Daily Express - 02.09.2019

Daily Express Monday, September 2, 2019 49

DX1ST

++THE SHARE HUNTER++NICHOLAS HYETT++HARGREAVES LANSDOWN++

stock currently offers a prospective

yield of 8.2 per cent. Investors are

worried cash could dry up at short

notice.

Putting the investigation to one

side, the key near-term test is

whether the order book can return to

growth over the next six to 12

months.

notable wins this half, especially in

the North Sea, but not enough to

offset work that’s been completed.

We suspect a Serious Fraud Office

investigation is a major factor behind

the failure to pick up more business.

Management comments suggest

that’s especially true in the key

Saudi Arabian and Iraqi markets,

where Petrofac’s actions are under

particular scrutiny.

Petrofac could face a significant

fine were it found to be at fault. T

hat probably explains why the

crept up and margins have held up

well, the order book shrunk by

$1billion (£820million) in the first half

of the year.

In the short term, a dip in oil prices

and series of lower-margin contracts

in the core construction businesses

are the more significant headwinds.

But the smaller order book may exert

pressure on revenues from 2020.

If management are to get things

moving in the right direction, it’s vital

the group starts to reel in new

business. There have been some

NICHOLAS HYETT

EQUITY ANALYST

Hargreaves Lansdown

http://www.hl.co.uk

OIL & gas engineer Petrofac

designs, builds, maintains, and in

some cases even operates, oil & gas

facilities. That exposes it to the ups

and downs of the oil market.

When oil prices are low, oil & gas

producers tend to cut investment,

which hurts companies like Petrofac.

The good news is that the oil price is

relatively buoyant at the moment.

Coming after a long spell of

underinvestment, that should be

good news for new projects and the

engineers who oversee them.

Unfortunately, Petrofac has so far

missed out on the extra spending.

While an impressive operational

performance means revenues have

Shrinking order book a headache for Petrofac

best-performing stocks in

the retail sector.

The group has shifted

strategy to focus on its core

offering. This included clos-

ing the under-performing

Worldstores and Kiddicare

websites to centre efforts on

its own online operations.

The introduction of a new

digital platform is also

underway.

China, Japan, South Korea

and Brazil. The letter went

on: “Connectivity, both in

terms of destinations and

frequencies, matters – more

so for an island nation – and

will be essential to the suc-

cess of the UK as we near

Brexit, and look to maintain

European trading links and

strike out to new and emerg-

ing markets.”

ter. Last year, the group

made a profit of £93.1mil-

lion before tax.

As the company returns

to profit growth, investors

will be hoping for a small

bump to the dividend from

28.6p to around 29.7p.

In the year to date,

Dunelm’s shares have

surged by more than 68 per

cent, making it one of the

figures wrote that the duty

is the highest aviation tax in

Europe and the highest rate

in the world for long-haul

flights, making it too expen-

sive for many routes to be

operated from Britain’s

airports.

They said Germany’s

comparable tax is around

half of the UK’s, and it has

more direct connectivity to

INVESTORS will be hoping
for a sunny outlook from
home retailer Dunelm this
week as it reports full-year
numbers on Wednesday.
Annual pre-tax profits are
expected to be at the higher
end of a previous guide of
£124million to £126million,
after the group benefited
from a spate of favourable
weather in the fourth quar-

Hot weather boosts outlook for Dunelm

AIRLINE bosses have urged

Chancellor Sajid Javid to cut

air passenger duty to help

make a success of Brexit.

The chief executives of

Easyjet, Ryanair and British

Airways’ parent company

IAG were among those who

have signed a letter to the

Chancellor warning that the

tax is “holding back UK

connectivity”. The senior

Airlines in demand for aviation tax cut

“This article is designed for investors who make

their own decisions without advice, if unsure

whether an investment is right for you, you

shouldseek advice. Shares can rise and fall in

value so you could get back less than you invest.”

What the

Sunday

papers say

SUNDAY EXPRESS

BRITAIN’S economic growth

is faltering, with even the pow-

erhouse service sector strug-

gling, closely watched indica-

tors are expected to show this

week.

NAKED WINES shareholders

will be asked to approve the

£95million sale of Majestic

Wines to Fortress Investment

Group on Friday.

SHAREHOLDERS in Merlin

Entertainment are expected to

approve the £6billion sale of

the Madame Tussauds and

Alton Towers operator to the

Danish family that owns Lego.

SUNDAY TIMES

SIR PHILIP GREEN is laying

the groundwork for a break-

up of his Arcadia Group high

street empire by separating

the various brands so they can

be sold over time.

SUNDAY TELEGRAPH

DEBENHAMS has drafted in

advisers at Deloitte in case a

legal challenge against its res-

cue plan is derailed, poten-

tially pushing it into

administration.

OBSERVER

MARKS & SPENCER will

almost certainly drop out of

the FTSE 100 this week, end-

ing the retailer’s non-stop

presence since the index of

leading shares was launched

35 years ago.

ness rates system. Bosses from compa-

nies such as Asda, Sainsbury’s and

Marks & Spencer called for “funda-

mental” reforms to the tax.

Meanwhile, Tesco has been quietly

accumulating support from other

retailers for a proposed online sales tax

to balance the playing field between

physical and digital operators.

Altus Group’s head of UK business

rates, Robert Hayton, joined the calls

to shake up the system.

“With major retail and hospitality

businesses reducing their estates and

headcount often citing high level of

rates as a contributory factor, I urge

the Chancellor to take the bold and

ambitious step of being the first

Chancellor to freeze the multiplier

since the national business rates sys-

tem was introduced in 1990,” he said.

It is not just high street shops and

supermarkets that are likely to feel the

weight of higher rates.

Pubs are set to shoulder an extra

£16million and restaurant rates will

increase by £12million. Hotels will

have to fork out another £17.8million.

Offices will also face a rise of almost

£156million and factories will be pay-

ing an extra £87million.

Mr Hayton said: “It would be a posi-

tive message to business from the

Johnson administration and a real

statement of intent post-Brexit. It

would help all other sectors too, such as

manufacturing, which is also hurting.”

Firms unite over shake-up

in face of £660m rates rise

BUSINESSES are facing an increase of By Alys Key
more than £660million to rates bills
next year, as companies band together
to ask the Government for an over-
haul of the system.
Firms are likely to have their busi-
ness rates increased by 2.1 per cent in
line with the expected September
inflation rate, which would result in a
total increase of £662.15million,
according to calculations by real estate
adviser Altus Group.
The September Consumer Prices
Index measure of inflation, which will
be released in October, determines by
how much the tax paid by businesses
on the properties they occupy will
increase.

The annual increase will come into
effect in April 2020.
According to Altus, the consensus
estimate of a 2.1 per cent increase
would be an additional burden of
£170million on the retail sector.
It comes after some of Britain’s big-
gest retailers wrote to the Chancellor
in mid-August, asking for the
Government to fix the “broken” busi-

STEPPING STONE: Customers who smoke say they vape to try to quit

135 stores across the country.

VPZ director Doug Mutter

said: “Our customer

engagement tells us that most

smokers want to quit.

“We have decided to take

positive action and establish

our own support service

throughout our growing store

network with an offer that

allows every smoker to try

vaping.”

RETAILER VPZ ‘TO HELP SMOKERS QUIT’

BRITAIN’S biggest vaping

retailer has attacked support

available to smokers trying to

quit and said it is investing to

help address the issue.

VPZ said it is set to launch a

support service in its stores to

help smokers turn from

cigarettes for good. It believes

vaping used to wean smokers

off cigarettes can “help tackle

the problem”. The retailer has

Edited by DAVID SHAND
email: [email protected]
Visit City & Business pages online at
http://www.express.co.uk/city
Tel: 020 8612 7156 City&Business

‘A freeze would be a

positive message to

business and a real

statement of intent’