Kingfisher’s DIY skills show room for improvement 20 Sep 2017 The power drill-to-paint retailer’s first-half pre-tax profit beat expectations – welcome for a company that has lost a fifth of its value since May due to a messy business transformation. In a supposedly recession-proof sector, Kingfisher’s woes are largely self-inflicted.
Paris fashion IPO will struggle for luxe valuation 18 Sep 2017 SMCP, the French owner of the Sandro and Maje labels, is planning a listing. Pitched between luxury and the high street, the Chinese-owned group has sales growth and an efficient supply chain to rival retail leader Zara. But its smaller size and high debt will weigh on its worth.
Lure of scale drives Axa asset management union 15 Sep 2017 The insurer may seek a partner for its European fund arm, Bloomberg reports. Joining forces with French rival Natixis would create a European giant with assets of more than 1.5 trln euros. The threat to margins from low-cost passive investments makes cost savings unavoidable.
Vivendi legal slap exposes folly of Italian push 14 Sep 2017 The French media group effectively controls Telecom Italia despite having only a 24 pct stake, a watchdog ruled, meaning Vivendi may have to consolidate 25 bln euros of its debt. TI has been plummeting in value too. Vincent Bolloré, who chairs Vivendi, has no good options.
EU foreign investment review raises bar for China 13 Sep 2017 Brussels has proposed a pan-European scheme to vet sensitive purchases by other countries. Unlike the U.S., rulings will be non-binding. Even so, the People’s Republic will find it harder to buy up EU infrastructure and technology. It’s another reason for Beijing to open up.
Hadas: EU single economy eases way for separatism 13 Sep 2017 Catalan and Scottish nationalism have bubbled up recently. Besides sentiment, the European Union has played a part. The super-national single market not only provides economic protection, but opens up a new vision of sovereignty. It’s the same idea Brexit fans have rejected.
Campaign for euro zone budget is a distraction 13 Sep 2017 The single currency area needs a way to absorb future economic shocks. But comments from European Commission chief Jean-Claude Juncker show that a common tax-funded budget would be a stretch. Better to tweak fiscal rules, deepen financial reform and beef up Europe’s bailout fund.
Ad world’s bling days may be over 13 Sep 2017 The likes of WPP, Omnicom and Publicis risk a low-growth future. Revenues are stagnant and they are over-exposed to slow-growing developed economies. Agencies may be forced to copy the austerity already practised by their consumer-goods clients and pay more attention to margins.
Ten years on, UK banks still far from utility-like 13 Sep 2017 A decade after the run on Northern Rock, British lenders are smaller and better capitalised. But earnings remain bumpy and subdued economic growth means they will struggle to lift earnings. An average dividend yield of 4 pct compares poorly to genuinely safe and boring utilities.
Draghi and Carney’s FX headaches have similar cure 6 Sep 2017 ECB chief Mario Draghi has too little inflation while the Bank of England’s Mark Carney has too much. Currency moves are compounding the problem for both central bankers. Their best hope of fighting unwanted shifts is to convince traders that policy will adapt to such swings.
Rebooted UK-French software merger rewards patience 5 Sep 2017 After two botched attempts in as many years, French industrial group Schneider and UK software maker Aveva are trying to hook up again. The $3.9 bln deal is as complex as it is financially alluring. With past glitches ironed out, the merger has a good chance of becoming reality.
Macron may be French unions’ new best friend 5 Sep 2017 The French president’s labour reforms will give firms more scope to bargain directly with their workers, rather than submit to industry-wide agreements. That will fan demand for training in employment law. The odd side-effect could be increased trade union membership.
Drahi’s U.S. adventure may end with a fizzle 4 Sep 2017 Telecoms magnate Patrick Drahi wants to expand his Altice group’s U.S. arm by buying other cable firms. The sector’s low margins could appeal to the famed cost-cutter. But larger companies, like $117 bln Charter, are out of reach. Drahi may have to make do with smaller fare.
Vivendi still looks like a one-legged stool 1 Sep 2017 The French group delivered better than expected revenue in the first half. But most good news still came from music label Universal. TV unit Canal Plus remains a drag on growth despite signs of a turnaround. Chairman Vincent Bolloré gets little credit for his integration efforts.
Macron’s labour reforms are a gutsy start 31 Aug 2017 Changes such as greater bargaining freedom for employers will make the economy a bit more dynamic. The symbolism is as important. Introducing a highly unpopular cap on unfair dismissal payouts shows President Emmanuel Macron is willing to reform at the expense of poll ratings.
Carrefour’s ills demand Tesco-like revamp and more 31 Aug 2017 The French supermarket said full-year operating profit could fall 12 percent, partly due to stiff competition at home. The grocer’s new CEO faces even more challenges than Tesco’s Dave Lewis did three years ago. Domestic market share is shrinking and its online offering is weak.
Consumer giants’ disclosure is near sell-by date 25 Aug 2017 Firms that make food and personal-care products are pouring money into startups and young brands. Unilever, the most acquisitive, has made 15 such deals since 2014. Yet they don’t give investors enough information to judge their dealmaking nous. It could be their loss.
Accounting revamp does European banks a favour 25 Aug 2017 Changes that come into force in 2018 will force lenders to provision for bad loans in a new way. Banks say earnings will be more volatile as a result. Perhaps at the outset. But the switch will also make them safer and lower their cost of capital over the economic cycle.
Telecom Italia breakup is a three-way tug of war 24 Aug 2017 Government ministers are talking about separating Telecom Italia from its network. A breakup could be beneficial for the Italian government, and TI’s biggest shareholder Vivendi. Other shareholders would be harder to satisfy.
Total gives Maersk a crude $7.5 bln exit from oil 21 Aug 2017 The Danish conglomerate will get a 3.8 pct stake in French energy major Total in return for its oil assets. While the price looks good, Total’s stock has underperformed Maersk’s. At least Maersk investors may retain exposure to the rich synergies Total is predicting.