Boeing grounds 737 Max
Boeing grounded its 371-strong global fleet of 737 Max aircraft, bowing to pressure from aviation regulators around the world after an Ethiopian Airlines flight crashed on Sunday, killing all 157 passengers and crew. It was the second 737 Max to crash in five months. The move followed the Federal Aviation Administration’s (FAA) order to ground the planes. The FAA had initially refused to follow its counterparts in China, Singapore and the UK in banning the planes. Boeing “continues to have full confidence in the safety of the 737 Max”, it said, but had recommended grounding the fleet “out of an abundance of caution and in order to reassure the flying public of the aircraft’s safety”.
Trading restarted
Underpayment allegations
Staffline (STAF), which had been suspended from trading on the junior market since the end of January, resumed this week and clarified the reasons for its suspension. A third party made allegations to the group’s auditors about its recruitment division’s payroll and invoicing practices, prompting a review. One allegation concerned underpayments to workers under minimum wage regulations, and the group has taken a provision totalling around £7.9m to cover costs. Investors reacted well to the news, sending the shares up by a quarter on the day they recommenced trading.
Mothercare offloads ECL
Store closures climb
Beleagured baby chain Mothercare (MTC) announced it was making headway with its turnaround plan, which includes disposing of the Early Learning Centre to TEAL brands for £13.5m. Of this, £6m is due on completion of the disposal, with up to £5.5m in respect of inventory due within a few months thereafter and a further £2m in earn-out fees over the next two years. The group said the deal will help it move closer to becoming debt free. So far, Mothercare has closed a slew of stores – a number which could reach 137 by May – aiming to leave an estate of just 80.
Partnership disbanded
Skeoch remains at top
Standard Life Aberdeen (SLA) co-chief executive Martin Gilbert stepped down from his role in the unorthodox partnership with immediate effect, as the asset manager reported rising net outflows from its funds. The co-founder of Aberdeen Asset Management has become vice chairman of the group and chairman of the investment arm, while Keith Skeoch has been appointed sole chief executive. The asset manager – formed via a 2017 merger – revealed £40.9bn in net outflows for 2018, up from £32.9bn in 2017. In his new role, Mr Gilbert will “focus solely on our strategic relationships with key clients, winning new business and realising the potential from our global network and product capabilities”, the board said.
Risers and fallers (%)
| SPORTECH | +11.28 |
| IWG | +12 |
| MCCOLL'S RETAIL GP. | +14.04 |
| ULTRA ELECTRONICS HDG. | +17.83 |
| ALFA FINANCIAL SOFTWARE HOLDINGS(WI) | +26.78 |
| CAIRN ENERGY | -20.75 |
| GVC HOLDINGS | -18.51 |
| ALLIED MINDS | -18.37 |
| ENQUEST | -16.39 |
| KIER GROUP | -16.37 |
Week to 12 March 2019
Barrick/Newmont make-up
Agree JV
Barrick Gold dropped its $18bn (£13.6bn) hostile takeover bid for Newmont Mining after agreeing a deal to combine its Nevada operations. The joint venture business – in which Barrick will take a 61.5 per cent stake – will become the largest global gold producer, with 4.1m ounces of annual production. Newmont had formally rejected Barrick’s bid earlier in March and had also ruled out a joint venture in which Barrick would take a 55 per cent stake, which was dismissed by Barrick chief executive Mark Bristow. However, the about-turn followed public support for a tie-up from top five shareholder in both groups, Flossbach von Storch.
UK stalls
Manufacturing weak
UK economic growth during the first three months of the year was flat on the prior quarter at 0.2 per cent, according to data from the Office for National Statistics. “Across the latest three months, growth remained weak with falls in manufacture of metal products, cars and construction repair work all dampening growth,” said head of GDP at the ONS, Rob Kent-Smith. Car manufacturing has been particularly badly affected by a slowdown in global growth, with falling sales in China and the ongoing effects of the diesel emissions scandal.
Spotify vs Apple
Streaming wars
Spotify has filed an EU antitrust complaint against Apple’s App Store, alleging that the iPhone maker had behaved unlawfully and abused its App Store dominance to favour Apple’s streaming service. Apple recently overtook Spotify as the top paid music streaming service in the US. Spotify chief executive Daniel Ek wrote in a blog post: “In recent years Apple has introduced rules to purposely limit choice and stifle innovation at the expense of the user experience.”
