in the last six months of 2014
Singapore fund boosts stake in TV firm Nielsen: Singapore’s sovereign wealth fund GIC has increased its stake in data company Nielsen, and now holds five% of the firm’s common stock.
Tight mortgage rules squeeze the old and the self-employed: Mortgage brokers are increasingly struggling to find loans for home buyers with unusual requirements, thanks to tougher rules on lending quality, the Intermediary Mortgage Lenders Association (IMLA) warned.
Compass posts bullish start to year but warns on oil price fall: Compass Group, the world’s biggest catering firm, hailed a strong start to the new year after seeing a return to growth in Europe and Japan, but warned of the impact of falling oil prices.
