BUSINESS LIVE: Domino's firm to file for bankruptcy in Russia

Just before close, the FTSE 100 was up 0.05% to 7,265.73.

Meanwhile, the FTSE 250 was 0.70% down at 17,970.49.

GAM has called on a major investor group to ‘accept the realities’ of its financial position as it reiterated the call for shareholders to back Liontrust’s acquisition bid.

The Swiss fund manager warned that, should the proposed takeover fail, it will need a cash injection four times greater than what is currently on offer from a rival investor group in order to survive.

The boss of US banking giant Citigroup is reportedly considering a break up of the lender’s biggest division in a major shake-up.

The plan would see the bank’s Institutional Clients Group (ICG), which provides financial services to institutional investors and governments, split into its three primary business segments.

They say you should build when the market is down. One company taking that axiom to heart is Ondo InsurTech.

Ondo, if you didn’t guess by the name, is an insurance technology company and the creator of a cute little gadget called LeakBot.

LSL Property Services, the owner of estate agents Your Move and Reeds Rains, has agreed to buy mortgage adviser network TenetLime for up to £12.9million.

TenetLime, which is based in Leeds, operates a network providing services to 231 mortgage and protection advisers and arranged £3.9billion in mortgages in 2022, LSL Property said.

TenetLime will be integrated with LSL’s mortgage adviser, Primis, and is expected to ‘deliver synergies and enhance the group’s margin’, according to LSL.

The deal, which is subject to approval by the City watchdog, includes an initial payment of £5.6million, followed by a further £4.5million and an expected £2.8million payment for assets which form part of TenetLime’s regularatory capital.

It comes just weeks after LSL warned annual profits will be substantially lower than previously forecast as rising interest rates hit mortgage lending and homebuying.

Chief executive David Stewartsaid:

I’m delighted we have been able to complete this transaction and I look forward to welcoming TenetLime’s advisers to our Primis Network. The increase in membership will help us to further invest in our service offering to member firms as well as delivering scale economics to support further growth.

The acquisition also underpins our leading position in the mortgage and protection network market and is fully aligned with our group strategy to develop our Financial Services Network business.

At least half of retirees are missing out on hundreds of pounds of interest each year by keeping their money in savings accounts paying less than 3 per cent.

Savers over retirement age are particularly prone to leaving money in lower-interest accounts, according to online pension provider PensionBee.

Holiday companies and consumer groups have written a letter to the Prime Minister calling for the aviation watchdog to be given the power to fine airlines.

They want the UK Government to announce a bill at the upcoming King’s Speech in November granting the Civil Aviation Authority stronger powers to punish air carriers for poor customer service.

Companies have become more secretive about pay offers, adding to signs of a possible cooling of the jobs market, new research suggests.

Just over half of UK job postings are now published without advertised salaries for the first time since records began in 2016, as employers find it easier to fill positions, according to jobs search site Adzuna.

The housing market is in a deep mid-summer freeze, with viewings last month falling off a cliff.

The average number of viewings per property has fallen 98 per cent compared to August 2022, according to Propertymark, the leading membership body for estate agents.

(PA) – Broadcom’s proposed purchase of VMware would not substantially reduce competition in the supply of server hardware components in the UK, the industry regulator has said.

The UK’s competition watchdog has cleared the largest deal in its history as it said that the tie-up of US companies Broadcom and VMware would not damage UK competition.

The $69billion (£54billion) deal – the largest the Competition and Markets Authority (CMA) has ever investigated – raises “no competition concerns”, the regulator said.

It cleared the deal after an in-depth investigation which considered several areas where there had been some concern.

Broadcom makes computer chips, while VMware is a cloud technology company. The CMA had looked at whether by owning VMware, Broadcom would be able to spy on its competitors who used VMware services.

It assessed whether rival chipmakers would have to share commercially sensitive information with VMware to ensure their chips work with VMware’s software.

But the watchdog said that “this is unlikely to be a concern, in particular since information about new product adaptations only needs to be shared with VMware at a stage when it is too late to be of commercial benefit to Broadcom.”

Crest Nicholson has downgraded its annual earnings forecast following a significant slowdown in the UK housing market over the summer.

The Surrey-based housebuilder now expects to report an adjusted pre-tax profit of £50million this year, down from previous estimates of £73.7million.

House prices have fallen at their steepest pace for August since 2018 as sellers try to attract interest amid a cost of living squeeze and soaring interest rates.

Average asking prices fell by 1.9 per cent compared with July according to figures from property website Rightmove.

It meant the typical house was on the market for £364,895 – down from £371,907 a month earlier. Prices also fell, by 0.1 per cent, compared to the same month last year – the first year-on-year drop in asking prices since 2019.

Housebuilders top the fallers’ list this morning amid rising concerns about the housing market after a profit warning by Crest Nicholson and weak house price data.

Average new seller asking prices fell by 1.9 per cent this month to £364,895, the biggest fall in August since 2018, according to Rightmove.

Meanwhile, housebuilder Crest Nicholson warned of lower profits after seeing transaction levels across the industry weakening further in recent weeks, sending shares down almost 11 per cent.

Taylor Wimpey, Redrow, Persimmon and Vistry were the other top fallers, with shares down between 2 and 3 per cent.

Russ Mould, investment director at AJ Bell, said:

Weak house price data is hardly a surprise. Economic uncertainty is elevated, mortgage costs have gone through the roof and the Help to Buy scheme has come to an end.

However, Crest Nicholson’s profit warning has laid bare the scale of the impact of a housing slowdown on the housebuilding sector.

Sales of new homes have plunged alarmingly and, while not all developers in the space are created equal, the news, allied to Rightmove’s latest reading on the property market, has had a knock-on effect on share prices in the rest of the sector this morning.

The Domino’s Pizza franchise operator in Russia will file for bankruptcy for its business in the country amid an ‘increasingly challenging environment’.

DP Eurasia, which also owns the chain’s franchise in Turkey, Georgia and Azerbaijan, said it was abandoning previous plans for a sale of its DPRussia business and would exit the country.

Charlie Huggins, Manager of the Quality Shares Portfolio at Wealth Club:

‘Today’s profit warning from Crest Nicholson suggests rising interest rates and higher mortgage costs are really starting to bite.

‘Crest Nicholson has seen trading conditions worsen significantly over the summer months. This means group pre-tax profit for the year is expected to come in around a third lower than previous expectations.

‘The cost of borrowing has rocketed, and this has led to fewer homebuyers upsizing and to fewer first-time buyers. The end of the Help to Buy scheme has compounded these pressures, making it even harder for first-time buyers to get onto the housing ladder.

‘The housing market is on very shaky foundations. Although inflation appears to be moderating, the Bank of England is expected to tighten the screw further in the coming months. As such, it seems unlikely that trading conditions for Crest Nicholson or its peers will improve any time soon.’

Victoria Scholar, head of investment at Interactive Investor:

‘European markets have opened cautiously higher. After hitting near 5-month lows on Friday, the FTSE 100 is staging modest gains with BP towards the top of the index as underlying oil prices rise amid tightening supply which is offsetting sluggish demand.

‘Housebuilders are at the bottom of the blue-chip index after Crest Nicholson sharply downgraded its profit outlook for the year. In Germany, producer prices fell by 6% year-on-year in July, the first drop since November 2020.

‘China surprised the markets by opting for more modest-than-expected rate cut. It lowered its one-year benchmark lending rate by 10-basis points and kept its five-year rate unchanged, despite forecasts for a 15-basis point reduction in the two.

‘Nonetheless its one-year loan prime rate is now at a record low of 3.45%. Chinese stocks slumped to a nine-month trough, and the yuan continues to suffer. The US 10-year treasury yield hit the widest level against its Chinese equivalent since 2007.

‘All eyes will be on the Jackson Hole central bank symposium in Wyoming later this week for clues into the future path for interest rates.’

The FTSE 100 is on to break a losing streak, rebounding from six-week lows hit in the previous session, as a rise in energy stocks drive the blue-chip index into positivity territory.

However, the FTSE 250 is down again as housebuilders fall on disappointing industry data and earnings.

Data from website Rightmove showed asking prices for homes in Britain fell sharply this month, as rising mortgage costs caused sellers to lower their expectations of what they can get for their properties.

It was the biggest monthly fall for August since 2018 and twice as steep as the usual summertime fall.

Crest Nicholson has tumbled 14.4 per cent after the housebuilder lowered its annual profit expectations.

Oil and gas stocks have added 1 per cent on a bounce in oil prices, as global supply was tightening with lower exports from Saudi Arabia and Russia.

(PA) – Travel companies and a consumer group are urging the Prime Minister to take “decisive action on behalf of British holidaymakers” by enabling the aviation regulator to fine airlines.

In a joint letter to Rishi Sunak, they called for the King’s Speech on November 7 to include a Bill focused on strengthening the Civil Aviation Authority’s (CAA) ability to enforce breaches of consumer rules.

Among the signatories were holiday companies loveholidays, On the Beach, Riviera Travel and Thomas Cook, consumer group Which? and travel business organisations the Association of Independent Tour Operators and Advantage Travel Partnership.

Thousands of flights to and from UK airports have been cancelled this summer due to issues such as air traffic control restrictions and wildfires on Rhodes and other Greek islands.

Many affected holidaymakers claim airlines have ignored their legal responsibilities during disruption, which can include booking customers a ticket with a rival airline so they reach their destination as quickly as possible, and providing meals and overnight accommodation.

The letter to Mr Sunak stated: “As a coalition of consumer advocates and travel companies, we urge you to show your support for British holidaymakers affected by this summer’s air travel disruption by agreeing to strengthen the Civil Aviation Authority’s (CAA) enforcement powers through this autumn’s King’s Speech.”

The National Trust has come under pressure from the grandson of one of its biggest donors over its relationship with Barclays – and the bank’s links with the fossil fuel industry.

Dominic Acland said his grandfather Sir Richard Acland, an environmentalist who gave his 17,000-acre ancestral estates to the charity in 1944, would have been ‘horrified that the National Trust is banking with Barclays’.

The number of jobs in the UK financial services industry has hit a record high – in a sign that much of the gloom about the sector has been misplaced.

City minister Andrew Griffith said it showed the industry was ‘a jewel in Britain’s crown that even the doomsters cannot deny’.

British housebuilder Crest Nicholson has lowered its annual profit expectations in the wake of challenging trading conditions as high interest rates and sticky inflation drove homebuyers away.

The FTSE 250 housebuilder said transaction levels across the industry weakened further, particularly in recent weeks, as mortgage borrowing turned more expensive.

‘The group does not therefore expect to see a material improvement in trading conditions before its year end at 31 October 2023,’ it said.

The company now expects full year adjusted profit before tax to be around £50million.

London-listed master franchise for Domino’s Pizza , DP Eurasia, which runs operations in Turkey, Russia, Azerbaijan and Georgia, will file for bankruptcy of its Russian business.

The group said: ‘With the increasingly challenging environment, DPRussia’s immediate holding company is now compelled to take this step, which will bring about the termination of the attempted sale process of DPRussia as a going concern and, inevitably, the Group’s presence in Russia.

‘A bankruptcy petition of DPRussia will be filed in accordance with the relevant statutory requirements in due course.’