SSE admits that npower merger is at risk
SSE (LON: SSE) has confirmed that there is some uncertainty over its merger with n-power.
The big-six firms intended to merge in order to create the UK’s second largest retail energy supply company.
The group said in a statement that the energy firms are agreeing on new terms, which means they could miss a deadline for its completion.
“There is now some uncertainty as to whether this transaction can be completed as originally contemplated,” said the energy firm when reporting half-year results.
“Nevertheless, the board believes that the best future for SSE energy services, including its customers and employees, will continue to lie outside the SSE group.”
The deal was initially approved by regulators last year but growing competition has increased fears among shareholders who may not back the deal.
In the latest annual results, the energy company reported a 41% fall in underlying pre-tax profits. The group lost £62.1 million in total compared to £409.3 million in profits a year earlier.
“The market for energy and related services in Great Britain remains intensely competitive, with over 70 suppliers competing for customers and around three million customers switching their electricity provider in the six months to 30 September,” said the group.
Npower’s owner, Innogy (ETR: IGY), reported falling customer numbers on Tuesday.
The group has lost about 500,000 accounts this year and has predicted a loss for the fourth quarter.
Rik Smith, who is an energy expert at the comparison site, said: “Npower has been pricing relatively in line with its big six counterparts and at times earlier in the year it was offering some of the cheapest deals from the big suppliers.”
“However, this hasn’t been enough to stem its customer losses as people look further afield than the big six for a good energy deal.”
Debenhams shares slide amid supplier fears
Facing difficulty with suppliers in the run-up to Christmas, Debenhams shares tumbled 21% towards the end of Wednesday.
The department store faced its biggest ever one-day fall recorded in over ten years.
Last month, when revealing poor financial results the group announced plans to carry out 50 store closures and a turnaround plan.
As retailers are facing difficulty, suppliers are reported to be turning against Debenhams. Fears were raised after suppliers took a financial hit following the collapse of House of Fraser.
A supplier told Drapers Magazine: “They owed us so much money at any one time, we decided it was too risky.”
“It’s not worth it. I know other suppliers are nervous about going forward with Debenhams, [and] we were in the same boat. It could be a disaster for them.”
A Debenhams spokesperson said: “Many suppliers don’t use credit insurance. Those that have used it historically are well aware of the current situation and work with retailers to manage things accordingly. Debenhams is well stocked for Christmas.”
In the department store’s annual results last month, Debenhams posted the biggest financial loss in its 240-year history.
Amid the rising prices, fall in the pound and Brexit uncertainty, many retailers have collapsed this year resulting in the loss of 85,000 jobs.
Toys R Us, Maplins and Poundworld have all collapsed into administration this year whilst Mothercare (LON: MTC), Homebase and New Look have carried out CVAs and closed stores in the UK.
Shares in the group (LON: DEB) are currently trading -9.43% at 4.77 (1052GMT).
Sterling sinks as the UK government plunges into Brexit-induced chaos
The pound has suffered significant losses following 24 hours of chaos at the heart of the UK government.
The pound fell over 1% in seconds following the announcements Dominic Raab and Esther McVey were to leave their posts.
Brexit secretary Dominic Raab said he “cannot in good conscience support” Theresa May’s proposed deal as it bound the UK to EU rules for period longer than he felt right.
Esther McVey was not long behind Dominic Raab. Her resignation was predicted by many political analysts and could prove to be a catalyst for wider chaos.
Their departures came after Northern Ireland minister Mr Vara handed in his resignation.
A total of 8 ministers have now quit Theresa May’s cabinet in the past 12 months.
Dominic Raab and Esther McVey are a major blow to Theresa May and it couldn’t have come at a worse time for May or financial markets.
Foreign exchange markets have been nothing less than febrile in the past 24 hours with the pound bouncing wildly against the dollar and other major currencies.
Having initially rallied yesterday evening as May revealed her deal had won the Cabinet’s approval, sterling sank as minister handed in their resignations.
The velocity of the drop in sterling this morning suggest markets greatest fear is the UK leaves with No-deal as opposed to leaving with a bad deal.
GBP/USD was down over 1% on Thursday morning, heading to key support at 1.2700. A break of this level could see Cable, as GBP/USD is common referred to, hit the lowest levels since 2017.
Elsewhere in markets, the FTSE 100 remained stable as the index was balanced out by rising exporting stocks benefiting from a weaker pound and falling domestic UK shares.
Housebuilders were among the heaviest hit with Barratt Developments, Taylor Wimpey and Bovis Homes down between 4-8%. UK Banks also suffered as Lloyds and Barclays fell over 6%.
Faroe Petroleum exploration disappointment
Faroe Petroleum (LON:FPM) are left disappointed after their latest offshore exploration leaves them empty-handed.
The firm announced their failure to discover commercial volumes of hydrocarbons at its Rungne exploration site in the North Sea near Norway.
The primary Oseberg formation’s only fruit was a water-bearing reservoir, and while the secondary Ness formation did bear a 17 metre net gas and condensate column, its prelim gas and condensate recoverable volume range was 0.5-3.9 million barrels, and was thus deemed not to be commercial in isolation.
“In a six well exploration programme some disappointing outcomes are inevitable,” chief executive Graham Stewart said.
“Although no hydrocarbons were present in the main Oseberg target we are pleased to have encountered hydrocarbons in the secondary Ness target which provides new data.”
“In addition to the ongoing Agar/Plantain well, results from which are expected shortly, Faroe’s exploration programme will continue over the remainder of the year with two further committed exploration wells in Norway: the Brasse East and Cassidy wells.”
The news comes a month after the Aberdeen-based firm announced their plans for North Sea exploration, with later announcements revealing that they were successful in securing an additional $100 million loan to bolster its future exploratory ambitions in the region.
Today’s news will come as a disappointment following attempts to reassert Britain’s place in the oil market, with price increases prompting a somewhat sluggish revival of commerce in Aberdeen.
Faroe shares are currently trading down 3.13% or 4.2p at 130p a share, as of 15:54 GMT, 14/11/18.
Conor McGregor relishes Proper Twelve success
Infamous and divisive, the brash MMA character that is Conor McGregor seems to have once again handled the business side of his brand correctly with the launch of his Proper No. Twelve Whiskey.
The Irishman was determined to pedal his new product as hard as his bravado ahead of his last – unsuccessful – bout with Lightweight Champion Khabib Nurmagamedov. Much like his notoriously large performance personality, McGregor’s latest enterprise appears to divide opinion with equal vehemence.
Many seasoned critics have gone on to criticise the quality of the product, and likely took as much joy in slighting its flavour as they did watching McGregor’s defeat at the hand of Nurmagamedov.
For many, myself included, it almost misses the point. Like Conor or not, he has been able to put out a product he wanted to make, he is proud of, and has been able to watch it take off.
In an interview with the Entrepreneur Magazine, Conor said,
“My late grandfather played a huge role in my taste for Irish whiskey. It was under his tutelage I began to study and truly appreciate whiskey.”
“However, something about simply endorsing an Irish whiskey didn’t feel right to me – I wanted to create my own, I wanted to do it my way and I wanted to do it right – from start to finish.”
Whilst discussing the ramifications of the post-fight conduct at UFC 229, “The last thing he needs to worry about is his check,” said Dana White, “The whiskey thing is probably going to make this kid a billion dollars. They can’t keep his Proper No. Twelve whiskey, they can’t keep it off the shelves. It’s flying off the shelves. All the casinos around here are not only serving it, selling it. He’s killing it, and good for him.”
From the moment Proper Twelve launched, in “10 days we sold six months’ worth of product.” said McGregor.
With this undeniable flying start then, Conor should not – and very likely doesn’t – lose sleep over disparaging reviews, especially those that facetiously note that its flavour might fall short of a 60 year old bottle of Macallan single malt.
As an added incentive, Conor announced that he will be donating $5 of every case sold – up to $1 million annually – to first responders.
“It’s an infinite honor to be able to give back to first responders globally, as a way to say thank you for everything they sacrifice to keep our families and our people safe.”
House of Fraser to close 4 more stores
House of Fraser has announced plans to close a further four stores.
The closures will be in Nottingham, Norwich, Newcastle’s Metro Centre and the Lakeside shopping centre in Essex after a lower rent could not be agreed with landlords.
“We had multiple meetings with Intu but we were no further forward after 14 weeks. Unfortunately, these stores now face closing in the new year,” said Sports Direct (LON: SPD) boss Mike Ashley.
The properties that the stores are located in belong to Intu.
“I urge other institutional landlords to be more proactive to help save the House of Fraser stores in their schemes,” added Ashley.
Intu said in a statement: “House of Fraser stores in our portfolio will be closing in early 2019, representing around 1% of our secured rent and 526,000 sq ft of retail space.”
“We are enthusiastic about the opportunity to re-engineer and re-let this underperforming space to new and exciting alternatives.”
Since buying the department store earlier this year, Ashley hoped he would save most of the House of Fraser stores. Although he has protected many, about eight are due to close.
In the past, the tycoon has blamed “greedy landlords” for the closures.
He paid £90 million for the stores and said he hoped to turn them into “the Harrods of the High Street”. He has currently saved 22 House of Fraser stores from closure, protecting 3500 jobs.
The collapse of the department store was blamed on its failure to embrace the shift to internet shopping, too many stores and management woes.
Caledonia Mining shares down with profit dip
Caledonia Mining Corporation Plc (LON:CMCL) has seen a share price dip in trading today as it suffers from the underwhelming output and low gold prices.
The company have reduced their guidance following disappointing Q3 profits, with the adjusted figure through September dropping to $2.2 million for the three month period.
As part of this hit, output dropped 2.9% to 13,978 ounces for the quarter, and its output guidance for the year has subsequently been trimmed to 54,000-56,000, from 55,000-59,000 ounces.
Compounding their misfortune, cost per unit also rose by 5%, with an ounce of gold costing the company $670 – meanwhile, Caledonia’s gold-mining counterparts Fresnillo Plc (LON:FRES) and Greatland Gold (LON:GGP) have enjoyed shares and guidance upgrades.
“The third quarter of 2018 was an improvement on the second quarter of the year,” chief executive Steve Curtis said.
“We addressed some of the operating challenges which the business experienced in previous quarters; cost control remained good, and Caledonia stabilised its cash position and working capital movements”.
The firm’s Chief Executive was realistic about the disappointing results but stressed the need to take extra safety precautions and ensure the accuracy of future drilling. The company remain confident in the efficacy in the Blanket Mine in Zimbabwe.
“Grade for the quarter remained below expectations at 3.12 grams per tonne as we continued to experience some mining dilution due to the introduction of long-hole stopping in the narrower reef width areas due to safety considerations. Corrective measures have been taken to improve the accuracy of drilling which are expected to result in improved mined grades in the remainder of the last quarter of 2018 and thereafter. We remain confident that the underlying geological model for Blanket and the grade of the resource remains sound”.
Caledonia shares are currently trading down 2.22% or 10p at 440p (1001GMT).
UK tech sector has “worrying” lack of diversity
New figures have shown women and ethnic minorities to be underrepresented in the tech sector.
Inclusive Boards have found a “worrying” lack of diversity in the UK’s tech industry, particularly at senior levels.
The report has shown people from a minority background makeup just 8.5% of senior roles in technology.
Women account for 12.6% of board members. In the FTSE 100 firms, women now account for 30% of board members.
Samuel Kasumu, who is the director of Inclusive Boards, said: “The figures are particularly worrying when you consider how important the tech sector is.”
“It contributed close to £200 billion to the economy in the last year and its growth rate is 2.5 times faster than the whole economy.”
“Every other sector is reliant on technology: you have edtech, fintech, govtech, and healthtech. Our future, every single aspect of our lives, is increasingly becoming reliant on technology.”
“So it’s very, very dangerous and alarming to see that particular groups are not being able to fully participate in the sector, and in a sense are being left behind,” he added.
The report has considered information from the 500 largest tech firms in the UK, collecting from 1,882 executives and a further 1,696 board members.
The House of Commons will launch an Inclusive Tech Alliance (ITA) on Wednesday with representatives from Facebook (NASDAQ: FB) and LinkedIn, which is a new official body to combat the lack of diversity in the tech industry.
“When you look at the typical board member … it is less likely that they would be somebody from a developer background. We all know the story of Mark Zuckerberg, but that’s not necessarily a traditional story. It is usually somebody with a different type of expertise, who has a value that doesn’t require them to be a coder,” Kasumu said.
“On a board you can have a finance director, an HR specialist, a legal and compliance specialist, and somebody who’s really well connected and involved in communications.”
“At board level, variety is the key strength point. So there’s no real reason why the tech sector should be so disproportionately worse than other sectors at board and senior leadership level.”
Renold hikes prices and profits jump 71%
Industrial machinery manufacturer Renold Plc (LON:RNO) has seen its profits spike after passing through increased raw material costs and boost revenues with higher prices. This represents another positive boost for engineering firms listed in the capital.
Pre-tax profit for the first half through September was up 71% on-year to £4.1 million, up from £2.4 million for the same period last year.
Similarly, the firm are enjoying a boost in revenues, which are up 4.5% percent between 2017 Q1 compared to Q1 2018.
“I am pleased to report that we have made good progress in addressing the short-term issues encountered last year,” Renold Chief Executive Officer Robert Purcell said.
“The improvement is most pronounced in the Chain division, where we are seeing benefits from the many actions implemented.”
“Our strategy is delivering a more robust, higher margin business and we look forward to continuing current momentum into the second half of the year.”
The company are in the midst of a strategic overhaul, with the recent build of a new factory in the Jiangsu region of China. The firm are also considering a switch the AIM market in London, which it believes will give it the “ability to execute transactions with greater efficiency and certainty.”
Renold shares are currently trading up 6.35% or 2.2p, up to 38.8p a share 13:59 GMT.
Peel Hunt have initiated their first rating of Renold stock, with a ‘Buy’ stance as of today.
Galileo Resources shares rise after exploration target announcement
Galileo Resources shares (LON:GLR) rose during Wednesday trading after the company announced an exploration target at its Star Zinc Project in Zambia.
The resource and development company said that the target had been located at the Star Zinc project, which it owns a 80.75% stake in.
According to the update, the exploration target is estimated to be between 600,000 and 900,000 tonnes, and expected to have a grade of 10-12 % Zn.
Colin Bird, Chief Executive Officer of Galileo Resources, issued the following statement on the results:
“The result of this programme and the Model is extremely pleasing with a significant increase in conceptual tonnage and metal, which confirmed our belief in the project’s potential. We believe Star Zinc now has the drilling density and necessary confidence to convert the CGT to a maiden JORC Mineral Resource Estimate, planned for Q1/Q2 2019 once all the chemical assays have been received. Past comparison of pXRF results with chemical assays suggest that pXRF is biased towards lower values than chemical assays. We will modify the Model and report accordingly as the chemical assays are received.
He continued: “We have instructed our consultants to expedite required work with a view to applying for a mining license when this is completed. To this end we intend to commission further refinement of the Model to delineate the body into high grade and low grade Willemite components and to develop an open pit design/mine plan with a view to selective mining of a high grade component for direct ore feed and a lower grade Willemite component for possible physical upgrading also as ore feed. This is a major advantage for the project, pursuant to the Term Sheet agreement to acquire Star Zinc, in that a dedicated process plant would not be necessary. Negotiations continue with Kabwe for an offtake agreement for Star zinc ore.”
Alongside the Star Zinc project in Zambia, the company has three other assets. These include two in South Africa, and one in Nevada in the US.
Shares in Galileo Resources are currently up 4.40% as of 14.13PM (GMT).