Poor US manufacturing data ladled on top of weakening economic data from around the globe has dampened investors' spirits this morning with the FTSE100 in particular selling off hard. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
IC TIP UPDATES:
‘Drastic’ Dave Lewis is leaving Tesco (TSCO). He joined in 2014, and shortly after revealed the accounting practices that necessitated a massive profit warning and wide-ranging restructuring of the business. Mr Lewis will be replaced by Ken Murphy, the former joint chief operating officer at Boots UK and Ireland. Murphy has a consulting agreement in place with Walgreens Boots Alliance, and so his exact start date is as yet unknown. The group also announced its interims this morning, revealing constant currency growth in adjusted operating profit of almost a quarter. Buy.
Vernon Hill, the founder-chairman of Metro Bank (MTRO) is to step down from the bank’s board by 31 December, two months after saying he would remain as a non-executive director after a successor was appointed. In another change to the handover schedule, Metro has now decided that an existing non-executive director will be appointed as interim chair if no full-time replacement is found by the year-end – even though that hunt is reportedly “progressing well”. News of Mr Hill’s departure initially led to a rise in the bank’s shares this morning, though they have since dropped, and are now down 6 per cent. Sell.
In yet another board-level reshuffle, Martin Gilbert has announced his intention to step down from the board of Standard Life Aberdeen (SLA) from next 30 September, having served as vice chairman (and co-founding Aberdeen Asset Management). Earlier this summer, Mr Gilbert was linked to the chairmanship of digital bank Revolut. Sell.
QinetiQ (QQ.) has agreed to buy MTEC, a US advanced sensing solutions provider, for $105m. The deal gives QinetiQ a US operation of around $300m and approximately 750 employees, more than doubling the size of its US activities and taking US revenues up to around a quarter of the defence contractor’s overall turnover. Buy.
OTHER COMPANY NEWS:
RPS (RPS) has completed the acquisition of Reservoir Imaging, a seismic software services consultancy, for a maximum cash consideration of £4m. Joining the international energy segment, the purchase strengthens the group’s expertise in the offshore oil and gas sector and enhances its existing marine seismic capabilities.
With chairman Alan Aubrey describing 2019 as an “inflection point”, Ceres Power (CWR) more than doubled its revenue to £15.3m in the year ending 30 June, as pre-tax losses narrowed by more than a third to £7.4m. The fuel cell developer saw gross profit rise to £11.5m, with higher margin license activity delivering an improved margin of 75 per cent. The group now has license agreements with four of the world’s largest engineering and power companies, including Bosch and Weichai, both of whom have made equity investments. The first commercial product launch is due later this year in Japan.
Intermediate Capital Group (ICG) has appointed Lord Davies of Abersoch as its non-executive director and chairman-designate, pending regulatory approval. Lord Davies will replace Kevin Parry, who is due to step down after ten years with the alternative asset manager, and in accordance with the UK’s Corporate Governance Code.
Builders’ merchants Grafton Group (GTFU) has completed the disposal of Plumbase, for £60.7m cash after adjusting for debt and working capital. The sale, to Plumbing and Heating Investments Limited, is in line with the company’s strategy to prioritise higher-margin businesses, and on a pro-forma basis would have reduced Grafton’s sales and operating profits by £258m and £6m, respectively, in 2018.
Naked Wines (WINE) has disposed of fine wine merchants Lay & Wheeler for £11.3m. The sale is merely the latest in the group’s disposal programme, as it gears up to bet heavily on Naked Wines, the subscription wine service that has become the core business since the sale of the Majestic Wine retail and commercial business.
Kin and Carta (KCT) reported a 1.1 per cent decline in net revenue to £148m over the year to July 2019. Meanwhile, it swung to a statutory pre-tax profit of £4.8m, from a loss of £31.2m. Back in August, the group had said in a trading statement that pre-tax profits were expected to be marginally lower than market expectations, because it had increased investment in its transformation agenda and continued to reposition its communications and strategy segments for the digital market. Now, we know that it saw an improved performance in ‘strategy’, ongoing double-digit growth in ‘innovation’ (which constitutes over half of net revenues) and stabilisation within communications.
