Below are the key morning press headlines, featuring the The Times, The Telegraph, The Daily Mail & more - see the full Press section here.
GKN Aerospace is to shed 1,000 jobs worldwide as part of a restructuring that it said pre-dated its controversial £8bn takeover by Melrose Industries (MRO) , which secured the government’s blessing for the deal after promising to invest in the business. The company, based in Redditch, Worcestershire, said it needed to cut jobs to simplify the business, which grew after a series of acquisitions, leading to duplication of roles in the 15 countries where it operates. It is not yet clear how many UK roles will be affected but the company plans to cut 1,000 staff from a global workforce of 18,000, of which 3,500 are in the UK. GKN Aerospace is part of the larger GKN engineering group bought by takeover and turnaround business Melrose after a hostile bid last year. Melrose promised to keep GKN’s headquarters and stock market listing in the UK, after the government stepped in to seek binding assurances. It has since been accused of a “breach of faith” by MPs, after revealing plans to shut the King’s Norton factory in Birmingham, which makes windscreens and windows for both civilian and military aircraft, at the cost of 170 jobs.
MTI Wireless Edge Ltd. (MWE) is looking well placed to benefit from the latest revolution in 5G internet. It is expected to be multiple times faster than its predecessors, with download speeds of over 1 gigabit per second (1Gbps) soon to be the norm. By comparison, the maximum download speed of 4G is around 150 megabits per second (Mbps), meaning 5G will be at least six times faster. All of this is good news for MTI, which in its first-half results in August said it was seeing ‘substantial demand’ for a new range of 5G antennas it is currently developing. The group also develops equipment for radio-frequency identification (RFID), a technology that can automatically identify and track tags attached to objects. RFID technology can be attached to cash, clothing and other possession to keep track of its location, with the market itself predicted to be worth $13.2billion by 2020 compared to $8.8billion in 2013. 5G, meanwhile, is predicted to have a massive impact on the infrastructure for the next generation of communications technology, with some reports estimating that by 2026 the market could be worth as much as $3.4trillion, with MTI aiming to take its own slice of the pie.
After months of haranguing from Wall Street agitator Nelson Peltz, Ferguson (FERG) is demerging its British business and listing it separately in London. Chief executive John Martin is also standing down after 10 years to be replaced by Kevin Murphy – an American, who heads up Ferguson – in America. The move has obvious logic. The balance of power has been steadily shifting Stateside for some time. For 130 years it was named Wolseley, after its founder, who started a sheep shearing business in Australia. It soon moved to the Midlands where it expanded into car making and then heating after the Second World War. But two years ago, the Wolseley name was ditched in favour of its US division’s brand to reflect its growing dominance. Ferguson now reports in dollars and more than four-fifths of turnover is generated in the US. Just 11pc comes from Britain. Its hard to make the argument that this is a British company in anything but name anymore.Still, the demerger will fuel expectations that Ferguson plans to eventually sever its roots altogether and move its main listing to New York especially with Peltz breathing heavily down the necks of the management team.
Restaurant Group (RTN) is poised to shelve plans for Wagamama’s US expansion as it grapples with a £100m writedown of its other restaurant chains at home. The pub and dining group swung sharply into the red as it counted the cost of Britain’s casual dining crunch with an impairment of its UK leisure chains. On top of the huge writedowns, 42 Chiquito sites – half the UK total – were identified as being in “unfavourable locations” and earmarked for closure. In March the company said 76 Frankie & Benny restaurants would be shut. Chairman Debbie Hewitt said: “We’ve just started a piece of work on what the options are for the US.” While America represents only a small part of Wagamama’s operations, it was once regarded as a key springboard for growth, allowing it to replicate its market-leading success in the UK. Some also saw it as justification for the chain’s price tag. Ms Hewitt said that the priority for Wagamama remained the UK. “When we did the acquisition we took the view that the States was an option.” The US had been “stabilised”, she added, and there were “absolutely no preconceived ideas” about what will happen to operations there.
The American private equity firm bidding for Cobham (COB) has been urged to come clean over its plans for the British defence group. Former Cobham boss Gordon Page is sceptical about Advent International’s intentions and has slammed its strategy. And Lady Cobham, the widow of another former boss, Sir Michael Cobham, who was the son of founder Sir Alan Cobham, compared the proposed £4bn sale to the takeover of engineer GKN by Melrose last year. That deal required commitments to the Government in order to be allowed through – and Melrose was criticised this year for plans to shut a GKN factory. Lady Cobham also blasted assurances from private equity companies such as Advent as ‘not worth the paper they are written on’. Opposition is mounting to the 165p-per-share deal, with questions raised over the price of the offer, possible threats to the UK defence industry and a seeming lack of Government scrutiny.
Just Eat (JE.) £9bn merger with Takeaway.com is under renewed threat after another of the UK delivery company’s biggest investors said it would vote against the deal. US hedge fund Eminence Capital, which holds a 4.4% stake and is Just Eat’s ninth biggest shareholder, dismissed the valuation as “grossly inadequate”. “Despite a sound strategic rationale… the proposed merger grossly undervalues Just Eat’s strong portfolio of assets.” it said. The announcement marks the second top-10 investor to reject Just Eat’s merger with its Dutch peer. Aberdeen Standard Investments said last month the deal “does not fully reflect the intrinsic value of the group”.
Hammerson (HMSO) is weighing up a sale of its £1.9 billion stake in the retail outlet business that owns Bicester Village. The shopping centre owner is reviewing options for its 39% interest in Value Retail, which owns nine shopping outlet villages in Europe comprising more than 1,000 stores. The potential sale was first reported by React News, the property news website. Hammerson, which also owns the Bullring in Birmingham and Brent Cross in north London, said this year that it would pursue disposals as it tries to reduce its debt. Falling retail property valuations, particularly for shopping centres, have added to pressure on the company to sell assets.
IQE (IQE) has blamed a weak smartphone market and the US-China trade war for its slump into the red and a fall in revenues. IQE posted a loss of £3.7 million in the six months to the end of June, compared with a pre-tax profit of £6.6 million a year earlier, on revenues down 9.1% to £66.7 million. The weak results followed a 25% slide in IQE’s shares in June after it cut its annual revenue forecasts to between £140 million and £160 million from previous forecasts of £175 million. Drew Nelson, its founder and chief executive, had blamed that downgrade on “unprecedented times” in the global semiconductor industry. The figures compare with annual revenues of £156.3 million last year.
Popular television shows such as the crime drama The Bay and an improving digital performance helped STV Group (STVG) return to profit. Pre-tax profit was £9.1 million for the six months to June 30 compared with a loss of £3.4 million previously, despite a weaker UK-wide advertising market and fewer programme commissions. The company operates the Channel 3 licence in Scotland, the STV Player streaming and catch-up service and a production arm. Revenue was down almost 5% to £54.9 million mainly because of the closure of the loss-making STV2 channel and the phasing of programme commissions. Simon Pitts, chief executive, said STV’s core channel had enjoyed its best viewing share since 2009 because of a strong mix of local and UK shows and improving audience figures for its main evening news bulletin.