OTHER COMPANY NEWS:
Continuing its strategy of simplifying operations, Mitie (MTO) has announced the sale of its catering and hospitality business to CH&CO for a consideration of up to £85m in cash. The deal is expected to complete in early September with the sale proceeds being used to shore up the balance sheet and reinvested in the business. Peel Hunt estimates the ratio of net debt to cash profits will fall from 1.3 times to 0.7 times for FY2020 but has reduced its adjusted pre-tax profit forecast by 11 per cent to £70.4m. Shares are up over 2 per cent in early trading.
West Africa oil and gas company Savannah Petroleum (SAVP) has finally got the sign-off from the government on its takeover of Seven Energy. The acquisition of the struggling gas producer was announced in 2017 and expected to be done by March 2018. Savannah shares were up 50 per cent on the news, to 18.8p, although they are still down a third year-to-date. Savannah is buying interests in two producing gas fields and a marketing and processing business in Nigeria. Seven restructured its debt in 2017 and last year announced twice it could not cover the interest payments to holders of $400m (£330m) in bonds.
M&C Saatchi (SAA) issued a further trading update after market-close last Friday. The group reiterated its guidance from 12 August 2019, that management is confident of meeting expectations of operating profits for the year, before the exceptional charges referred to within that announcement. As disclosed on 12 August, the 2019 half-year results are expected to show a reduction in pre-tax profits year-over-year. They’re also expected to show a decline against the first half of 2017 and 2016. The group expects like-for-like operating profits to rise over the full year, excluding the impact of the investment in Walker Media (which was sold in February 2019) and the cited exceptional charges.
