Section:GDN 1N PaGe:27 Edition Date:190730 Edition:01 Zone: Sent at 29/7/2019 20:40 cYanmaGentaYellowb
Tuesday 30 July 2019 The Guardian •
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FTSE 100 All share Dow Indl Nikkei 225 £/€ £/$
1.2229-0.0147 -0.0158Woodford investors frozen out until
December as suspension extended
Sean FarrellInvestors in Neil Woodford’s main
investment fund are likely to remain
trapped until early December, after its
suspension was extended while hold-
ings were sold to pay for customer
withdrawals.
The administrator of the Wood-
ford Equity Income Fund , Link Asset
Services , said yesterday that it would
probably take a further four months
before the £3.5bn vehicle was able to
reopen. The fund was suspended on
3 June and Woodford stands to make
about £8m in fees from investors if it
stays shut until early December.
Investors are furious that Wood-
ford, once seen as a star stock picker,
is continuing to take fees for manag-
ing the equity income fund while their
money is locked up. Withdrawals and
poor performance reduced the size ofthe fund to about a third of its peak of
more than £10bn.
In a statement to investors on his
website, Woodford said: “I under-
stand the frustration, inconvenience
and anxiety the continued suspension
of the fund will be causing you and I
am extremely sorry for putting you in
this situation.”
Woodford said the fees of about
£65,000 a day were needed to pay
wages and other costs while he shifted
the fund into big publicly traded com-
panies and away from unsuccessful
listed investments, such as the estate
agent Purplebricks and hard-to-sell
privately held businesses. The fund
entered a downward spiral in May as
investors unnerved by its poor per-
formance withdrew their money,
culminating in Kent county council
trying to cash in its entire £263m.
Link said: “The suspension of deal-
ing is likely to last until early December
while we implement the strategy tore position the portfolio in order for
the fund to be re opened at that time.
In our view, this is a realistic amount of
time for Woodford to complete a meas-
ured and orderly repositioning of the
fund’s portfolio of assets.”
It also emerged yesterday that
Woodford had sold 1.75m shares in the
listed fund that he manages, Wood-
ford Patient Capital Trust , between 3
July and 8 July. At the average share
price between those dates, the sale
would have made him just under £1m,
Reuters calculated.
Woodford, who told the fund’s
board about the share sale on 27 July,
said he needed the money for a tax bill
and other commitments. The Patient
Capital Trust is one of several managed
by his company, Woodford Investment
Management.
He said he was forced to sell the
shares after taking no income or
dividends from Woodford Invest-
ment Management and blockingSports Direct
under fi re from
analysts and
investors over
results chaos
Sarah Butler and Julia KolleweMike Ashley’s Sports Direct has been
labelled “an embarrassment to UK
corporate governance” following the
chaotic announcement of its annual
results last week, including multiple
delays and the shock revelation of a
€674m (£614m) tax bill.
Investors and analysts pointed to
revelations of a poor performance at
Sports Direct’s core chain, a string of
ill-advised acquisitions, the exit of
several senior executives and a £5.35m
pay award to Ashley’s future son-in-
law as evidence of a company with
poor governance controls.
“This company is an embarrass-
ment to UK corporate governance,”
said shareholder advisory fi rm Pirc
in a statement. “ Years of ineff ective
chairing seem to have taken their toll,
and the company veers from one mis-
take to the next.”
Pirc said independent shareholders
had to “use everything they’ve got to
push for better governance” as “ this
farcical behaviour has gone on for far
too long ”.
Shares in the retail group dived
by more than a quarter at one pointthan 10 hours late on Friday revealed
that Sports Direct was struggling amid
tough trading conditions on the high
street. The delay was caused by the
sudden arrival of a €674m initial bill
from the Belgian authorities, relating
to VAT charges on goods moved within
the EU. Sports Direct has 35 stores and
two warehouses in Belgium.
Sports Direct defended its handling
of the matter after the stock market
closed yesterday. The company said it
received notice of the tax bill at midday
on Thursday and contacted its lawyersimmediately. It did not receive fur-
ther details of the demand until 11pm,
meaning its auditor Grant Thornton
had to update its audit the next day.
Logistics experts said the VAT bill
could relate to either the movement of
goods between there and the retailer’s
main distribution centre in Shire-
brook, Derbyshire, or online sales.
The company has reassured inves-
tors the bill was unlikely to result in the
full amount falling due within a year.
But some analysts said a £54.6m oper-
ating loss at House of Fraser, whichSports Direct bought for £90m nearly
a year ago, only compounded diffi cul-
ties at the group’s UK sports stores,
where sales fell 1.6%. The company
admitted its relationship with brands
was “currently challenging”, despite
eff orts to improve the look of its stores.
“The home truths about the core
Sports Direct business were pretty
shocking and management seems to
be out of ideas,” said analysts at bro-
kerage Peel Hunt.
“Whilst Sports Direct may have
done all the likes of Nike and Adidas
asked them to do in the fl agship stores,
the premium product that maybe it
was expecting as a consequence has
not emerged. And it doesn’t sound like
that is about to change. Sports Direct
now seems to be strategically snook-
ered, check mated and clean bowled.
The shares are hard to value, but are
surely only for the very brave.”
David Cumming , head of UK equi-
ties at Aviva Investors, said yesterday:
“Sports Direct is almost a case study in
failed corporate governance.”
He said Ashley “has obviously got
retail talent – or had retail talent”, but
the fi rm had “lost its way”.yesterday as the market responded
to a rambling statement put out after
the market closed on Friday which
included a warning that Sports Direct’s
House of Fraser chain had “terminal”
problems. The stock recovered most
of its losses by the close of trading to
fi nish down 6.5% at 214.8p.
Annual results published moreWoodford’s share sale, it had decided
to publicly release the information.
Woodford is left with 1.25m shares
representing 0.14% of the Patient Cap-
ital Trust.
A spokesperson for Woodford said:
“Neil remains invested in WPCT and
completely committed to the early-
stage asset class and its long-term
investment potential.”
Woodford Patient Capital Trust has
an independent board whose job is to
act in the interests of shareholders.
The board also revealed yesterday that
it was considering replacing Wood-
ford as the fund’s portfolio manager
after receiving approaches from other
potential candidates.
The board said: “Whilst the board
remains confi dent in the portfolio
manager’s commitment to WPCT and
the current day-to-day management
of the portfolio, the board intends to
engage with a broader range of third-
party managers in order to undertake
a full assessment of all potential man-
agement options, which may or may
not lead to a change in the company’s
management arrangements.”
If the board replaces him it will be
a further blow to the reputation of the
UK’s most famous fund manager.
Shares in Woodford Patient Capital
Trust, down almost 40% this year, fell
4.3% to 51p yesterday.▲ Mike Ashley leads a factory
tour. Analysts say Sports Direct
management is out of ideas
PHOTOGRAPH: DARREN STAPLES/REUTERSSource: RefinitivYesterday Sports Direct share
price fell to 214.8p
Share price, pence2015 2016 2017 2018 2019200300400500600700800withdrawals from the equity income
fund. The explanation from Wood-
ford’s company to the board for selling
his Patient Capital Trust shares said:
“Whilst a reluctant seller, between 3
and 8 July Mr Woodford sold 1.75m
of his WPCT shares ( about 60% of his
holding). The sole reason that he did so
was in order to meet personal fi nancial
obligations, including a tax liability.”
The board said that although it
was not strictly required to disclose▲ Neil Woodford has sold 1.75m
shares to pay taxes and other billsРЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS