Below are the key headlines from today’s updated papers, featuring the Financial Times, The Times, The Telegraph, The Daily Mail & more - see the full Press section here.
Kier boss ousted over rights issue debacle as Carillion fallout spreads. Shockwaves from the collapse of outsourcer Carillion claimed another corporate scalp on Tuesday as the chief executive of rival Kier Group (KIE) was unceremoniously ousted by the board. Carillion’s demise has thrown an uncomfortable spotlight on the fortunes of peers such as Interserve — engaged in a major restructure likely to leave lenders in control — and Kier, which was forced into a £250 million rights issue in November as banks pulled away from the sector. Kier chief executive Haydn Mursell paid the price for the sudden cash-call today as he was removed with immediate effect. His departure comes days after reports that investment guru Neil Woodford — a 16% shareholder — was pressing for the removal of Mursell or finance director Bev Drew after the rights issue and the halving of the share price in the past year.
EasyJet says Gatwick drone chaos cost it £15m. Airline says it is ‘well-prepared’ for Brexit and demand for flights remains solid. easyJet (EZJ) said the flight disruption caused by drone sightings at Gatwick before Christmas had cost it £15m, but insisted it had made a good start to the year and was “well-prepared” for Brexit. About 82,000 easyJet customers were affected and more than 400 flights cancelled after to the drone sightings, which brought the UK’s second-busiest airport to a standstill and caused three days of disruption. The chaos cost easyJet £10m in customer welfare costs and £5m in lost revenues, as more travellers cancelled their flights. Despite the extra costs, easyJet expects full-year profits to meet City forecasts. The low-cost carrier said demand for flights remained solid, despite the looming spectre of a no-deal Brexit. The chief executive, Johan Lundgren, said: “We are well-prepared for Brexit and we feel confident that flights will continue without disruption for EasyJet – I can’t speak for other airlines.” The airline took early precautions by setting up a sister company, EasyJet Europe, in Austria in 2017, where it has registered 130 aircraft. While the EU and the UK have committed to ensure flights will continue even if Britain leaves the EU without a deal on 29 March, EasyJet has also been relocating spare parts and staff paperwork to ensure all certification remains recognised by Europe in the worst-case scenarios.
Jupiter brings in Andrew Formica as chief executive on £445,000 salary plus bonus. Money manager Jupiter Fund Management (JUP) has hired one of the City’s biggest names, Andrew Formica, as its new chief executive just six months after he left Janus Henderson with a whopping £9.1 million severance package. Formica takes over from Maarten Slendebroek, boss for over five years but who in the past year has been battling billions of pounds of investor outflows and a 40% fall in Jupiter’s share price. Jupiter has been cutting its executive ranks and in December dismissed chief operating officer Lance DeLuca.
UK borrowing was surprisingly high last month as Europe cost the nation £1.5 billion more than last year, official figures showed today. In December 2017 the Government received a £1.2 billion rebate from the European Union as changes to its budget saw significant returns to member states. But the effect was much smaller last month, resulting in a £300 million net contribution. The one-off effects called a temporary halt to the improvement in the public finances, with net borrowing of £3 billion for the month ahead of the £2.7 billion seen a year earlier. The Office for National Statistics said it was still one of the lowest borrowing outturns for December in 18 years. Capital Economics said unless previous figures were revised, borrowing targets were in danger: “If public borrowing sustains this reduction for the rest of the fiscal year, net borrowing would come in at £30.7 billion in 2018/19, a fair bit higher than the Office for Budget Responsibility’s forecast of £25.5 billion.”
Tesco set to get rid of hundreds of jobs. Tesco (TSCO) is poised to slash hundreds of jobs from its supermarkets in the latest cost-cutting drive by boss Dave Lewis, the Standard understands. The grocer is to start consulting with staff as early as this week over potential job losses at store management level. Lewis, who has led a turnaround of the business since he arrived in 2014, has wielded the axe on more than 10,000 roles so far. He earned the moniker Drastic Dave when cutting costs at Unilever. The grocer is the latest to make job cuts, joining rivals Asda, Morrisons and Sainsbury’s in overhauling the structure of its stores. Tesco is aiming to make £1.5 billion in cost savings by 2020.
Dixons Carphone plots duel with Mike Ashley in big gaming hunt. The boss of Dixons Carphone (DC.) on Tuesday said he was banking on gaming to lure shoppers, setting up a High Street showdown with retail tycoon Mike Ashley. Chief executive Alex Baldock, who joined Dixons in April to implement a new strategy, has opened 17 “gaming arenas” within its shops, where customers compete against each other on in-store consoles, and plans to have 140 by next year. He added: “We’re pretty excited about this. Gaming makes stores a much more exciting destination. Shoppers can come in and get a feel of the tech.” The move could turn Dixons into a direct competitor to retailer Game Digital (GMD), in which Ashley owns a 25% stake. The Sports Direct International (SPD) tycoon paid £3.2 million last year for half of Game’s e-sports business Belong to set up similar gaming arenas in Sports Direct stores.
WPP shareholder Martin Sorrell remains concerned about progress at ad giant. Adland veteran Sir Martin Sorrell on Tuesday said he still wants WPP (WPP), the firm he acrimoniously departed last year, to do well and he is “concerned” about progress there. Sorrell was in Davos for the World Economic Forum as he spoke about WPP, which he left in 2018 following an allegation of personal misconduct that he denies. “I remain a shareholder, so I’m very concerned about the progress that WPP makes too,” Sorrell, who holds 1.5% of WPP, told CNBC. He added: “Obviously it’s not been an easy period over the last six months or so in terms of major clients at WPP, but having said that we’re very focused on that progress.” The company, which he ran for 33 years, lost a decades-old creative account for Ford last October. New boss Mark Read plans to cut jobs, simplify its structure and increase investments. Sorrell, dubbed the Sage of Soho, also spoke about his new venture, digital advertising specialist S4 Capital (SFOR) . He said the business, of which he is executive chairman, is focused on a smaller part of the market: “I can’t, for the life of me, believe that WPP is worried about little old S4Capital.”
Brands must put ‘purpose’ over profit, new Unilever boss tells Davos. The new boss of Unilever (ULVR) has claimed that the mass-produced consumer good market of the last 100 years is undergoing “seismic changes” amid soaring demand for brands to put “purpose” over profit. Alan Jope said that consumers wanted to know how brands are “making society and the planet a little better”. This burgeoning market is “an absolute magnet” – products that could demonstrate a clear purpose experience “dramatically better growth”, he said. “The consumer goods market has been operating on the same model for the last 100 years and that is mass groups of consumers being offered mass-produced products, sold through mass channels,” he added.
Davos 2019: Hasty Brexit is in nobody’s interest, warns ex‑Bundesbank chief. A disorderly Brexit would “set Europe back for years to come”, Germany’s former central bank boss has warned as he called on both sides to make compromises to deliver a deal that is acceptable to everyone. Axel Weber, the former Bundesbank president who is now chairman of UBS, the global Swiss bank, said that it was in the interest of both Britain and the European Union to strike a deal and remove the tail risk of no deal. If time is running out, Article 50 should be extended to continue negotiations, he added. He was speaking after the International Monetary Fund’s latest growth forecasts revealed that eurozone growth was slowing sharply and amid signs of rising populism across the continent. France has been hit by broad protests at President Macron’s economic reforms and the German chancellor Angela Merkel was forced to step down as leader of her party amid a backlash over her decision to open the borders to refugees.
Four House of Fraser stores slated for closure have been saved after Mike Ashley and shopping centre landlord Intu Properties (INTU) struck a truce following months of fractious negotiations. Mr Ashley, who owns the department store chain, had threatened to pull all 17 of his retail empire’s shops from Intu centres. He accused the company of being “unwilling to help retailers save stores and jobs” after it refused to meet his demands for rent cuts. However, the two sides have reached an “interim agreement” that will save the shops at Intu’s centres in Norwich, Nottingham, Lakeside in Essex and the Metrocentre in Gateshead open and 1,000 jobs.
Pets at Home Group (PETS) has revealed it may spend an extra £8m stockpiling “pet essentials” such as poo-bags and dog food as it braces for the prospect of a no-deal Brexit. The pet and vet chain is the latest company to reveal its preparations for the UK’s withdrawal from the European Union as the retailer shrugged off the high street gloom with record Christmas trading. The company revealed that its dog salons groomed a record 24,000 dogs in the week before Christmas as owners pampered their pets. The business also sold nearly 80,000 Brussel sprout-themed products, 170,000 dog outfits and 22,500 Santa hats for cats