BUSINESS LIVE: TSB profits plummet; mobile network licence fees revised; SThree suffers from hiring slowdown

Shares in rat-catcher Royal topped the FTSE 100 rankings as it emerged as a takeover target.

Rentokil Initial, which won pest control contracts at Buckingham Palace in the 1960s, has been in the spotlight following reports at the weekend that former BT boss Philip Jansen is preparing a £15bn operation.

According to the Sunday Times, he is raising private equity funding for a deal that will make him chief executive.

A couple of years ago, my partner James and I were driving along a winding country road in North Norfolk in the middle of summer. The sun was beating down and I was looking forward to reaching our destination so I could jump into the sea.

So I was furious when, as we approached a junction, a huge farm vehicle loaded with hay pulled into our path, forcing us to slow to a crawl.

The FTSE 100 is trading lower this morning as copper miners weigh heavily on the market, following lower copper prices, while positive company updates help stem declines.

Industrial metals miners led the decline, falling 1.7 percent, with heavyweights Rio Tinto and Glencore down more than 1 percent each, while copper prices came under pressure from growing concerns about prolonged weakness in Chinese demand.

The sector has reached its lowest level since early April.

Auto and auto parts shares also fell 1.6 percent, with Dowlais Group, TI Fluid Systems and Aston Martin each down more than 1 percent, after German automaker Porsche AG cut its sales and profitability outlook.

Shares of energy and precious metals mining companies fell 0.5 percent and 0.6 percent, respectively.

On the FTSE 250, SThree rose 3.5 per cent after announcing its half-year results.

Compass gained 3.2 percent after the catering group raised its 2024 profit and revenue forecasts for the second time this year despite price cuts.

Beazley rose 2.2 percent after the insurer said it had no plans to alter its forecasts in the wake of Friday’s global computer outage.

Investors’ attention is focused on Wall Street giants such as Alphabet and Tesla, which will publish their quarterly results after the close on Tuesday.

U.S. gross domestic product figures and inflation data due later this week could shed more light on the path of the Federal Reserve’s monetary policy.

Politics continued to make headlines in the United States after Vice President Kamala Harris secured the delegate support needed to become the Democratic nominee after President Joe Biden dropped out of his re-election bid.

Mitie has almost doubled the value of its security and cleaning work since this time last year after winning new contracts with the likes of British Airways, Aldi and the Home Office in recent months.

The outsourcing firm said the total value of its contracts was £2bn for the three months to June 30, up from £1.1bn a year earlier, with new contracts and extensions with Lloyds Bank, NHS Property Services and insurer Royal London.

Mitie is one of the UK’s leading outsourcing companies, specialising in facilities management. It also undertakes work such as removal, waste disposal and maintenance of parts of the electricity network.

In a first-quarter update, Mitie said revenue rose 10 per cent year-on-year to £1.2 billion, while net debt doubled to £182 million, “as we pay our supply chain for the increased volume of project works.”

It also won a military contract to maintain British Army bases in Germany, helping boost revenues for its central government and defence arm by 4.3 per cent to £217m.

It is a major blow to the City and a boost to the LSE, which has suffered an exodus of companies recently.

The Business Secretary said yesterday he was confident Royal Navy warships would be built in Belfast, despite ruling out a government bailout for troubled manufacturer Harland & Wolff.

Jonathan Reynolds said there was a “very substantial risk of taxpayers’ money being lost” if such a bailout went ahead.

English winemaker Gusbourne has practically been put up for sale.

Conservative peer Lord Ashcroft, who owns a 67% stake in the business, has told the board he wants to “explore a number of strategic options for his involvement”.

Labour will “demand” a £3.6bn takeover of Royal Mail by a billionaire nicknamed the Czech Sphinx, the Business Secretary said yesterday.

Jonathan Reynolds said he had no objection in principle to the postal service having a foreign owner, but added that the deal would be reviewed closely. He said he planned to hold talks with the potential buyer, Daniel Kretinsky, this week.

UK recruitment firm SThree has reported a 7 per cent drop in fees in the first half of the year amid slow hiring conditions only partly offset by cost control measures.

“As we enter the second half of the financial year, market sentiment remains broadly unchanged. Commitment to new projects is taking longer, resulting in new business activity remaining subdued,” the recruitment firm said in reiterating its full-year outlook.

The firm, which recruits for the finance, energy, banking, pharmaceutical, engineering and technology sectors, reported a 7 per cent drop in comparable net fees to £188.7m for the six months ended May 31.

Britain’s communications regulator is set to launch a review of annual licence fees charged to mobile network operators for use of three bands of mobile spectrum.

This follows a request from telecoms giant BT, which asked Ofcom to investigate the matter.

Ofcom said: ‘BT has written to Ofcom to request a review of the annual licence fees (ALF) we charge for the 1800MHz spectrum.

‘We have reviewed BT’s application and consider that the evidence suggests that a tariff review is warranted.

‘As a result of the similarities in the formula we use to establish ALFs, we have decided to begin a review of all ALFs we currently charge’

TSB’s profits fell by almost a quarter in the first half of the year as the bank, owned by Spain’s Banco Sabadell, warned of “challenging” conditions in the mortgage market amid higher interest rates.

The bank posted pre-tax profit of £111.6m, down 24.5 per cent from the previous year, while revenue fell 6.1 per cent to £548.7m.

Revenue was hit by lower mortgage margins due to “challenging” market conditions, while TSB also paid significantly more interest to its saver customers.

Robin Bulloch, TSB CEO, said: ‘Our aim in 2024 is to make banking with TSB simpler and easier, and I’m delighted to see more customers choosing TSB.

“We continue to make good progress on our strategy and I would like to thank everyone at TSB for their continued efforts to support our customers and communities, helping them feel more secure with their money.”