Compass (CPG.L), the world’s largest contract caterer, has bought the Hurley Group, a Toronto provider of cleaning and facility management services in North America, for 29.84 million pounds ($46.89 million). This comes on the back of news that a drop in revenues slowed from three per cent in the fourth quarter of last year to 1.7 per cent in the first quarter of this year. Compass said: “We continue to see strong growth in new business both in food service and in our fast growing support services business and retention rates remain high”. Shares in the group rose 5.2 per cent to 450 pence.
CROWN ESTATE SEEKS 25 MILLION POUNDS FOR HARLEY STREET BLOCK
The Crown Estate is seeking 25 million pounds freehold for a block of terraced properties it is selling on Harley Street, famous for its expensive medical practices. The block, which has not changed hands since the dissolution of the monasteries, 470 years ago, generates annual rental income of 1.2 million pounds. Whoever buys the terrace can expect a net initial yield of 4.36 per cent, lower than the average yields in London of around five per cent. The Crown Estate announced last week that it is to invest 750 million pounds in the redevelopment of Regent Street.
LIBERTY SPLIT BRINGS CAPITAL & COUNTIES BACK TO THE FORE
Liberty International LII.L, Britain’s third biggest property company, is to be split into two separate companies as part of a major restructuring. Its 4.4 billion pound shopping centre business and its 1.7 billion pound London portfolio, will now become Capital & Counties, Liberty’s existing non-shopping centre business, and Capital Shopping Centres, the current shopping centre business where David Fischel, chief executive of Liberty, will become head. The Liberty International name will be dropped, although a final decision on what will happen to it has not yet been decided.
Michael Spencer has defended his decision to sell 45 million pounds of shares in interdealer broker Icap IAP.L only weeks before the business issued a profit warning. Mr Spencer said he complied with the rules governing share sales by company directors and received clearance from his chairman. The warning indicated profits for the current financial year would be 295 million to 315 million pounds against City forecasts of 336 million pounds. One City analyst suggested there was “some sort of integrity issue”. Mr Spencer reduced his holding from 18.4 per cent to about 17 per cent.
Willie Walsh, chief executive of British Airways BAY.L, said business-class travel on short-haul flights was unsustainable as companies look to cut travel budgets. Travellers are either downgrading to economy class or flying with budget airlines. Mr Walsh’s comments follow BA’s better-than-expected third quarter operating profit of 25 million pounds due to the effects of cost-cutting and cheaper fuel. However, the airline continues to struggle with falling income and revenue in the nine months to the end of December down 12.9 per cent to 6.1 billion pounds due to lower fares and falling passenger numbers. BA is still in dispute with 13,000 cabin crew over changes to conditions and pay.
Avanti Communications (AVN.L), the broadband satellite operator, has reported a pre-tax loss of 440,000 pounds for the six months to the end of December, against profits of 2.7 million pounds a year ago.
WH Holding, which owns football club West Ham United, has appointed Shore Capital to raise between 20 and 40 million pounds of equity to improve the club’s balance sheet. Initially, the offer will only be available to professional investors.
The Daily Telegraph
LAST OF HBOS DIRECTORS QUIT LLOYDS TO ‘PURSUE OTHER OPPORTUNITIES’
The two remaining former HBOS board directors have left Lloyds Banking Group (LLOY.L). The bank said Jo Dawson and Dan Watkins will leave at the end of February “to pursue other opportunities”. Their departures come at the conclusion of the Financial Services Authority’s investigation into the quality of HBOS (HALp.L) financial information. The report is believed to have uncovered many failures in the bank’s risk management. Mr Watkins and Ms Dawson were both group heads of risk in 2005 and 2006 respectively and were co-heads of the retail banking arm when Lloyds rescued HBOS. Lloyds declined to comment on the opportunities the pair are pursuing.
Terra Firma’s Guy Hands, the owner of EMI, has provided details of the measures he takes to maintain his non-resident tax status. He outlined his concerns in US court documents aimed at keeping the legal battle with EMI’s lender Citigroup out of UK courts. Terra Firma’s submission also names Citigroup’s Charles Prince and Michael Klein as witnesses in the case which accuses the bank and executives of fraud and interference with Mr Hands’ company. Other documents include a letter from EMI’s chief executive, Elio Leoni-Sceti, to Mr Hands warning of the issues facing EMI.
Tesco (TSCO.L) commercial and marketing director, Richard Brasher, announced on Friday that the supermarket chain will continue its double Clubcard points promotion “for the foreseeable future”. It is a decision that will continue to put pressure on rivals, most notably Asda which suffered a loss of market share in the 12 weeks to January 24. Tesco is currently posting 120 million pounds worth of money-off vouchers to its 14 million clubcard holders.
Sage Group (SGE.L) (buy)
Britvic (BVIC.L) (buy)
BSkyB BSY.L (buy)
Morrisons (MRW.L) (hold)
De La Rue (DLAR.L) (hold)
AstraZeneca (AZN.L) (hold)
Greene King (GNK.L) (hold)
Moneysupermarket.com (MONY.L) (sell)
Wolseley WOS.L (sell)
Cattles CTT.L, the doorstep lender has warned that around 450 jobs are under threat. The West Yorkshire based firm has identified its Welcome Finance business as a target for downsizing after failing to agree a deal with creditors to restart lending in December. The company is shedding costs across the Welcome business and plans to shut around 70 branches and collection units throughout the country.
US food giant Kraft KFT.N has announced that Cadbury CBRY.L CBRY.L shares will be removed from the London Stock Exchange from March 8. The announcement follows Tuesday’s acceptance of an 11.5 billion pound takeover, which has been agreed by 75 per cent of the famous UK confectioner’s shareholders. Once the level of acceptance passes 90 per cent, Kraft can force the remaining shareholders to sell their stock. Kraft said that it will also apply to de-list Cadbury’s American Depository Shares from the New York Stock Exchange.
CARLUCCIO‘S TASTES SUCCESS
The Italian restaurant chain Carluccio CARL.L has declared a revenue increase of eight per cent over the Christmas and New Year period. The business has remained successful, despite fewer customers as Britain experienced one of the coldest January’s in decades. The company said that it expects trading to remain tough but still plans to go ahead with five new restaurant openings this year.
Prepared for Reuters by Durrants ($1=.6363 Pound)