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Thursday Papers: Big Four accountancy firms plan for forced break-up

Thursday Papers: Big Four accountancy firms plan for forced break-up

Top stories

  • Financial Times: The Big Four accountancy firms and the next largest UK audit firms have prepared contingency plans for a break up of their UK businesses, in case regulators force them to spin off their audit from their consulting businesses.
  • The Times: The Transport Secretary Chris Gayling was under pressure to strip underperforming rail lines from private companies after he announced that Virgin Trains East Coast would be stripped of its franchise next month.
  • The Daily Telegraph: Lachlan Murdoch will become chief executive of the new 21st Century Fox as James Murdoch will leave the media conglomerate after most of its assets are sold to Disney; younger Murdoch is considering to set up a venture capital fund to invest in media and technology start-ups.
  • Financial Times: Total has threatened to pull out of Iran unless it can be protected from US penalties following American withdrawal from the nuclear deal; the French group became the largest foreign investor in the Islamic country’s energy sector after sanctions were eased in 2016.
  • Financial Times: Washington has downplayed threats from North Korea to withdraw from a planned summit if the White House continued to pressure it to “unilaterally” abandon its nuclear weapons programme.
  • Financial Times: Felix Ehrat, Novartis's general counsel since 2011, has quit the Swiss drugmaker after being dragged into a controversy over $1.2 million payment made to a company owned by Donald Trump’s personal attorney in the year following the president’s 2017 inauguration.

Business and economics

  • The Guardian: Burberry beat analysts’ expectations by posting a 5% rise in annual profits on the back of the success new Burberry handbag and an acclaimed final collection from Christopher Bailey.
  • The Daily Telegraph: Japanese carmaker Nissan has rolled out its first home energy system that will allow energy users to generate their own solar power, which can be stored in a battery or used to charge an electric vehicle.
  • Financial Times: Tencent recorded 65% rise in net income to Rmb23.97 billion ($3.81 billion) in the first three months of the year, powered by gaming and online ads.
  • The Guardian: The Indian steelmaker Tata Steel swung to a profit of 146.9 billion rupees (£1.6 billion) in the three months to the end of March, from a loss of 11.7 billion rupees a year earlier, in large part due to a boost of more than £1.5bn from the restructuring of its pension scheme.
  • The Times: Equipment hire company Speedy Hire has bounced back to unveil a healthy pre-tax profit of £18 million despite losing more than £2 million in unpaid bills when Carillion collapsed.
  • Financial Times: Food delivery start-up Deliveroo told its 2,000 staff in a memo that the company will be handing £10 million of stock options to permanent staff in a move to promote loyalty from employees.
  • The Times: The transport catering group SSP reported strong cashflow in its half-year results yesterday and hinted that it is considering a £100 million special dividend for a second year in a row.
  • Financial Times: Transport for London’s operating deficit worsened by 26% to £1 billion in the year to March after its government grant was slashed and passenger numbers declined.
  • The Times: Crest Nicholson cut the forecast for its full-year margins from the 20.3% achieved last year to 18% due to construction costs and flat house prices, prompting its shares to slide by 12.5%.
  • Daily Mail: Cineworld sales at the box office fell 2% as superhero films Avengers: Infinity War and Black Panther failed to bring enough audiences.
  • The Guardian: Gordon Ramsay’s restaurant group Kavalake has reported a pre-tax loss of £3.8 million in the year to the end of August 2017 as it plans to shut one of its flagship venues, Maze in London’s Mayfair, and open five new restaurants overseas.
  • The Daily Telegraph: Mothercare has rehired former boss Mark Newton-Jones just over a month after he was sacked, as the troubled retailer embarks on a major restructuring.
  • The Times: Buy-to-let lending fell 20% over the past year as the removal of interest relief, taxes on second homes, and tougher standards for lenders drained credit from the market.
  • The Guardian: National Audit Office has found that outsourcing giant Capita exposed patients to risk of serious harm after taking over NHS England’s administration service, as failures resulted in 87 women being notified incorrectly that they were no longer part of the cervical screening programme.
  • Daily Mail: The deputy chairman of Sky, Martin Gilbert, who is also co-chief executive of Standard Life Aberdeen, has taken a leave of absence from the board of miner Glencore to focus on the bid battle at the broadcaster.
  • The Times: Playtech investors have revolted over the 78% pay rise of its chief executive despite the gambling software business issuing a profit warning.
  • The Times: The Italian restaurant chain Carluccio's has hired KPMG to advise on the restructuring by means of a company voluntary arrangement.
  • Financial Times: Shares in India’s Reliance Communications tumbled nearly 20% on Wednesday after a court ruling that it should face bankruptcy proceedings, following a complaint by Sweden’s Ericsson over $150 million in unpaid fees.
  • The Daily Telegraph: A senior European Parliament lawmaker has said that British-based clearing houses should not be forced to move to the European Union after Brexit, in a sign of a softening of Brussels’ hardline stance.
  • Financial Times: Fifa is preparing to call a vote on a $25 billion proposal to shake-up world football that promises a huge windfall for clubs and national teams with two new global tournaments.

Share tips, comment and bids

  • The Times (Tempus share tips): BUY Paddy Power Betfair; AVOID Centrica.
  • The Daily Telegraph (Questor share tips): Capita shares fell by 36% last Thursday but shareholders needn’t worry.
  • The Guardian: Paddy Power Betfair has launched a bid for fantasy sports league company FanDuel.
  • The Times: Masayoshi Son, chief executive of Softbank, the Japanese telecoms and technology conglomerate, is set to assemble his second $100 billion technology investment fund late this year or early in 2019.
  • The Guardian (Comment): Nationalisation of east coast mainline is the only viable option.
  • The Guardian (Comment): Carillion is no one-off scandal. Neoliberalism will bring many more.
  • Financial Times (Lex): Viacom: even with a modest turnround for the former media powerhouse, scale remains a problem.
  • Financial Times (Lex): Burberry: it takes a lot more than high prices to become a top luxury brand.
  • Financial Times (Lex): Tencent: beware of nervous politicians who could cut down Chinese internet groups to size.
  • Financial Times (Lex): Pandora: jeweller hopes new product range will help it sparkle but revenue growth will come at a cost.
  • Financial Times (Lex): Carillion/accountants: cosy arrangements that foster wrongdoing are rife.

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