BUSINESS LIVE: TRG to sell loss-making unit of Frankie & Benny

AstraZeneca boss Sir Pascal Soriot has privately told friends and trusted advisers that he plans to leave the biggest company in the FTSE 100, The Mail on Sunday understands.

He has had one of the most successful careers in the history of British business, leading the development of one of the first Covid-19 vaccines and fending off a major takeover bid from US rival Pfizer.

Richard Hunter, head of markets at Interactive Investor:

‘UK markets led the way with moderate returns on a risk-oriented approach. Mining stocks benefited from early buying interest despite a mixed picture in Chinese demand, while insurers rose on broker upgrades that boosted Prudential, Aviva and Legal & General.

‘There was also some cautious interest in the beleaguered housing sector.

‘Domestically, there will be some important economic data this week, with both unemployment and GDP figures due later in the week.

‘The UK economy remains in balance, with tepid growth continuing to face the pressures of a higher interest rate environment and weak consumer confidence.

‘The FTSE250 has tended to bear the brunt of the cautious outlook, falling almost 2%, while the FTSE100 has found tepid support, limiting its gains to just 1% so far this year.’

Aarin Chiekrie, equity analyst at Hargreaves Lansdown:

‘Vistry’s overall performance has been impressive given the challenging environment for UK housebuilders, and the group has today announced a major change in strategy. Vistry’s plans to shift its business to focus exclusively on its more defensive, high-yield Partnerships business, which focuses on affordable housing.

‘This means that Housebuilding will be fully absorbed into Partnerships by the end of the second half, freeing up capital to strengthen the balance sheet and help fund shareholder returns, as well as the continued growth of the Partnerships division.

‘It’s fair to say that the Residential Division has been stuttering of late. Recent interest rate increases have reduced affordability for buyers, causing private sales figures to fall and completions to decline as a result. That’s no surprise, though, as residential construction is a notoriously cyclical sector.

‘In contrast, Partnerships’ revenues tend to be more robust: the need for more affordable housing does not disappear because economic conditions look difficult. This results in large projects with a fixed volume, which should hold up better in a recession.

‘Partnerships, which included a contribution from the recently acquired Countryside for the first time, saw the number of deliveries almost triple in the first half of the year to 3,203. Cost savings from the acquisition are progressing well and will help maintain the underlying full year pre-tax profit guidance intact, which is expected to be in excess of £450 million.”

John Lewis is set to report another loss this week as new CEO Nish Kankiwala unveils his first set of results since taking over at the struggling retailer.

Britain’s largest employee-owned company, which also includes department stores John Lewis and grocer Waitrose, has been hit hard by a triple whammy from the pandemic, rampant inflation and pressure on the cost of living. Kankiwala is expected to announce lower losses in the six months to July, compared to the £99m deficit in the same period a year ago.

Vistry Group will merge its affordable housing ‘Partnerships’ activities with its housing construction activities.

The homebuilder told investors about its plans and maintained its annual profit forecast, buoyed by resilient demand in the low-cost housing segment.

Vistry, one of the UK’s largest housebuilders in terms of homes built annually, posted an adjusted pre-tax profit of £174 million for the six months ended June 30, compared with £189.9 million a year earlier.

BMW will announce plans to build its next-generation electric Mini in Oxford after securing a government funding package.

The multi-million investment by the German-headquartered manufacturer to transform its existing factory will secure 4,000 high-quality jobs, according to ministers.

Government sources declined to detail the level of taxpayer support offered to BMW, but did not dispute the previously reported figure of £75 million.

The Restaurant Group has agreed to sell its loss-making leisure business, which includes the Frankie & Benny’s and Chiquito brands, to Cafe Rouge owner Big Table Group.

TRG will pay £7.5 million to Big Table as part of the deal.

Andy Hornby, CEO of TRG, said:

“A sale of our Leisure business significantly accelerates our medium-term strategic plans to increase Adjusted EBITDA margins and reduce debt.

‘On behalf of TRG, I would like to express our enormous thanks to the exceptionally hardworking and dedicated teams across the leisure sector who have made huge improvements to the customer proposition in recent years. We wish them all the best as part of the Big Table Group.”