Fantastic plastic
Apple (US:AAPL) introduced ‘Apple Card’ – a “new kind of credit card”, produced with Goldman Sachs and MasterCard, which will be integrated into the Apple Wallet app on iPhone devices. The tech giant says its new product simplifies the credit card application process, eliminates fees and encourages customers to pay less interest while providing “a new level of privacy and security”. Other platforms launched at its keynote event include video subscription service ‘AppleTV+’ and news and magazine subscription service ‘Apple News+’.
Purdue pays up
Addiction centre created
Purdue Pharma, manufacturer of the opioid painkiller OxyContin, has reached a sizeable settlement with the state of Oklahoma. Purdue will contribute $102.5m (£77.64m) for the creation of the National Center for Addiction Studies and Treatment at Oklahoma State University, and will also donate $20m of medicines. The group, whose agreement with Oklahoma “resolves all of the state’s claims against Purdue”, will make an additional payment of $72.5m, of which $12.5m will be made available to cities and counties in the state to “abate the effects of opioid crisis” and up to $60m for litigation costs. The Sackler family has also pledged $75m over five years to the National Center.
Ocado hits high
Australian partnership
Ocado (OCDO) announced a new partnership with Australian supermarket chain Coles to develop its online grocery business. Coles and Ocado have agreed to operate two fulfilment centres as part of the deal – one in Sydney and one in Melbourne – which are expected to go live in four years’ time. Coles will pay Ocado upfront fees and during the development phase too, before ongoing fees are paid relating to sales and capacity within the centre. The agreement is exclusive in Australia “as long as certain conditions continue to be maintained.” Zero revenue in relation to this partnership will be recognised this year, while capex will only ramp up 18 months prior to the opening of the first fulfilment centre.
Crest poaches boss
London property stagnates
Crest Nicholson (CRST) chief executive Patrick Bergin agreed to step down at the housebuilder’s annual meeting, to be replaced by Galliford Try (GFRD) boss Peter Truscott. Mr Bergin’s departure follows a series of profit warnings, while the housebuilder reported a 15 per cent decline in pre-tax profits for the year to October 2018 as margins suffered due to build cost inflation and a stagnant London home market. Mr Truscott – who will leave his position with immediate effect – will take up his new role in September. In its most recent trading update, management said the group had “faced challenges with dampened customer demand in higher price point areas, amid ongoing political and macro-economic uncertainty”.
China profits tumble
Confidence knocked
Profits from China’s large industrial companies suffered the largest fall in almost a decade during the first two months of the year, according to data from the National Bureau of Statistics. Profits fell by 14 per cent, the biggest decline since May 2009 as uncertainty caused by ongoing trade wars, a slowing economy and the government clampdown on credit have stymied growth. The auto industry – seen as a bellwether for consumer confidence – was one of the worst affected, with profits falling 42 per cent on the same time the prior year during January and February.
Risers and fallers (%)
| INMARSAT | +26.18 |
| ENQUEST | +18.32 |
| LONMIN | +13.53 |
| ALLIED MINDS | +10.4 |
| TI FLUID SYSTEMS | +9.26 |
| KIER GROUP | -24.55 |
| AMIGO HOLDINGS | -22.11 |
| JUST GROUP | -17.69 |
| CHEMRING GROUP | -15.58 |
| THOMAS COOK GROUP | -14.43 |
Week to 26 March 2019
Mortgage prisoners freed
Affordability loosened
The Financial Conduct Authority issued proposals loosening affordability requirements for customers that are up to date with their repayments to apply for remortgages without borrowing more money, in a bid to tackle what it called “mortgage prisoners”. The regulator estimated that around 140,000 borrowers were unable to switch to cheaper deals because of more stringent affordability tests that came into practice after they took out their loans. Most of those customers are paying back loans that belong to institutions that bought debt from lenders that became distressed during the financial crisis, such as Northern Rock.
Majestic goes Naked
Dividend under threat
Majestic Wine (WINE) lose a tenth of its market value on the day the alcohol merchant announced a group-wide restructuring, which will include a slew of store closures, a full rebranding exercise and a £10m charge. A full plan is due to be announced in June, but the basic strategy includes growing the Naked Wines business – soon to be the name of the entire group – with capital released from the core Majestic Wines division. Management warns that there could be further restructuring charges from FY2020, and that the dividend will also be placed under review in June.
