Below are the key morning press headlines, featuring the The Times, The Telegraph, The Daily Mail & more - see the full Press section here.
Royal Dutch Shell ‘B’ (RDSB) has warned that slowing global economic growth is depressing oil and gas prices and could delay the completion of its $25 billion share buyback programme. Shares in the Anglo-Dutch oil giant sank yesterday after it said that prices were lower than it had planned for and could leave an $9 billion hole in its cashflow assumptions if they persisted. Shell issued the warning as it reported third-quarter results in which underlying profits, excluding one-off gains, fell by 15% to $4.8 billion because of the impact of lower prices and weaker margins in its refining and chemicals businesses. The group has said increasing its dividend would be dependent on a “line of sight” to completing the buyback programme. It indicated yesterday that a dividend increase now looked further off. Jessica Uhl, chief financial officer, said: “We are focusing on completing the buyback programme and then looking to grow dividend per share in the coming years.” Ben van Beurden, the chief executive, made an unscheduled appearance on a call with analysts to insist that “nothing has changed” in Shell’s plans or intentions. However, economic conditions had changed and “the current macro, if it persists, is going to affect us”, he said.
Lloyds Banking Group (LLOY) has set aside almost £22bn in total to cover the rush of complaints for PPI mis-selling – more than all of its combined profits since it started paying for the scandal in 2013. The lender earmarked an extra £1.8bn to cover PPI costs on Thursday after being stung by a last-ditch scramble for compensation ahead of a deadline for claims earlier this year. This extra hit almost wiped out profits for the third quarter of 2018. It dragged them down to just £50m, 97% less than a year earlier. Lloyds has now put aside money for the scandal equivalent to the UK’s policing budget for 18 months, with more than £1bn worth of change left over.
BT Group (BT.A) boss repeatedly refused to rule out cutting its prized dividend to fund investment in broadband. Philip Jansen said the payout to shareholders – worth about £1.1 billion – was safe for this financial year. But it could be cut in future. BT is preparing to ramp up its rollout of cutting-edge broadband across the UK. But the firm has not yet decided how the plans would be funded. It plans to connect fibre cables, which provide faster internet speeds and are cheaper to maintain than existing copper wires, to 4m homes and businesses by 2021. But Jansen said this could rise to 15m by the mid-2020s if regulator Ofcom and the Government agree to ease taxes on broadband wires and relax pricing restrictions.
Meditor, which is headed up by former Old Mutual fund manager and poker player Talal Shakerchi, said it would be willing to pay 5p a share for Carpetright (CPR) , which values it at just £15.2million. Carpetright, which is grappling with a £56million debt pile, has been seeking alternative financing as its existing facilities near expiry. It said it requires around £80million to repay lenders, meet ongoing payment requirements and execute its recovery strategy. Last year, it turned to Meditor for two short-term loans, and in August the investor took control of Carpetright’s revolving credit facility of £40.7million from previous lenders NatWest and AIB. The move was broadly interpreted as a show of confidence in the struggling chain.
The owner of British Airways has taken a €155 million hit from the first strike by pilots in the carrier’s history. Underlying operating profits fell 7% to €1.4 billion in the third quarter and the group warned that annual earnings would be 6% lower, according to accounts for International Consolidated Airlines Group SA (CDI) (IAG) . Pilots downed controls in September in a dispute over pay, forcing BA to axe about 1,700 flights. Members of the BA pilots’ union had planned another strike at the end of that month but called it off to allow for more negotiations. Willie Walsh, IAG’s chief executive and a former Aer Lingus pilot, said that the company would not be providing a running commentary on talks but added that he expected a resolution before the end of the year. Mr Walsh, who has run the company and its predecessor for a decade and a half, said that he would step down within two years. “I’m 58 and I will not be in this job when I’m 60,” he said. The Irish executive, who joined BA from Aer Lingus in 2005, once said he would resign when he was 55.
Crest Nicholson Holdings (CRST) has issued a profit warning after a period of volatile trading that the housebuilder said was largely driven by Brexit-related consumer uncertainty. The company said that it expected to report full-year pre-tax profit of between £120 million and £130 million. That is down from the £176.4 million it achieved last year and below average analyst estimates of £152.9 million. The trading update sent the shares lower. The company said that it had written down the value of its London developments by £10 million across about five sites “to reflect current market conditions”. It has also recorded an exceptional charge of £17 million for remedial work that it expects to carry out after changes to government building regulations since the Grenfell tower fire tragedy.
Codemasters (CDM) said that it had extended its contract with Liberty Media to develop and publish the Formula One game at least until 2025 and potentially until 2027. The company has held exclusive rights to the console and computer game since 2008. Analysts at Liberum said the extension of the contract “highlights the increasing strength and value of this partnership”, noting that Codemasters would benefit from trackside advertising at Grand Prix.
The new boss of Smith & Nephew (SN.) plans to continue the turnaround strategy introduced by its outgoing chief executive, whose departure was announced suddenly last week after a pay dispute. Roland Diggelmann, 52, was appointed to replace Namal Nawana, who had been in the top job for 18 months. His exit surprised shareholders as Mr Nawana, 48, was in the early stages of attempts to drive improvement in the medical equipment company after years of sluggish performance. The company is consulting with shareholders on a new executive remuneration policy. A spokeswoman said last week that “there was too big a gap between Namal’s aspirations on pay . . . and what’s acceptable in terms of UK corporate governance best practice”.