Romanovitch to step down from Grant Thornton
Sacha Romanovitch has announced plans to step down as Grant Thornton’s chief executive by the end of the year.
Romanovitch is the first UK female chief executive of a major City accountancy firm and has been at Grant Thornton for 28 years.
“As we enter the next phase of our plans, following discussions with Grant Thornton’s board, we have agreed that the time is right for a new chief executive to take the firm forward,” she said.
“I will be working to support a smooth transition to our next chief executive, focusing on continuing to deliver sustainable value for our clients through our diverse and talented team,” she added.
Romanovitch, who has been the group’s chief executive since 2015 and partner since 2001, will step down once a successor has been found later this year.
Ed Warner, independent chair of Grant Thornton UK’s partnership oversight board, said: “Following discussions with Sacha, the board has agreed that a new CEO is the logical next step to create long-term sustainable profits for the firm.”
Romanovitch introduced changes at the firm, which included capping her own salary at 20 times the firm’s average pay.
She also overhauled the partnership structure with a John Lewis-style profit-sharing scheme for all staff, instead of just partners.
In September, the chief executive was attacked for creating a “culture of fear” within the company.
An anonymous letter stated the firm was “out of control” as well as having “no focus on profitability.”
She responded to the letter: “A small cadre of partners will find it hard we are making decisions that will depress profits in the short-term but will help profits in the long-term … If profits get unhinged from purpose it might not hurt you now, but it will come back and bite you on the bum.”
Ford boss: Brexit could be “pretty disastrous”
Ford (NYSE: F) has been the latest carmaker to warn against a no-deal Brexit.
Steven Armstrong, the group’s European boss, warned that a no-deal Brexit could be “pretty disastrous” and could affect operations in the UK.
“For Ford, a hard Brexit is a red line. It could severely damage the UK’s competitiveness and result in a significant threat to much of the auto industry, including our own UK manufacturing operations,” Armstrong told the BBC.
“While we think this is a worst-case scenario and that a UK-EU deal will be reached, we will take whatever action is necessary to protect our business in the event of a hard Brexit,” he added.
The warning came on the same day Nissan and AstraZeneca (LON: AZN), who both said a hard Brexit was harming business.
Armstrong told the BBC his views about the suggested Canada-style trade deal, which were not positive.
“If this was introduced for all UK-EU trade, the level of congestion and blockages at the ports would undermine our just-in-time manufacturing system,” he said, highlighting the customs and border checks.
Ford is the latest carmaker to warn against Brexit impacts to business. Toyota (TYO: 7203), Jaguar Land Rover and BMW (ETR: BMW) have all said that Brexit could affect operations in the UK.
A spokesperson from Nissan (TYO: 7201) said on Monday: “In agreement with our employee representatives, the 2019-2020 pay negotiations in our UK plant and technical centre will commence in 2019 when we have better clarity on the future business outlook.”
Armstrong also made clear that his comments were not an excuse to minimise operations in the UK after the contract at the Bridgend plant ends in 2020.
“We have to look at what’s happening within our broader business. We have been very clear since [JLR] decided to put their business elsewhere that we would continue to look for options for Bridgend,” he said.
The comments come as Theresa May prepares for a Brexit summit on Wednesday, which will discuss the Northern Ireland border.
Shoe Zone reports rise in profits, shares rise 12pc
Shoe Zone (LON: SHOE) has reported a growth in profits and revenue, sending shares up 12.5%.
The retailer expects to report revenue of £161 million, compared to the £157.8 million revenue in 2017. Pre-tax profit is expected to come in at £11 million for the year to 29 September.
Despite a total of 20 stores closing over the year, Shoe Zone contributed growth to the ten new out-of-town retail park ‘big box’ stores.
“The group has performed well through the year with a particularly strong performance in the second half. Our strategy of growth through big box expansion and online channels allied with excellence in the operations of the core Shoe Zone estate provides us with a clear path for the future,” said the group’s chief executive, Nick Davis.
“I am particularly pleased that the continued strong cash conversion has enabled the board to outline its intention to propose its third special dividend.”
“The new financial year has started well and there are a further 14 big box openings planned. We look forward to updating shareholders on progress at the time of our final results in January,” Davis added.
FinnCap analyst Peter Smedley said: “Today’s strong FY18 pre-close trading update represents a positive profit surprise. We, therefore, increase our FY18 PBT forecast by +9% to £11 million.”
“The rollout of Big Box and strong progress in online sales underpin the medium-term growth profile, backed by SHOE’s strong balance sheet.”
“SHOE’s operational and financial performance in FY18 is even more noteworthy given the raft of profit warnings reported elsewhere in the UK clothing/footwear sector over the past two months.”
“It is difficult for any retailer to stand apart from the turbulence affecting the sector at present, but the combination of SHOE’s strong performance, low valuation and appealing dividend yield (6.9% on the ordinary) make it look a particularly attractive investment, in our view,” he added.
Shares are currently trading up 11.25% at 183,00 (1740GMT).
Nicola Sturgeon calls for Brexit delay
Nicola Sturgeon has called for an extension of the Brexit transition period.
Scotland’s first minister has said that it is “time to compromise” to find a “common sense” solution to Brexit.
“If the last two years have shown us anything, it is surely that more time will inevitably be needed to agree the future relationship, and so being able to extend the transition period will be vital to avoid another cliff-edge scenario,” she said.
In a speech in London, Sturgeon called on Theresa May to reconsider the decision to withdraw the UK from the customs union and single market.
The Scottish first minister said that staying in the customs union and single market would be the only option that could potentially command a Commons majority.
“[Chequers] is not a serious and credible option. And the only reason it is the only option on the table is because the UK government has refused to countenance any others,” she said.
Sturgeon also said that nothing would be gained from the rushing of the UK’s departure from the EU, which so far “lacks precise detail.”
“For MPs to support a bad or blindfold Brexit – a cobbled-together withdrawal agreement and a vague statement about our future relationship – would in my view be a dereliction of duty,” she said.
“It is my strong view that such a deal should be rejected – not in favour of no deal as some will try to suggest, but as a way of getting a better deal back on the table,” she added.
In response, the prime minister has said that a delay is “not an option”.
A spokesman for the UK government’s Department for Exiting the European Union (DExEU) said: “We will have an ambitious course outside of the EU that enhances our prosperity and security and that genuinely works for everyone across the UK.”
“We have put forward a precise and credible plan for our future relationship with the EU and look forward to continuing to engage with the EU Commission on our proposals.”
EY Item Club: UK set for three years of low growth
EY Item Club have warned that the UK is set for three years of lagging growth.
Previously, The EY Item Club forecast GDP growth of 1.3% for 2018, and 1.5% in 2019.
This marked a downward revision from 1.4% and 1.6% projected in its previous outlook three months ago.
However, the economic forecasting company said that should no Brexit deal be reached, this would prove “significantly weaker”.
“The EY Item Club suspects that the Bank of England will want to see sustained evidence that the UK economy is holding up relatively well after Brexit occurs in late March, before hiking interest rates,” the findings stated.
EY chief economist Mark Gregory also commented: “The UK economy is going to experience a period of low economic growth for at least the next three years, and businesses need to recognise this and adjust accordingly.”
“They should also consider a sharp downside to the economy in the event of a no-deal Brexit and make preparations for such a scenario.”
“Even if the Brexit process goes smoothly, the cyclical risks to the UK economy mean this would still be a worthwhile exercise. Now is the time to start to think about the future shape of any UK business after 2020,” Gregory warned.
The downbeat EY Item Club forecast comes after Brexit talks over the weekend hit a standstill over the Northern Ireland border.
With the deadline for withdrawal fast approaching and no sign of a discernible trade deal on the horizon, a no-deal scenario is becoming increasingly likely.
Various companies have warned the government that a no-deal would severely impact business in the UK.
Just recently, the chief executive of the Royal Bank of Scotland (LON:RBS) said that a lack of deal could lead the UK into another recession.
Prime Minister Theresa May is set to update the commons on Brexit negotiations later this afternoon.
Royal Mail employees lose out after share price tumbles
Royal Mail (LON: RMG) employees have lost about £850 each following a sharp fall in share price two weeks ago.
Staff were waiting for Monday to sell the free shares they received five years ago when the group was privatised.
On October 1, the company issued a profit warning, sending shares down almost 30% to 338p. Before the profit warning, shares were trading at 477p and previously peaked at 631p in May.
Following the profit warning, analysts at The Share Centre said the company faced the risk of falling out of the blue-chip FTSE 100 index at the next quarterly reshuffle.
Helal Miah, an investment research analyst at The Share Centre, said: “After only a few months in charge the new chief executive of Royal Mail has issued a shocking trading update to the market, which was certainly unexpected.”
“Having been hovering around the FTSE 100 relegation lists in the last few quarterly reviews, the shares are now more than ever at risk of dropping out of the prestigious top 100 in the next reshuffle.”
Employees have expressed frustration and some have accused the company of deliberately issuing a profit warning just two weeks before many were planning to sell shares.
Des Arthur, a postman from Coventry, told the BBC: “The timing of it could be viewed as extremely cynical. It’s going to look like it’s not right.”
Terry Pullinger, deputy general secretary of the Communication Workers Union (CWU), said: “Our members certainly believe it’s just been done to deflate what they would get if they sold their shares.”
“You know what people are like; people in some ways have already spent that money in anticipation,” he added.
The fall in share price has led to some Royal Mail employees to cancel holidays as well as delay payments such as debt repayments.
The group’s spokesperson said: “We were very disappointed that we had to issue a trading update last week. We know and understand this is disappointing for those colleagues who had been planning to sell some of their free shares. But we have to comply with stock market disclosure rules, which required us to make an announcement as soon as possible.”
Claire’s considers UK closures
Accessories chain Claire’s is considering store closures in the UK.
The company is the latest to show signs of the difficult trading conditions and is reportedly in talks for a number of options, including a Company Voluntary Arrangement (CVA).
A spokesperson for the retail group said closing underperforming stores was “part of normal business practice”.
If Claire’s goes ahead with the CVA, hundreds of jobs could be at risk. The retail chain has over 350 stores in the UK and dozens of concessions.
The news has come just days after Claire’s US parent company emerged from bankruptcy protection.
The parent company emerged from Chapter 11 protection after restructuring almost $2 billion (£1.5 billion) worth of debt.
The company could be the latest retailer to be hit by the difficult high street trading conditions, which have led to the administration of Toys R Us and House of Fraser.
Other retailers to be affected have been Carpetright (LON: CPR), Mothercare (LON: MTC) and New Look, which have all used CVAs to close stores and cut jobs.
Ron Marshall, the group’s chief executive, said Claire’s is now “a healthier, more profitable company”.
Monday also saw Superdry announce a profit warning, sending shares down 20%.
House prices: which major global cities are struggling?
Since the financial crisis of 2008, housing markets across the world have begun to show signs of recovery.
Nevertheless, some of the world’s biggest and most popular cities property markets are continuing to cool.
So, which cities are struggling to sell?
London
Whilst previously consistently ranked as one of the leading prime luxury property markets, these days the London market is considerably more subdued.
In fact, owners of expensive property in the capital are set to see limited improvement over the next few years, with Brexit uncertainty proving a major factor, Savills recently said.
Moreover, stamp duty surcharges of between 1 and 3 percent for overseas buyers, looked also set to impact the market over the next few years.
Whilst property in other parts of the UK show signs of promise, London house prices have continued to decline over the last few years.
Investors will be looking to the chancellor’s upcoming Autumn Budget Speech in October, to see if Hammond is set to address any additional measures directed at the property market.
Sydney
It seems stagnating house prices are not limited to Europe, with Sydney’s property market also continuing to decline.
According to figures, Sydney’s median home value has fallen 4.4% since the beginning of the year.
By individual capital, listings in Sydney and Melbourne have also surged by 19.5% and 18.4% over the past 12 months, pushing down demand.
Moreover, recent research from the ABS regarding residential housing prices, also shows signs of a cooling market.
The latest residential property price index data indicated that house price in Sydney in the June quarter, marking the fourth consecutive quarter of decline.
Specifically, Sydney prices fell 1.2% in the period, with prices in Melbourne also down 0.8%.
New York
Over in the states, some of the countries largest cities have shown signs of recovery since the housing bubble burst back in 2008.
Nevertheless, whilst cities such as New York prove more resilient, the Big Apple isn’t necessarily the best place to consider investing.
According to Trulia, New York City house prices are behind the national average.
Home appreciation value in New York increased 31% between 2012 and 2018.
This proved significantly behind cities such as Los Angeles, which witnessed a rise of 68.4 percent across the same period.
If the marked decline of house prices across these metropoles are anything to go by, looking beyond major cities may be key for investors going forward.
How to make an investment on Crowdcube
Crowdcube is the UK’s leading equity crowdfunding platform with 600,000 registered members and over £500,000,000 invested in pitches through their platform.
To help our readers understand the process of registering with Crowdcube, we have compiled a 5-step guide to using the platform.
1. Register for an account to become a member
You can also use your email or an existing Facebook or Linkedin profile to create an account. This will give you access to the full details of the opportunities on Crowdcube and allow you to request restricted documents such as business plans.
2. Request restricted documents
Once registered, you’re able to request documents relating to a pitch including full business plans and executive summaries. These documents are key to understanding a business and outline the firm’s value proposition. At the top of the pitch you will be able to see if the company has advanced assurance from HMRC for any tax benefits for investors in the form of The Seed Enterprise Investment Scheme (SEIS) or Enterprise Investment Scheme (EIS).
3. Review rewards and share classes
Many companies conducting a fund raising round will offer rewards for making different levels of investment, these are accessible at the bottom the page. Also in this area, you will find the different share classes available to investors. Companies will set a certain level for which investors will receive ‘Investment’ shares. Investment shares give investors the same rights for dividends and capital distribution as ordinary share holders, but do not have voting rights or pre-emptive rights. ‘Ordinary’ shares will give investors voting rights and pre-emptive rights.
4. Make an investment via the ‘Invest Now’ function
When you have decided to make an investment, you can simply enter the amount you would like to invest and click ‘Invest now’ to complete your investment. There is a minimum of just £10.
5. Confirm you investment
Funds are not taken from your account until the raise hits the target. The money will be taken from your account once the pitch has fulfilled its target, however, you still have 7 days to review your investment. If the pitch does not secure its target amount, the funds will not be taken from your account.
Remember as with all investment, investing in company shares through Crowdcube means your capital is at risk.
The publisher of UK Investor Magazine, Investment Superstore, is now crowdfunding on Crowdcube, please click here to view our pitch.
ConvaTec shares plunge after profit warning and CEO departure
ConvaTec shares (LON:CTEC) plunged on Monday, after the company warned on profits and announced the departure of its chief executive.
The international medical and technologies company announced the retirement of Chief Executive Paul Moraviec, with immediate effect.
Moraviec is set to be replaced by Rick Anderson, who will assume the role of interim chief executive officer.
The company said that the board has asked Rick Anderson, who was a Non-Executive Director of ConvaTec and previously Group Chairman of Johnson & Johnson, to assume the position on a full-time basis until a permanent replacement is found.
Sir Christopher Gent, Chairman of the firm, said:
“I would like to thank Paul for leading ConvaTec through an important phase of the Company’s development and the first period of being a public company. Paul leaves with the Board’s best wishes for his retirement. I am grateful to Rick for agreeing to take on executive responsibility as Interim Chief Executive Officer and I am sure the Company will be in very good hands until Paul’s replacement has been appointed.”
Paul Moraviec said:
“We have made significant progress during my time as Chief Executive Officer and I am confident that ConvaTec now has the strong platform, infrastructure and leadership to enable the business to flourish. I would like to thank all my colleagues across ConvaTec for their hard work and dedication, they have taken ConvaTec to a leading position in the MedTech industry and I look forward to watching the Company’s future success.”
ConvaTec was founded back in 1978 and is listed on the London Stock Exchange. The firm is a constituent of the FTSE-250 Index.
Its products include products and services relating to wound care, ostomy as well as infusion devices.
The company has 9,000 employees, with operations in over 100 countries.
Shares are currently trading -30.55% as of 11.47AM (GMT).