Ryanair overhauled
Controversial Ryanair (RYA) boss Michael O'Leary announced plans to step down as chief executive of the airline, as it reported a pre-tax loss of €22m (£19m) for the final three months of 2018 from a €113m profit the year before. Mr O'Leary will remain as the head of the group’s holding structure for a further five years, as the airline announced plans to move to an arrangement “not dissimilar to that of IAG”, with a small management team overseeing Ryanair, Laudamotion, Ryanair Sun and Ryanair UK. Chairman David Bonderman also announced plans to step down in 2020.
Circumspection reigns
Services slow
UK service sector activity slowed to its lowest level in six years in January, as businesses delayed spending decisions. The IHS Markit survey slipped to 50.1 – with any reading below 50 representing a contraction in activity – down from 51.2 in December, while new orders fell for the first time in two and a half years. The news follows a weaker-than-expected reading from the manufacturing and construction sectors in January, with a composite index that tracks all three segments falling to 50.3, from 51.2 in December.
HMV reprieve
Canadian buyer
HMV was bought out of administration by a company owned by Canadian music retailer Sunrise Records. The new company will acquire 100 HMV stores, along with four stores continuing to trade as Fopp, with 1,487 employees transferring as part of the purchase. However, a total of 27 shops will close with immediate effect, including the historic retailer’s flagship store on London’s Oxford Street, resulting in 455 redundancies. Sunrise bought 70 HMV stores in Canada in 2017 from then-owner Hilco, which also owned the UK business until it went into administration for the second time in December.
Ocado blaze
Capacity concerns
On the same day as it released preliminary results to the market, a fire broke out at Ocado’s (OCDO) fulfilment centre in Andover. A company spokesperson said the fire had not been as well contained as previously thought. During the night, part of the roof collapsed, while there is “substantial damage to most of the building and its contents”. No staff or member of the public have been injured, but it remains to be seen when the centre will return to operation. The site accounts for roughly 10 per cent of the group’s current capacity, and sales growth will be curtailed as a result, or at least until the company can up capacity elsewhere.
Unkind markets
Brokers suffer
Numis (NUM) is a natural victim of the UK’s fluctuating equity markets. The brokerage reported that a decline in UK markets and an uncertain political backdrop meant corporate broking and advisory business during the first four months of the year was lower than in the same period in the prior year. Average deal fees remained the same but volumes were down by around a quarter, while income from institutional investors on the equities trading-side reduced by the same proportion.
Risers and fallers (%)
| GULF MARINE SERVICES | 22.7 |
| RPS GROUP | 21.56 |
| LONMIN | 20.06 |
| CONSORT MEDICAL | 14.94 |
| KAINOS GROUP | 14.75 |
| THOMAS COOK GROUP | -19.8 |
| AO WORLD | -11.83 |
| MCCOLL'S RETAIL GP. | -11.48 |
| RENEWI | -11.39 |
| INDIVIOR | -10.72 |
Week to 5 February 2019
Gross de-throned
Client sentiment turns
Former 'bond king’ Bill Gross announced plans to retire from Janus Henderson, after five years at the helm of the asset manager’s Global Unconstrained Fund, amid client withdrawals and weak performance. Funds under management stood at below $1bn at the end of December, down from a peak of $2.2bn. In 2017 Mr Gross settled a lawsuit with Pimco, the fixed income-focused investment group he co-founded in 1971, claiming he was owed $200m in bonuses and back pay following an acrimonious split with the group in 2014. He eventually received $81m.
Fighting talk
Generic battle
Another day, another legal setback for opioid addiction specialist Indivior (INDV). The US Federal Court of Appeal (CAFC) rejected the company’s request for another hearing on whether its patents were infringed by a cheaper copy of the drug, developed by Indian pharma group Dr Reddy’s Laboratories. Indivior was appealing a previous decision made by a Delaware court to allow the cheaper drug to enter the market. This latest decision effectively ratifies the state court’s verdict. In response, Indivior has filed an emergency injunction to halt the decision, which comes into force on 11 February.
