Sunday newspaper round-up: Home Retail, strong pound, Lloyds Banking Group

27th Jul 2014 18:00

Home Retail Group is considering a sale of its £1.5bn Homebase DIY chain, the Mail on Sunday said. Home Retail wants to concentrate on its core Argos business under new group Chief Executive John Walden, who turned around Argos in the previous two years. Stronger sales and profitability at Homebase have helped bolster the case for a sale amid a company-wide review. City dealmakers are circling to win work on the potential sale and a decision could come in the next few weeks.Diageo, Rolls-Royce and BAE Systems are among companies that will this week report profits hit by the high value of sterling, the Sunday Times and Sunday Telegraph said. The strong pound and weaker global growth are expected to have knocked billions of pounds off sales at some of Britain's biggest multinationals. Currency movements caused more than a fifth of the 137 profit warnings posted in the first half of 2014, figures from EY show. Currency fluctuations triggered just 3% of profit warnings last year. Other companies hit by the strength of sterling include GKN and Merlin Entertainments.The UK Government could sell off its remaining stake in Lloyds Banking Group as soon as October, the Mail on Sunday reported. The bank wants the earliest possible date for a sale but the vote on Scottish independence is one of the hurdles that needs to be overcome. Other obstacles include the Bank of England's stress tests on banks and whether Lloyds can convince regulators to let it restart paying a dividend.Profits at Lloyds Banking Group are expected to rise by a quarter despite another £500m charge to pay compensation to customers wrongly sold payment protection insurance (PPI), the Sunday Times said. Bad debts at the taxpayer-backed bank are expected to have halved in the first half, sending profits to £3.6bn. The paper said the strong results could add to calls for a breakup of Lloyds and other banks.Warm weather in the UK has reduced profits at British Gas, adding to pressure on its parent company Centrica, the Sunday Times said. Britain's biggest energy supplier is forecast to report a 25% drop in profit for the first half on August 1st. Centrica already faces a competition inquiry and the departure soon of its long-term Chief Executive.Centrica will have a showdown with its regulator this week when the British Gas owner reports a fall in profits as Ofgem suggests energy companies are making bumper profits, the Sunday Telegraph reported. The numbers from the watchdog will be fuel to the fire of critics who want energy companies to cut prices in line with wholesale costs.The Government will this week offer large parts of the UK for fracking development in a bid to lure energy companies to invest in shale oil and gas exploration, the Sunday Telegraph said. The Department for Energy and Climate Change will launch the so-called 14th onshore licensing round inviting companies to explore parts of the country not yet exposed to fracking. It could lead to fracking taking place in half of the UK, proving controversial.Premier Oil has lured Richard Rose, head of investor relations at rival Ophir, to be its new Finance Director, the Sunday Times said. The appointment could be announced as soon as July 28th and is the first big decision by new Premier Chief Executive Tony Durrant, who was the oil company's finance chief before becoming the boss last month. Ophir tried twice to buy Premier in April but was rebuffed.Retail veterans Archie Norman and Allan Leighton could be appointed as the new Chairman of Morrisons, the Sunday Telegraph said. Others in the running include former Tesco director John Gildersleeve, who chairs British Land, and John McAdam, who chairs Rentokil Initial and United Utilities. The paper said efforts to find a replacement for Sir Ian Gibson, who will leave next year, were at an early stage but that Morrisons was under pressure to demonstrate an improvement in performance.Carillion's Chairman Philip Green is tipped to lead the board of the company when it combines with Balfour Beatty. The Sunday Times said Green was likely to lead the board even though his Chief Executive, Richard Howson, is expected to be the boss of the merged group. Normally the top jobs are divided when a merger takes place but Balfour Beatty lacks a chief executive.The Fifa World Cup has helped fuel an increase of about 10% in first-half profits at ITV, the Sunday Times said. The broadcaster's dividend is expected to rise from 1.1p a year earlier to as much as 1.4p. The healthy results coincide with talk that the company could be bought by a US suitor as media companies look for merger partners.Rolls-Royce's first-half profits are expected to fall by a quarter because of tough defence markets and the unfavourable timing of orders for aircraft engines, the Sunday Times said. The company issued a profit warning in February as it felt the squeeze on national defence budgets, especially in the US. The company has told shareholders to expect profits to be weighted towards the second half.Standard Chartered will hold an important board meeting this week as the bank tries to ward off calls for its Chairman or Chief Executive to quit. The Sunday Times said big investors such as Temasek, Legal & General and Aberdeen Asset Management have asked for clearer succession planning for when Chief Executive Peter Sands leaves. A fourth investor has told the paper it is pushing for Chairman Sir John Peace to quit because he also chairs fashion company Burberry.The Spanish owner of Luton airport is drawing up plans for a £7bn flotation that would be the biggest in Europe this year, the Sunday Telegraph said. Aena Aeropuertos has hired a roster of top investment banks to advise on the planned float, in which the Spanish Government would sell almost half its holding to new shareholders.SF