Below are the key morning headlines from today’s papers, featuring the Financial Times, The Times, The Telegraph, The Daily Mail & more - see the full Press section here.
Apple shares slide despite record result. Profit jumps but iPhone sales fail to impress. Apple posted record results for the fourth consecutive quarter last night but easily missed Wall Street’s target for iPhone sales and issued a disappointing revenue forecast. The company sold 46.9 million iPhones in the three months to September 29, its fourth quarter, against analysts’ estimates of 48.4 million. However, pricier models pushed the average selling price up to $793, higher than the forecast of $751. The shares fell 7.1 per cent to $206.52 in after-hours trading last night, having closed at $222.22, up by 1.5%
Patisserie Valerie seals rescue as Luke Johnson reveals it was ‘three hours from going bust’. Patisserie Holdings (CAKE) has secured shareholder approval for a vital bailout at a stormy general meeting where bosses were given a tongue-lashing for refusing to elaborate on the company’s precarious finances. Speaking at a meeting to sign off the £15m rescue deal, executive chairman and serial entrepreneur Luke Johnson admitted the company was “three hours from going into bankruptcy”. The cake and coffee chain shocked investors three weeks ago, admitting a £40m black hole had opened up in its finances and warning of “significant, potentially fraudulent accounting irregularities”.
Babcock confirms closure of Appledore shipyard despite £60m rescue offer. Engineer Babcock International Group (BAB) has confirmed the closure of the Appledore shipyard in north Devon, despite the offer of a £60m rescue package by the Ministry of Defence (MoD). The shipyard, which employs 200 workers, is the last survivor of a centuries-old tradition of shipbuilding on the north Devon estuary. Thousands of protesters last week marched to save the yard from closure and a petition signed by 8,000 people was handed to the House of Commons. But on Thursday Babcock said it had taken the “difficult decision” to close Appledore yard in March next year. It said: “Babcock’s focus is now firmly on its workforce and its determination to protect their employment within the business.
Barclays opts for Rothschild veteran to replace chairman. Barclays (BARC) has turned to one of the City’s oldest financial firms for its next chairman. Nigel Higgins, deputy chairman of Rothschild & Co and the first person outside the Rothschild family to lead the group, will take over from John McFarlane at Barclays’ annual meeting in April. Crawford Gillies, the senior Barclays independent director who led the search for a chairman, called Mr Higgins the “ideal candidate”. “He is a hugely respected banker, a strategic thinker, someone with extensive international experience and he has a strong positive leadership style,” he said.
Shell gushes about one of its strongest quarters. Profits at Royal Dutch Shell ‘B’ (RDSB) leapt by more than 50% to $5.6 billion in the third quarter thanks to higher oil and gas prices. The Anglo-Dutch oil giant reported bumper cash flow of almost $15 billion in the three months to September and announced that it was stepping up the pace of its $25 billion share buyback programme. Ben van Beurden, the chief executive, hailed the result as “one of our strongest ever quarters”, though underlying profit was about 2.5% lower than analysts had expected. Shell’s B shares, which are traded in London, fell by 3.5% to £24.75 yesterday in response to a sharp daily drop in the oil price.
Carpetright claims turnaround on track as store closures hit sales. Sales continued to fall at Carpetright (CPR) in the six months to Oct 27 as the struggling retailer closed scores of stores as part of a major restructure. The flooring-to-beds company shut 65 underperforming stores in the UK and two in Europe, with a further six expected to close before the end of the year. It said like-for-like performance remained negative over the period as forecast, but declined to give solid numbers. It claimed that there was an “improvement in the trend” as the restructuring took effect.
Morgan Sindall shrugs off construction turbulence to predict record profits. The boss of construction giant Morgan Sindall Group (MGNS) shrugged off turbulence in the sector, insisting it was on track to post record revenues and profits despite a slump in forward orders. The company, whose work ranges from fitting out City offices to building affordable housing and railway tunnels, told investors that trading in the second half of its financial year had “remained strong” and it would end the year with a better than expected cash position. John Morgan, who started the company in 1977 and remains chief executive, said it was standing out in what had been an otherwise “gloomy” sector.
Breakthrough drug makes for healthy sales at Shire. Sales from the recent launch of a potential blockbuster helped boost revenues at Shire Plc (SHP) ahead of its planned £46 billion takeover by a Japanese rival. Shire posted a 6% rise in product sales in its third quarter, leaving revenues up 5% to $3.87 billion compared with a year earlier. The FTSE 100 member was founded as a seller of calcium supplements above a Hampshire off-licence in the mid-1980s. It has become a global specialist in rare diseases and neuroscience with a large American business. Flemming Ornskov, its chief executive, said that the impending takeover by Takeda had not interrupted trading, with sales growth led by its immunology franchise, its biggest division.
Hip reconstruction gives Smith & Nephew (SN.) strength. The best performance at Smith & Nephew’s hip reconstruction business for almost a decade has put the medical equipment company on a firmer footing. The FTSE 100 group posted a 2% rise in third quarter revenue to $1.17 billion and said that its annual profit margin would be stronger than last year. The positive update helped to lift the company’s shares by 6.6% to £13.57, putting them among the best performers on the premier share index yesterday. Smith & Nephew, which operates in three divisions: orthopaedic reconstruction, wound care management and sports medicine and trauma, dates from 1856 when Thomas Smith opened a pharmacy in Hull. It employs about 16,000 people in more than 100 countries.
Ocado and B&M join grocery code. The supermarket industry watchdog is to start monitoring how Ocado Group (OCDO) and B&M European Value Retail S.A. (DI) (BME) treat suppliers after their respective annual turnovers passed the £1 billion mark. The Competition and Markets Authority (CMA) said that Ocado, the online grocer, and B&M, the cut-price retailer, would be bound by the Groceries Supply Code of Practice, which governs how suppliers are treated to avoid abuses of power. For example, retailers bound by the code cannot make changes to the terms of supply retrospectively and must provide notice and give reasons when cancelling a supplier’s contract.
4Imprint Group (FOUR) , which sells promotional products such as branded mugs for corporate events, has reaped the rewards of its advertising, according to analysts. The business has upped its spend on TV and radio ads, and announced yesterday that its full-year revenues would be at the top end of market expectations. Targeting revenue of £770million by the end of 2022, it said it is on track to hit this goal. Last year it pulled in £483million
Indivior (INDV) , which creates drugs to treat heroin addiction, said profits fell 12% in the first nine months of the year to £208.5million. It has been squeezed by late roll-outs of new drugs, and competition from rivals which it alleges are infringing its patents. But investors, already warned of the poor results, seemed willing to take a punt as shares climbed 3.8p, to 192.1
Shareholders in BHP Billiton (BLT) were feeling flush as the mining giant promised to return £8billion to them. Half would come through buying back investors’ shares, while £4billionn would be through a dividend in January. It comes after BHP sold its US onshore oil and shale gas assets in July.
