Brexit stumbling blocks
Theresa May was in talks with European Commission president Jean-Claude Juncker aiming to finalise the UK’s exit package from the EU at the time of going to press, seeking to overcome differences over Gibraltar, fishing rights and goods trade. Sticking points during talks on the political declaration accompanying the UK’s withdrawal treaty included whether Gibraltar should be covered in the text, with Spain threatening to veto any package unless it is made clear that the territory will be excluded from any future trade agreement. The UK parliament is provisionally scheduled to vote on the deal around 11 December.
Renault chief arrested
Misconduct accusations
Renault chief executive and chairman Carlos Ghosn was arrested on accusations of misconduct at the automotive manufacturer’s Japanese alliance partner Nissan. Mr Ghosn was arrested after an internal investigation at Nissan revealed what the Japanese carmaker called “significant acts of misconduct”, including misleading investors about the size of his salary. Mr Ghosn – who is also chairman at Nissan and Mitsubishi Motors – was replaced as chief executive at Renault on an interim basis by chief operating officer Thierry Bollore, while lead independent director Philippe Lagayette will act as chairman.
Patent wars
Opioid dispute
Indivior (INDV) was dealt yet another blow after news emerged that the group had lost a Federal Appeals Court ruling, which might allow for an imminent launch of a cheaper, rival version of opioid addiction treatment Suboxone Film. Indivior said it was reviewing the ruling and confirmed it would file for a rehearing at the Court of Appeals for the Federal Circuit. Indian group Dr Reddy’s is preparing to launch a copycat version of Suboxone, which could damage Indivior’s market share by as much as 80 per cent. For now, management guidance remains intact until Dr Reddy’s drug hits the market.
FRC probes Patisserie
Audits reviewed
The Financial Reporting Council (FRC) announced an investigation into the audits of Patisserie Valerie, after the café chain said it had discovered “significant, and potentially fraudulent” accounting irregularities in October. The findings prompted the suspension of former chief financial officer Chris Marsh and resignation of chief executive Paul May. The FRC said it would probe the audits by Grant Thornton of the financial statements of Patisserie Holdings for the 2015, 2016 and 2017 financial years, as well as the preparation of the group’s financial statements and other information by Mr Marsh.
Johnston's pension challenge
PPF concerned
Johnston Press ended its formal sales process after failing to receive an offer that would “deliver sufficient value”. After filing for administration, the media group was sold to a newly incorporated group of companies controlled by its bondholders. The group – which owns titles including i and The Scotsman – said the pre-pack administration deal would preserve jobs and ensure Johnston’s businesses continued as normal. However, the Pension Protection Fund said it had “concerns” around the circumstances of the deal, an insolvency procedure that allows business to be sold without liabilities, such as pension debt.
Risers and fallers (%)
| BTG | +24.92 |
| Spectris | +16.79 |
| Circassia Pharmaceuticals | +13.92 |
| Centamin | +13.27 |
| Acacia Mining | +12.51 |
| Indivior | -50.02 |
| Kcom | -31.53 |
| Allied Minds | -22.74 |
| CYBG | -22.7 |
| Premier Oil | -19.44 |
Week to 21 November 2018
Borrowing climbs
Three-year high
Government borrowing was ahead of analyst expectations in October, rising to £8.8bn from £7.2bn at the same time last year – the largest figure for that month in three years. That was also above the £6.15bn forecast by economists in a poll by Thomson Reuters, according to the Office for National Statistics. Government spending rose by 7.7 per cent – above the 2.6 per cent growth during the fiscal year to date – while tax receipts were only 1.2 per cent higher than last year, down on the 4.3 per cent increase since April.
KCom cuts dividend
Profit disappointment
Shares in KCom (KCOM) plunged 40 per cent on the day management cut profit guidance for the year to March 2019 and slashed the annual dividend by half to 6p a share. Ongoing customer churn within its national network services business forced management to impair the carrying value of goodwill, taking a £32.2m non-cash exceptional item in its upcoming interim results. Overall, management expects pre-IFRS 15 cash profits to March to be around 5 per cent below current market expectations and significantly below expectations for the year to March 2020.
