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In the papers: Matalan, Land Securities, Thames Water, Game Digital

Published: 04:29 18 May 2016 EDT

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The Times

Matalan Founder makes last-minute bid for BHS: Talks over the future of BHS were extended beyond ‘s deadline after a frenzied day of negotiations ended with a last-minute bid by the Owner of Matalan.

Brexit fears trigger £1 billion assets sale by Land Securities: The largest listed property company in the country sold off £1.1 billion of assets in the six months to the end of March amid fears that there could be a downturn in the market next year.
We’re not in same boat as BHS, says Thames Water: Thames Water has hit back at claims that its pensions schemes are in crisis and that a deficit in its workers’ retirement funds is comparable to the problems besetting BHS.
Game Digital sees lack of cover as another challenge: Given the choice of impending doom and remaining in uncharted territory, Game Digital opted for the latter as it warned that credit insurers had reduced or removed “significant levels” of cover to its suppliers.
Small businesses ‘failing to win public spending’: A parliamentary committee has poured scorn on the government’s claims that it has boosted public spending with small businesses. The public accounts committee said in a withering assessment of central government procurement that it was “not persuaded” that small and medium-sized companies were winning more work.
Lloyds pays out £130 million to the taxpayer: Taxpayers have collected another £130 million in dividends from Lloyds Banking Group as the Treasury reaffirmed plans to sell its final stake in the lender in the coming months.
Slowly does it for recovery at Speedy Hire: Speedy Hire has spent much of the past year in dire need of repairs but indicated that it was on the mend.
The Independent
Saudi Arabia owns $117 billion of U.S. debt, Treasury papers reveal: The amount of U.S. debt owned by Saudi Arabia has been revealed by the U.S. Treasury after four decades of secrecy. The U.S. Treasury said that the stockpile of debt amounted to $116.8 billion in March, down 6% since January, in response to a Freedom of Information Act request by Bloomberg News.
Banks should cap unarranged overdraft fees, CMA regulator says: Banks should cap unarranged overdraft fees and warn customers before they dip into their overdraft, according to the Competition and Markets Authority.
Ryanair Boss Michael O’Leary defends EU ahead of referendum after years of calling it an evil empire: After spending years fighting the European Union, Michael O’Leary has turned into one of its biggest defenders, and he’s even decorating his airplanes to prove it.

The Daily Telegraph

LandOwners face compulsory purchase orders to improve mobile coverage: Land Owners who refuse to allow mobile masts on their land face compulsory purchase orders at market rates, under new laws due to be announced in the Queen’s Speech.
Global funds fear ‘summer of shocks’ despite boom in money growth: Global fund Managers have almost no faith in the latest stock market rallies around the world and have begun to fear the worst from Brexit, putting aside near record sums of money in cash as they brace for a ‘summer of shocks’
BP’s head of exploration leaves after drilling cutbacks: BP’s head of exploration Richard Herbert is leaving the energy giant after less than three years in the job, as the firm slims down its drilling management teams and seeks to cut costs.
Lending Club shares dive on regulatory probe: Peer-to-peer finance firm Lending Club’s shares crashed by another 10% after the U.S. Department of Justice (DoJ) opened a probe into its business practices.
iPhone fuel cell company Intelligent Energy secures £30 million from ‘raidalot’ poker tycoon to stave off cash crisis: Intelligent Energy, the British company that aims to revolutionise smartphones by replacing batteries with hydrogen fuel cells, has staved off administration with a £30 million loan from its biggest investor, the hedge fund tycoon Talal Shakerchi.
Stock Spirits faces AGM showdown over board appointments: The embattled Chairman of Stock Spirits sought to ward off an investor revolt by offering shareholders a compromise that would see the troubled vodka maker bolster its board with Directors of its choosing.
Theatre’s power couple step back from ATG to run Trafalgar Studios: The Bosses of Ambassador Theatre Group, the world’s largest live theatre company, are stepping back from the business they founded after 25 years. Rosemary Squire and husband Sir Howard Panter are giving up their co-Chief Executive roles to take non-Executive posts as deputy Chairman and Executive producer, respectively.
Heathrow urged to reveal details of runway-linked bonus scheme: A leading opponent of Heathrow’s expansion has called on the airport to publish details of a Directors’ bonus scheme that is partially linked to their success in securing approval for a third runway, a type of incentive plan the hub had previously denied existed.
‘Fair’ estate agent raises £2 million from venture capital royalty: A new online rental platform, which claims to give both agents and tenants and “fair and transparent” deal, has raised £2 million from billionaire investors Saul and Robin Klein through their venture capital outfit LocalGlobe, and from Global Founders Capital, the investment vehicle launched by Oliver and Marc Samwer, Founders of Rocket Internet.

The Questor Column:

Premier Foods: Premier Foods, the maker of Mr Kipling cakes and Ambrosia custard, is struggling to justify to shareholders why it turned down a 65p per share takeover offer from U.S. food group McCormick after annual results show another year of lacklustre sales and losses. Gavin Darby, Chief Executive, believes he was right to turn down the offer as the company is on the track to recovery. The target for sales growth was increased to between 2% and 4% for both this year and next as if to prove the point. There were signs of promise in the fourth quarter as like-for-like sales increased by 1.4%. However, the previous attempt to drive 3% sales growth in the company’s largest eight brands – Bisto, Oxo, Loyd Grossman, Sharwood’s, Mr Kipling and Cadbury cakes – was abandoned in 2014, and the “power brands” category as a whole was discarded last year. The major restructuring in 2014 saw shareholders hand over £353 million to keep the company out of banker’s hands, and this cut the net debts to a more manageable £534 million at April 2. The pension fund has also seen a £603 million deficit at the end of 2013 turned into a £131 million surplus, largely as a result of movements in bond rates. The company reported group sales up 0.6% to £772 million and an operating loss before tax of £13 million for the 12 months to April 2. Within those figures the branded grocery items, which contribute 65% of total revenue, saw a 0.7% fall in sales, and branded sweet treats, which contribute 23% of group revenue, saw a 1.9% rise in sales. Questor has repeatedly warned that equity investors will suffer while the focus is reducing debts from almost a decade ago. Sell. Premier Foods at 38p -1¼p. Questor says “Sell”.
Lonmin steps back from the brink: Shares in Lonmin, the South African platinum miner, soared more than 30% as the company steps back from the brink after last year’s rescue rights issue. The results for the first half of the year showed a glimmer of hope for investors as the loss before tax narrowed to $21 million (£14.6 million), from $118 million a year earlier. The $400 million rescue rights issue launched in November last year has repaid debts and bought the management team some much needed time to put the recovery plan in place. Lonmin needs to drastically slim down the size of its operations in the face of lower commodity prices. It made solid progress in the first half with 5,433 people leaving the business and 1,428 being moved internally. Refinery activity was also more consistent during the period, which helped platinum production and platinum sales increase by 33% and 36% respectively. Lonmin is now producing more platinum and costs are falling but the average platinum price of $905 an ounce during the first half was still 24% lower than a year earlier. Metals prices have performed strongly so far this year with the price of platinum rising 21%. If those gains can be held through the second half of the year then it will be a great boost to the Lonmin turnaround. The sharp fall in the value of the South African rand also meant capital spending went further than expected, and the company reduced full-year targets. Market consensus is for revenue of about $1.01 billion and a pretax loss of about $90 million. Lonmin is the Owner of the Marikana mine where strike activity has previously caused serious disruption. That said, the shares are a short-term trading buy. Lonmin at 195p+32¼p. Questor says “Buy”.
Victrex shares bounce back as it eyes second half recovery: Victrex, the plastics specialist, may have seen its pretax profits fall 13% in the first half of its financial year, but confidence in the recovery of consumer electronics orders in the second half means management believes it will still hit targets for the full year and that was enough to send shares 5% higher. Consumer electronics orders were down 42% in the first half compared with the same period last year. Consumer electronics plastics volumes are expected to more than double in the second half of the year. The slump in the oil price also resulted in oil and gas volumes falling 28%. The lightweight plastic called “Peek” can also be used to replace metal parts in aeroplanes and automobiles. A better performance here, with sales in the transport division up 7%, helped to offset the electronics downturn. The tough first half saw revenue down 10% to £117 million, and pretax profits down 12% to £47.5 million during the six months ended March. Victrex embarked on a major expansion plan during the past two years to increase maximum production capacity by 70% to 7,000 tonnes a year. The balance sheet is debt free and held £45 million in cash at the end of March, up from £42 million a year earlier. Victrex shares have fallen 25%, or around £5 per share, during the past 12 months as a cyclical slowdown hits orders, and competition heats up. That said, the shares, trading on 15 times forecast earnings, still look well placed for a second-half recovery. Hold. Victrex at £15.02+72p. Questor says “Hold”.
The Guardian
U.K. has one of worst records for gender equality at work – report: Britain has one of the worst records on gender equality at work, according to a new report that highlighted the high pay gap for working mothers.
America’s top CEOs pocket 340 times more than average workers: The U.S.’s top 500 Chief Executive officers earned 340 times the average worker’s wage last year, taking home $12.4 million on average, according to a new report.
Microsoft comes out in support of U.K. remaining in EU: Microsoft is the latest business to come out in support of the U.K. remaining in the EU, in a letter to more than 5,000 of its U.K. staff. The tech firm said Britain’s membership in the union made it one of “the most attractive places in Europe” to make investments.
Daily Mail
Standard Life Boss who voted against pay of rivals hit by revolt over his own £3.6 million deal: One of the most outspoken critics of corporate excess has faced an embarrassing shareholder revolt over his own £3.6 million pay packet.
Queen’s favourite chocolatier creates a £90 box of treats, weighing 1kg, to celebrate royal birthday: The Queen’s favourite chocolatier has created a £90 box of treats, weighing 1kg, to celebrate Her Majesty’s 90th birthday as it toasted a 27% rise in sales.
Brexit would be ‘painful for the property industry’, says ‘Walkie Takie’ developer Land Securities as annual profits rise 45%: A vote for Britain to leave the European Union on June 23 would be ‘painful for the property industry’, a U.K.-based commercial developer firm warned, echoing comments from peers.

Daily Express

Inflation falls as air fares become cheaper and high street clothes shops slash prices: Inflation fell in April for the first time since last September as air fares became cheaper and clothes shops slashed prices on the high street, according to official figures.
BT rivals back call for reform to boost the U.K.’s digital communications: BT has hit back at rivals who have renewed calls for a radical reform of the telecoms giant’s Openreach phone and broadband network business to boost the U.K.’s digital communications.
The Scottish Herald
Scottish retail sales weak as consumer caution, poor weather and EU referendum uncertainty weigh: The value of Scottish retail sales in April was down sharply on a year earlier, in contrast to a flat position in the U.K. as a whole, the latest industry figures have revealed.
New Scotch distillery takes modern approach to tradition craft: Scotland’s newest whisky distillery is eschewing the recent trend for craft Scotch, with an aim to produce two million litres in its first year. InchDairnie Distillery, on the outskirts of Kinglassie, Fife was founded by Ian Palmer, a man with 40 years’ experience in the whisky industry.
Barrhead Travel plan to allow holidaymakers to spread the cost of a getaway: Barrhead Travel has launched a holiday finance scheme for their customers that will allow customers to spread the cost of a holiday over 12 months.
Chivas Brothers to fund £100,000 talent development bursaries: Chivas Brothers has launched a £100,000 programme to provide education and training bursaries for talented people.
Energy efficiency project worth £900,000 launches in Scotland: A research and development project worth £900,000 has been launched in Scotland to develop breakthrough technology in the energy efficiency market.
Highland convenience operator plans expansion: A convenience store operator in the Highlands is targeting expansion after being provided with a £660,000 commercial mortgage from Barclays.
Cleaning firm lands £1 million contract: Complete Cleaning, the Glasgow-based corporate cleaning firm, has landed its largest ever single-site contract. Worth in excess of £1 million, the deal is with OI Manufacturing U.K.’s Alloa plant, which makes the bottles for Scotland’s drinks and whisky industry.
Demand for detergent fuels expansion for Selkirk manufacturer: Cleaning and detergent manufacturer RP Adam has opened a new £100,000 U.K. powder production plant at its manufacturing base in Selkirk, in the Scottish Borders.

The Scotsman

Whisky industry issues call to resist moves to Brexit: The U.K.’s membership of the European Union (EU) will be important for the recovery of Scotch whisky exports which are picking up after a decline in recent years, according to an industry body.
Innis & Gunn fired up with first marketing Chief: Craft beer maker Innis & Gunn has taken on its first head of marketing as part of the Edinburgh firm’s rapid expansion plans.
Troubled SeaEnergy finds buyer for Return to Scene unit: Offshore services firm SeaEnergy, which saw its shares suspended last month amid a funding crisis, said it has selected a preferred bidder for its Return to Scene (R2S) arm.
Glasgow diabetes spin-out Caldan beefs up boardroom: A university spin-out that specialises in potential treatments for type 2 diabetes has bolstered its boardroom in the wake of a £4.5 million cash injection.

City A.M.

Former EU adviser says refugee crisis could boost growth and wages in ailing European economies: The refugee crisis has sparked widespread political strife throughout Europe, with governments struggling to agree on how to manage the influx. But now a former economic adviser to Jose Manuel Barroso says that the wave of migration could provide a €127 billion (£99 billion) shot in the arm to the continent’s economy.
Legal expert warns U.K.’s North Sea industry risks suffering a “brain drain”: A legal expert warned employment law has left the U.K.’s already embattled North Sea oil and gas sector at risk of a “brain drain”.
Investment banking revenues plunged to financial crisis levels in 2015 – and a greater drop is expected this year: Global investment banking revenues dropped to their lowest levels since the financial crisis last year. And they are expected to plummet even further this year, according to a new report.
Enterprise Inns posts revenue growth and announces it will sell 22 commercial property sites in a £20 million deal by mid-June: The U.K.’s largest pub company, Enterprise Inns, has made “good progress” in the first half of 2016 and is primed to sell 22 of its commercial sites in a £20 million deal by mid-June.
ECB Chief economist Peter Praet warns of banking “profitability shock”: Eurozone banks should brace themselves for a profitability crisis, the Chief economist of the European Central Bank (ECB) has warned, predicting that the worst is far from over for the industry.
DCC hails “record year” driven by energy sector acquisitions: DCC shares rose four% to 6,395p in early afternoon trade, following what the FTSE 100-listed group described as a “record year”.
Bacanora Minerals Boss: 2020 will be a “magic” year for lithium: The Chief Executive of Bacanora Minerals, which owns one of the worlds lithium mines, has singled out 2020 as a “magical” year for the so-called “white petroleum”.
Fitness of European IPO market boosted by recent activity flurry: A Dutch fitness chain has become the latest company to announce plans for a flotation amid a recent flurry of European activity.

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