Sports Direct receives support for Mike Ashley’s CEO appointment of Debenhams
Sports Direct (LON:SPD) announced on Monday that numerous Debenhams shareholders have expressed their support for the appointment of its boss, Mike Ashley, as CEO of the struggling department store (LON:DEB).
Shares in Debenhams were almost 10% lower during early trading on Monday.
In a brief statement Sports Direct said that it had been contacted by a number of the department store’s shareholders with regards to the protection of their own interests as shareholders. Additionally, Sports Direct said that these shareholders have also expressed their support for the appointment of Mike Ashley as CEO.
As a result, it is making a template letter available to any shareholder in Debenhams in the event that they wish to express their views directly to the department store chain.
Since the beginning of March, Mike Ashley has been battling for control of Debenhams, with back and forth moves being made from both sides.
Monday’s announcement is the latest in Mike Ashley’s struggle for leadership, insisting that his appointment to CEO is desired by many of the department store’s shareholders.
Mike Ashley, who currently owns a 30% stake in the business, has been given the opportunity by Debenhams to save his holdings as long as certain conditions are met. Debenhams had previously said its restructuring plans could wipe out its existing shareholders, Sports Direct included.
Last week Sports Direct announced that is was considering taking full control of Debenhams with a £61.4 million bid for the company.
Debenhams said that Sport’s Direct’s offer “did not provide a solution to the group’s immediate working capital needs.” Despite this, another of its major shareholders, as well as Mike Ashley, have been given until the 8 April to make an offer. This bid must, however, address the department store chain’s debt as a satisfactory level.
Last year Sports Direct purchased House of Fraser for £90 million.
At 10:26 BST Monday, shares in Sports Direct International plc (LON:SPD) were trading at +1.10%. Shares in Debenhams plc (LON:DEB) were trading at -9.75% (10:39 BST).
EasyJet outlook weakened by Brexit uncertainty
EasyJet (LON:EZJ) said on Monday that it is more cautious about its financial performance in the second half of its financial year.
Shares in the budget airline were trading 8% lower on the back of the announcement.
The company said in a statement that whilst the results from the first half will be in line with expectations, Brexit uncertainty is causing a weaker customer demand in the market. As a result, easyJet’s outlook for the second half of its financial year is more cautious.
“We are operationally well prepared for Brexit. Now that the EU Parliament has passed its air connectivity legislation and together with the UK’s confirmation that it will reciprocate, means that whatever happens, we’ll be flying as usual. I am pleased that we have also made progress on our European ownership position which is now above 49%,” Johan Lundgren, Chief Executive of easyJet, commented.
“For the second half we are seeing softness in both the UK and Europe, which we believe comes from macroeconomic uncertainty and many unanswered questions surrounding Brexit which are together driving weaker customer demand,” he continued.
“We are rolling out further initiatives to support our trading and are making significant progress in our Operational Resilience Programme, which is designed to make the easyJet flying experience better for our customers over the summer.”
The airline, who expects a first half headline loss before tax of roughly £275 million, will deliver its first half performance in line with the guidance announced in its first quarter trading statement.
Elsewhere in the aviation industry, esayJet rival Ryanair (LON:RYA) has also warned of Brexit uncertainty. Earlier this year Ryanair said that the ‘risk of a “no deal” Brexit remains worryingly high’. The carrier revealed that it was pursuing a number of steps to secure routes.
At the end of last week Tui (ETR:TUI1) issued a profit warning on the impact the grounding of the Boeing 737 max fleet will have on its profits. It warned that it could incur costs as high as £258 million amid its efforts to seek alternative arrangements for its customers.
Shares in Tui and Ryanair were also dropped, trading 4% and 1% lower respectively.
Brexit: MPs vote to reject PM’s deal for third time
Brexit-related uncertainty is se to continue after MPs voted to reject the Prime Minister’s deal for the third time on Friday.
Theresa May’s deal was defeated by 344 to 286 votes, a majority of 58. This was a slight improvement from the previous defeat with 391 votes to 242.
Despite late deflections in favour by high profile Brexiteers such as Jacob Rees Mogg and Boris Johnson, May was ultimately unable to convince enough MPs to support her deal.
Whilst both Labour leader Jeremy Corbyn and Angus Robertson, The SNP leader in Westminster, called upon Theresa May to resign, the Prime Minister said she will continue to fight for an “orderly Brexit”.
Speaking to MPs in the aftermath of the vote, May said:
“The implications of the house’s decision are grave,” and continued: “I fear we are reaching the limits of this process in this house.”
https://platform.twitter.com/widgets.jsThe vote took place on what had originally been set to be the UK’s official departure from the European Union. However, the Prime Minister was forced to ask the EU for an extension amid a continued deadlock in Westminster over the best path forward for Brexit. Whilst the PM had initially asked for a delay until the 30 June, The EU granted a shorter extension until April 12, in light of upcoming European parliament elections. In anticipation of the elections, The Independent Group, a breakaway group of MPs, also announced on Friday they had submitted an application to officially become a political party. The group are to be known as Change UK and have announced former Conservative MP Heidi Allen as their interim leader, in the hope that they will be able to put forward candidates for the European elections.In view of the rejection of the Withdrawal Agreement by the House of Commons, I have decided to call a European Council on 10 April. #Brexit
— Donald Tusk (@eucopresident) March 29, 2019
The FCA confirms ban on binary options
The Financial Conduct Authority (FCA) has confirmed a permanent ban on binary options.
The ruling will mean that all firms acting in or from the UK will no longer be able to from sell, market or distribute binary options to retail consumers.
The FCA said the ban is in response to ‘widespread concern’ about the risks associated with the products. The rules are set to come into action next month on April 2nd.
The FCA added that it estimated the ban could save retail consumers up to £17 million per year, as well as reducing instances of fraud by unregulated companies.
Christopher Woolard, Executive Director of Strategy & Competition at the FCA, commented on the decision:
‘Binary options are gambling products dressed up as financial instruments. By confirming our ban today we are ensuring that investors don’t lose money from an inherently flawed product.’
The Financial Conduct Authority is a financial regulatory body in the UK.
The city watchdog operates independently from government bodies, and was previously known as the Financial Services Authority (FSA).
Tui issues profit warning after Boeing 737 Max grounding
Tui has warned on the adverse impact the grounding of the Boeing 737 max fleet will have upon profits.
The travel company said it may cost it as much as €300 million (£258 million), as it looks to find alternative arrangements for its customers who will be affected.
Tui said some of these measures included leasing additional planes, extending expiring leases that were supposed to be replaced by the 737 Max, as well as using spare aircraft in its fleet.
Moreover, the firm added that a ‘considerable amount of uncertainty’ remained regarding when the Boeing 737 Max will return to flight.
In the statement, Tui said that its Executive Board have decided to revise guidance to an underlying EBITA for the full-year of approximately -17%, as opposed to previous “broadly flat” expectations.
The grounding of the Boeing fleet occurred after safety concerns were raised over the aircraft.
Various aviation authorities opted to ground the fleet after two separate plane 737 max crashes occurred in the space of five months.
Tui has a fleet of about 150 aircraft, including 15 of the grounded 737 Max.
An additional eight of the Boeing aircrafts are due for delivery by the end of May.
Tui is one of the largest travel companies in Europe, it is headquartered in Hannover and Berlin in Germany.
It operates 1,600 travel agencies, 150 aircraft as well as 16 cruise liners and 380 hotels and resorts.
Tui shares (ETR: TUI1) are currently trading -6.59% on the back of the profit warning.
The Independent Group applies to become an official party
The Independent Group have applied to become an official party, in anticipation of the European Parliamentary elections.
The Independent Group have now adopted the name Change UK, with former Conservative MP Heidi Allen as its interim leader.
The application has been submitted in a bid to stand in the European elections on the 23 May, should the UK not withdraw from the EU beforehand.
Addressing the application, the group tweeted the following:
https://platform.twitter.com/widgets.jsThe Independent Group is a breakaway group, which currently consists of 8 former Labour MPs and 3 Conservatives. Allen issued the following statement: “If we are to deliver on our ambition to change politics for the better, it is vital that we attract support from people from every walk of life, every political background and none. Coming into the House of Commons from running my manufacturing business in 2015, I have seen with my own eyes how improved our political system would be if it harnessed the diverse skills and experience of our country. “We in Change UK, as we hope to be known, don’t just dream about a fairer and better future for our country, we are determined to unleash it through hard work, passion and shared endeavour.” In a statement, Chuka Umunna, one of the first deflectors to the Independent Group commented: “There is clearly an appetite for an alternative to our broken politics which needs fundamental change, as shown by the disastrous Brexit process which has occurred under the watch of the two main parties. A new party will shake up the two-party system and provide people with an alternative that can change our country for the better. This is what Change UK will be aiming to do at any European elections if our application for registration is accepted in time. “The Independent Group is a diverse group of MPs which reflects modern Britain, drawn from different generations and backgrounds including a former GP, teacher, lecturer, social worker, solicitor and TV presenter. We intend to draw on all the voices of our group in any European election campaign. We will seek to put forward a substantial number of MEP candidates with backgrounds from outside of politics.”We’ve done this in order to stand candidates in any European elections that come about as a result of a long extension of the Article 50 process, and we hope to shake up the two-party system and provide people with an alternative that can change our country for the better.
— The Independent Group (@TheIndGroup) March 29, 2019
Travis Perkins announces departure of CEO
Travis Perkins announced the departure of chief executive John Carter, the company announced on Friday.
Travis Perkins said that Carter, who has been at the helm for five years, is set to be replaced by Nick Roberts as of July the 1st.
Carter will however, remain at the building materials retailer until the end of 2019 to ensure a smooth transition.
Before his appointment at Travis Perkins, Roberts was chief executive at Atkins, an engineering and project management consultancies.
Stuart Chambers, Chairman of Travis Perkins commented on the directorship change:
“On behalf of the Board I would like to thank John for his exceptional leadership which leaves Travis Perkins well placed to meet its customers’ needs and to continue to deliver long term value growth for its shareholders and other stakeholders. John has given over 40 years of dedicated service to Travis Perkins, serving as a Director for 18 years and as CEO for the last 5 years, substantially improving the business during his tenure as CEO. ”
Welcoming the new appointment, he added:
“We are delighted to announce Nick’s appointment. Nick joins us from his role as CEO of Atkins where he has been running a significant relationship-led global engineering, design and project management business. Nick has the breadth of skills needed to grow the business and to build on the strategy outlined in December.He has deep experience of the construction, design and engineering industries; which coupled with his successes in the adoption of digital, will prove invaluable in driving the Group’s strategy into the future.”
Shares in Travis Perkins (LON:TPK) are currently down -0.22% as of 11:07AM (GMT).
