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(Bloomberg) — While Frederick Barclay, the octogenarian British tycoon, waits to learn if he’ll be sent to prison for refusing to pay his ex-wife in their divorce, a memo from a London court hearing revealed that his advisers held talks to sell a 25% stake in the family businesses.

Barclay says he can’t pay the £100 million he owes to his former wife, Hiroko, after the breakdown of their 34 year marriage. All efforts to raise funds have been frustrated by his daughter and nephews who took control of the group after a fallout with Frederick’s late twin brother David.

The divorce suit and Hiroko’s attempt to enforce the award have offered a rare glimpse into the relationship between the highly secretive twins, whose joint investments put them among Britain’s most rich and powerful. They spent decades avoiding media attention by isolating themselves on a small private island in the English Channel. The fallout left Frederick in “shock,” Hiroko said in testimony.

Recent court cases have pushed into the public domain a deep family rift, punch-ups on yachts and bugged hotel rooms in London’s Ritz. Frederick even pleaded poverty and asked for government money to help fund his legal woes. 

The judge said he planned to deliver his ruling late Thursday.

The London committal hearing held earlier this week, raked over the assets held by Frederick’s side of the family that could be sold or called in to pay the debt. They ranged from his share of the freehold of the Channel Island of Brecqhou to £545 million of loan notes held in trust. A deal, however, for the 25% stake in the group businesses that include The Daily Telegraph newspaper, online shopping platform Very Group and delivery firm Yodel, would dwarf anything in terms of value.

In a meeting in May 2021, Barclay’s lawyers discussed negotiations for a sale of the stake held in a trust by his daughter Amanda. One of the advisers said David’s three sons, who jointly hold the controlling stake in the businesses would be the obvious buyer, according to the memo.

“All roads lead back to the cousins – either they would buy the trust’s 25% share, or a mutual buyer for assets and liquidity is found,” one unidentified trustee said.

David Barclay’s sons Aidan, Howard and Alistair, who are funding Frederick’s legal fees, declined to comment through a spokesman.

Of the cousins combined 75% stake in the group, Aidan is by some way the largest shareholder of the group, lawyers said. 

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(Bloomberg) — Nissan Motor Co. first quarter earnings beat estimates as the Japanese automaker dealt with supply chain snarls and surging raw material costs by focusing sales on more profitable models. 

Operating profit was 64.9 billion yen ($479 million) in the three months ended June 30, the Yokohama-based company said in a statement Thursday. That topped analyst estimates of 48.9 billion yen, according to data compiled by Bloomberg. Sales rose to 2.14 trillion yen, compared with estimates of 2.02 trillion yen.  

For more detail on the earnings, click here

“The business environment remained more challenging than expected,” Chief Executive Officer Makoto Uchida said in the statement. Production was constrained by Shanghai’s Covid lockdown and semiconductor shortages, while soaring materials prices also impacted earnings. However, it increased revenue per unit by focusing on quality of sales.  

The maker of Pathfinder SUVs and Altima sedans maintained its forecast for operating profit of 250 billion yen this fiscal year, up slightly from the 247 billion yen operating profit posted in the year ended March 31. Chief Operating Officer Ashwani Gupta said on a call that the company is confident of meeting its targets.   

“The guidance appears to conservatively reflect higher material prices and logistics costs, slow global retail unit sales growth, as well as an increase in R&D,” Bloomberg Intelligence analyst Tatsuo Yoshida said in a note before the earnings. “This leaves room for an eventual upgrade as vehicle production normalizes.” 

Nissan said it has received 23,000 orders for the Sakura, a mini electric vehicle that is only available in Japan. More than half the buyers are new customers, the automaker said. 

Nissan shares rose 3.7% in Tokyo trading Thursday before the results were released, paring this year’s decline to 5%. 

(Adds COO comment in fourth paragraph, orders for Sakura EV in seventh.)

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(Bloomberg) — BT Group Plc’s sales grew for the first time since 2017 after customers signed up to fiber optic connections and the London-based telecom group raised tariff prices above inflation earlier in the year.

However, shares fell as much as 5.7% after a weak performance at its Enterprise division, which sells connectivity and other services to businesses.

• Revenue in the first quarter rose 1% to £5.13 billion ($6.25 billion), roughly in line with £5.09 billion-pound average estimate of analysts surveyed by Bloomberg.
• BT posted adjusted earnings of £1.9 billion before interest, tax, depreciation and amortization, in line with analyst estimates.

Key Insights

• The fiber optic rollout and customer connections are “both ahead of our own expectations,” Chief Executive Officer Philip Jansen said, while flagging challenges in the Enterprise division.
• “Be under no illusion though, we need to pass our price increases that we’re experiencing on our cost base onto our customers, like every business. It’s a tough, very tough time,” he said on a call with reporters.
• Jansen added that “the market is softer than we would like across the large corporate space. So big projects, people moving away from the old stuff to the new, is not going as fast as we would like.”
• Analysts were quick to highlight BT’s challenges in its Enterprise unit, with Bernstein’s Stan Noel describing it as a “drag” in a note to clients on Thursday.
• Jefferies analyst Jerry Dellis wrote that “the promise of a second-half Enterprise recovery without greater clarity on the plan, and management’s ability to deliver this against the weak economic backdrop, leaves investors lacking adequate visibility at this stage.”
• BT said it’s got contingency plans in place for strikes from its biggest union due Friday and Monday, as workers demand a bigger pay increase to keep up with inflation.
• BT shares took a hit earlier in July after the news that chief rival Virgin Media O2 — owned by Liberty Global Plc and Telefonica SA — was in discussions about potentially acquiring major customer TalkTalk Telecom Group Ltd.

Market Context

• BT shares fell as much as 5.7% to 166 pence in London on Thursday. They were trading down 4.7% at 8:16 a.m., erasing gains made since the start of the year.
• Of the 25 analysts surveyed by Bloomberg, 14 rate the stock Buy, 8 Hold and 3 Sell.

Get More

• Statement
• Virgin Media O2 in Discussions to Acquire Rival TalkTalk
• BT CEO Faces Furious Staff in Town Hall, Says He Can’t Boost Pay
• BT Workers Vote in Favor of Firm’s Biggest Strike Since 1987

(Updates with additional CEO comments.)

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©2022 Bloomberg L.P.

(Bloomberg) — Orange SA reported revenues that declined the second quarter, showing ongoing competition in the telecom space in Europe that the company hopes to ease with a merger with Masmovil Ibercom SA in Spain.

The French carrier posted revenue of 10.71 billion euros ($10.9 billion) in the quarter, compared to a Bloomberg estimate of 10.74 billion euros, the company said in a statement on Thursday.

The company confirmed its outlook for the year, forecasting a 2.5% to 3% increase in earnings before interest, taxes, depreciation, amortization and leases. In the quarter, Ebitdaal rose 0.5% to 3.31 billion euros, compared to a 3.36 billion estimate from analysts. 

Newly appointed Chief Executive Officer Christel Heydemann plans to announce a new strategic plan for Orange at the beginning of next year. 

“This solid performance allows us to confirm our guidance for the current year, a milestone as we move towards the delivery of our 2023 commitments,” Heydemann said in the statement. “It also allows us to prepare for the future with confidence and responsibility as we work on our next strategic plan, which will be unveiled at the beginning of 2023.”

Last week, Orange and Masmovil reached an agreement to combine their Spanish businesses to create a $19 billion market leader, following exclusive merger talks announced in March.

Key Insights

• Orange is reducing its capital spending after an “exceptional effort these past years,” Chief Financial Officer Ramon Fernandez said in a call with reporters.
• Orange kept its projection for free cash flow of at least 2.9 billion euros in 2022.
• In France, its biggest market, the carrier posted 4.44 billion euros in revenue for the quarter, compared to a Bloomberg estimate of 4.47 billion euros. Sales decreased 2.7% in the country because of lower co-financing for its fiber network.
• Spain recorded a 4% decline in revenue, and is still Orange’s slowest growing geographic region.
• Orange has been struggling in Spain, currently one of Europe’s most competitive markets, with scores of different brands engaging into price wars. Regulatory approval could still result in significant remedies to clear the deal, limiting the benefits to merger parties.
• Africa remains Orange fastest-growing market, with a 7.2% growth of its revenue here in the first quarter.
• Orange is set to secure the renewal of its mobile network sharing deal with Iliad SA in France until 2025, the Orange CFO said.
• Enterprise revenues decreased by 1.1% in the second quarter, due to a decline in voice and data services, wage inflation and the war in Ukraine. “A plan will be unrolled in the coming months”, Fernandez said during the call.

Market Context

• Orange fell 3.4% to 9.82 euros in Paris trading at 9:16 a.m. Shares had gained about 8% since the start of the year in Paris through Wednesday. That compares to a 0.7% drop in the Stoxx 600 Telecommunications Index.

Get More

• Big Tech is Forcing Carriers To Invest in Networks: Orange CEO
• Orange-Masmovil M&A a Boon But Remedies May Test Synergy, Repair
• Canal Plus in Talks to Buy Orange’s Film, TV Units: Variety

(Updates with share price)

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(Bloomberg) — Volkswagen AG said an improving supply-chain situation and strong demand for vehicles bode well for the second half of the year, as the carmaker reported second-quarter results that beat expectations. 

Deliveries have recovered noticeably in recent weeks, VW said Thursday, joining Mercedes-Benz AG and rival Stellantis NV with solid predictions on car buying as the battle to secure enough semiconductors eases. While reporting robust earnings, VW is still reeling from the July 22 ouster of its Chief Executive Officer Herbert Diess, who will be replaced by Oliver Blume, the head of the company’s Porsche brand.

The company’s shares rose as much as 3.1% in early trading in Frankfurt. 

VW expects availability of cars across its premium and mass-market brands to improve, after it prioritized production of higher-end models as the supply jam curbed output. Since the start of the semiconductor crisis, the strategy has helped deliver strong returns for manufacturers, cushioning the blow from a slump in deliveries. 

Europe’s biggest carmaker, counting four CEOs since 2015, swapped out its leader after shortcomings in its software unit delayed important models like the Porsche Macan SUV. Blume, a former Audi trainee with a strong operational track record, will also need to navigate an increasingly brittle business environment plagued by Europe’s energy crisis and record inflation. 

The Cariad software unit made progress during the second quarter with updates of driver assistance features and new functions for lane changes and automated parking, VW said. 

While car demand is still outrunning supply, Volkswagen is pitching a listing of its prized Porsche brand into an increasingly gloomy economic outlook. The company has hired a dozen banks to push the share sale targeted for the fourth quarter, in what could become Europe’s largest IPO. Blume leading both VW and Porsche hasn’t thrilled potential investors already concerned about governance issues with a lack of independence for the sports-car maker from its parent company under current plans. 

Operating profit before special items, which included a partial reversal of hedging gains on commodity contracts, fell to 4.7 billion euros ($4.8 billion) for the three months ending June, compared with analyst forecasts of 4.1 billion euros. 

(Updates with share move in third paragraph)

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(Bloomberg) — Stellantis NV expects to overcome supply-chain snarls to extend strong earnings into the second half of the year as the maker of Jeeps and Fiats focuses production on its most profitable models.

Stellantis’s adjusted operating income margin came in at 14.1% in the six months through June, it said Thursday, comfortably beating analyst predictions. The automaker confirmed its forecast for double-digit profitability for the full year.

Stellantis and its carmaking peers have bolstered margins by raising prices and selling more high-end models in response to production curbs sparked by the chip shortage. Mercedes-Benz AG, which also sees double-digit returns this year, on Wednesday raised its outlook on the back of solid orders and healthy demand. Volkswagen AG earlier Thursday reported second-quarter results that beat expectations. 

“We’re very positive about the first half and see a continuation in strong performance going into second half,” Chief Financial Officer Richard Palmer said on a call with reporters.

Stellantis rose as much as 3.9% in Paris. The shares are still down about a fifth this year.

Stellantis confirmed its full-year outlook for a double-digit margin and positive industrial free cash flow, but significantly lowered its predictions for growth in several key markets. It now expects the wider European and North American markets to shrink 12% and 8% this year, after previously seeing a 2% decline and stable sales, respectively.

Chip Issues

The company’s global unit sales fell 7% to 2.93 million vehicles in the first half as persisting supply-chain issues including a shortage in semiconductors curbed production.

Scarcity of chips “will continue to be an issue for the industry through the end of the year,” Palmer said. “I think it’s improving but it’s a slow process.”

The executive took aim at what he called “bullish” forecasts of improvements in semiconductor supply in the second half of the year by some rivals, saying Stellantis has no evidence of that and will remain prudent. 

North America remained the company’s standout region with a margin of 18.1%, bolstered by the Jeep sport utility vehicle and Ram truck brands. Profitability was lowest in Europe, where shipments fell 18% and the margin came in at 10.4%. 

The company had just under 4 billion euros in extra costs in the first half of the year, including 3 billion euros from higher prices for raw materials. 

Stellantis is planning to plow 30 billion euros into electric cars and software, and has signed partnerships to generate extra revenue from software-driven features. In a shift in strategy on China, the automaker said this month it would halt Jeep production in the country and end a venture with a local manufacturer. 

 

(Updates with shares in fifth paragraph.)

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(Bloomberg) — Here’s the key business news from London-listed companies this morning.

Shell Plc: The energy giant posted yet another record profit this morning boosted by high oil and gas prices and will repurchase a further $6 billion of shares in the third quarter.

• It is the latest indication of how Russia’s invasion of Ukraine has delivered a windfall for investors in major energy producers, even as the soaring costs of fuel batters the economy and threatens a cost-of-living crisis

Barclays Plc: The British bank’s earnings fell short of forecasts in the second quarter after it booked charges and penalties in the US. 

• The lender took a £1.3 billion charge for litigation and conduct costs, partly to cover buying back U.S. investment products it mistakenly oversold

Diageo Plc: The global drinks giant reported a beat in full year net sales, with Johnnie Walker whiskey and Guinness beer doing particularly well.

• Price increases and savings on supply chains offset the “absolute impact” of cost inflation and mostly compensated for the impact on its gross margin

BT Group Plc: The British telecoms company’s sales grew for the first time since 2017 after customers signed up to fiber optic connections and it raised tariff prices above inflation earlier in the year.

• The rollout of fiber optic rollout and customer connections are ahead of the company’s expectations, Chief Executive Officer Philip Jansen said, while also pointing to challenges in the Enterprise division

Elsewhere: Energy company Centrica Plc resumed dividend payments for the first time since the start of the pandemic as profits from selling oil and natural gas rose six-fold.

• Broadcaster ITV Plc sees a return to pre-pandemic activity as it is on track to exceed 2019 revenues over the full year
• Financial derivatives dealer CMC Markets Plc is feeling the impact of high costs due to higher personnel costs as well as higher professional fees and software costs

Outside The City

UK households are likely to see record energy prices this winter as Russia clamps down on Europe’s gas supplies. Average power bills are set to rise to just over £500 per consumer in January, more than three times last year’s level, according to analysis from BFY Group Ltd. 

In Case You Missed It 

A fresh row over the Bank of England’s independence is brewing. Current foreign secretary and Tory leadership candidate, Liz Truss, insulted the Bank of England’s inflation-fighting record in a televised debate and named the Bank of Japan as a model to follow, while other MPs have questioned the central bank’s role and mandate. Listen to this week’s In the City podcast to hear Bloomberg News’s David Merritt, Lizzy Burden and Phil Aldrick discuss threats to the bank’s future.

Looking Ahead

With one of heaviest days of earnings this year out of the way, attention turns to a further deluge of company reports tomorrow when we’ll hear from miner Glencore Plc, pharma giant AstraZeneca Plc, and British Airways-owner International Consolidated Airlines Group SA.

Also on Friday Mortgage approvals data for June will be released, giving an insight into how the market is handling rising interest rates.

For a news fix when the day is done, sign up to The Readout with Allegra Stratton, to make sense of the day’s events.

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(Bloomberg) — BT Group Plc’s sales grew for the first time since 2017 after customers signed up to fiber optic connections and the London-based telecom group raised tariff prices above inflation earlier in the year.

• Revenue in the first quarter rose 1% to £5.13 billion ($6.25 billion), roughly in line with £5.09 billion-pound average estimate of analysts surveyed by Bloomberg.
• BT posted adjusted earnings of £1.9 billion before interest, tax, depreciation and amortization, in line with analyst estimates.

Key Insights

• The fiber optic rollout and customer connections are “both ahead of our own expectations,” Chief Executive Officer Philip Jansen said, while flagging challenges in the Enterprise division.
• BT said it’s got contingency plans in place for strikes from its biggest union due Friday and Monday, as workers demand a bigger pay increase to keep up with inflation.
• BT shares took a hit earlier in July after the news that chief rival Virgin Media O2 — owned by Liberty Global Plc and Telefonica SA — was in discussions about potentially acquiring major customer TalkTalk Telecom Group Ltd.

Market Context

• BT shares have risen 3.9% in the year to Thursday versus a 0.5% fall in the FTSE 100 Index.
• Of the 25 analysts surveyed by Bloomberg, 14 rate the stock Buy, 8 Hold and 3 Sell.

Get More

• Statement
• Virgin Media O2 in Discussions to Acquire Rival TalkTalk
• BT CEO Faces Furious Staff in Town Hall, Says He Can’t Boost Pay
• BT Workers Vote in Favor of Firm’s Biggest Strike Since 1987

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — The prospect of a less pugnacious Federal Reserve is encouraging bets that the crypto winter is closer to thawing.

Bitcoin rose as much as 2.9% on Thursday in Asia after a near-9% jump a day earlier, when the Fed raised rates by 75 basis points for a second month but signaled the pace of tightening will, in time, slow down.

The largest token was trading at $23,090 as of 1:25 p.m. in Singapore. So-called altcoins made bigger gains: Ether rose as much as 4.7% and Polkadot 9.3%.

Swaps tied to Fed meeting dates indicate markets anticipate a peak in borrowing costs around year-end and rate cuts in 2023 — which would be a friendlier backdrop for digital assets given they rely on the elixir of liquidity.

“The FOMC decision provided optimism that the end of tightening is in sight and that triggered a nice rally for risky assets that helped elevate cryptos,” said Edward Moya, senior market analyst for the Americas at Oanda. 

At the same time, similar bouts of post-Fed investor optimism in May and June quickly faded. Plenty of prognosticators remain skeptical the US central bank can ease up materially given inflation is the highest in a generation.

The potential for more blowups among crypto lenders and investors as well as harsher regulatory scrutiny following this year’s rout are among the other risks for virtual coins. Bitcoin has slumped 50% in 2022.

With the next Fed meeting not until September, “there may be some room for upside now,” said Mikkel Mørch, executive director at digital asset investment fund ARK36. But “that will be contingent on the strength of the dollar and the wider macro environment,” he said.

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(Bloomberg) — Orange SA reported revenues that declined the second quarter, showing ongoing competition in the telecom space in Europe that the company hopes to ease with a merger with Masmovil Ibercom SA in Spain.

The French carrier posted revenue of 10.71 billion euros ($10.9 billion) in the quarter, compared to a Bloomberg estimate of 10.74 billion euros, the company said in a statement on Thursday.

The company confirmed its outlook for the year, forecasting a 2.5% to 3% increase in Ebitdaal. In the quarter, Ebitdaal rose 0.5% to 3.31 billion euros, compared to a 3.36 billion estimate from analysts. 

Newly appointed Chief Executive Officer Christel Heydemann plans to announce a new strategic plan for Orange at the beginning of next year. 

“This solid performance allows us to confirm our guidance for the current year, a milestone as we move towards the delivery of our 2023 commitments,” Heydemann said in the statement. “It also allows us to prepare for the future with confidence and responsibility as we work on our next strategic plan, which will be unveiled at the beginning of 2023.”

Last week, Orange and Masmovil reached an agreement to combine their Spanish businesses to create a $19 billion market leader, following exclusive merger talks announced in March.

Key Insights

• Orange is reducing its capital spending after an “exceptional effort these past years,” Chief Financial Officer Ramon Fernandez said in a call with reporters.
• Orange kept its projection for free cash flow of at least 2.9 billion euros in 2022.
• In France, its biggest market, the carrier posted 4.44 billion euros in revenue for the quarter, compared to a Bloomberg estimate of 4.47 billion euros. Sales decreased 2.7% in the country because of lower co-financing for its fiber network.
• Spain recorded a 4% decline in revenue, and is still Orange’s slowest growing geographic region.
• Orange has been struggling in Spain, currently one of Europe’s most competitive markets, with scores of different brands engaging into price wars. Regulatory approval could still result in significant remedies to clear the deal, limiting the benefits to merger parties.
• Africa remains Orange fastest growing market, with a 7.2% growth of its revenue here in the first quarter.
• Orange is set to secure the renewal of its mobile network sharing deal with Iliad SA in France until 2025, Orange CFO said.
• Enterprise revenues decreased by 1.1% in the second quarter, due to a decline in voice and data services, wage inflation and the war in Ukraine. “A plan will be unrolled in the coming months”, Fernandez said during the call.

Market Context

• Orange shares gained about 8% since the start of the year in Paris. That compares to a 0.7% drop in the Stoxx 600 Telecommunications Index.

Get More

• Big Tech is Forcing Carriers To Invest in Networks: Orange CEO
• Orange-Masmovil M&A a Boon But Remedies May Test Synergy, Repair
• Canal Plus in Talks to Buy Orange’s Film, TV Units: Variety

More stories like this are available on bloomberg.com

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