Sports Direct International PLC (LON:SPD) chairman Keith Hellawell could be forced to step down at the retailer’s annual general meeting (AGM) after another shareholder said it would vote against his re-election.
Fidelity International, one of the biggest shareholders in Sports Direct with a 6% holding, has joined the revolt against Hellawell.
The shareholder also plans to vote against the re-election of senior independent director, Simon Bently, who is seen as a possible replacement chairman.
Fidelity joins Hermes Investment Management, Royal London, Aberdeen Standard Investments and Legal & General Investment Management in rebelling against Hellawell.
Institutional Shareholder Service, Glass Lewis and Pirc have all recommended shareholders vote against his re-election
Hellawell has promised to step down if he fails to gain shareholder support at the next AGM.
He failed to secure the support of independent shareholders at last year’s AGM but was spared after chief executive, Mike Ashley, used his majority voting rights to keep him on as chairman.
Ashley, who owns 62% of Sports Direct, will not attend this year’s AGM due to “conflicting demands for his time in other areas of the business”.
Sports Direct also faces a possible shareholder revolt over its share buyback plan. Aberdeen Standard Investments will oppose more share buybacks on concerns that they give too much power to Ashley.
Away from Sports Direct’s dramas, housebuilders will be in focus with Barratt Developments PLC (LON:BDEV) and McCarthy & Stone PLC (LON:MCS) reporting their full year earnings and Berkeley Group Holdings PLC (LON:BKG) publishing a trading update.
Barattt Developments to exeed market forecasts
Barratt should offer little in the way of surprises at its full year results having already said it expects profits to beat market forecasts.
In a detailed trading update in July, the housebuilder said pre-tax profit in the year to 30 June is anticipated to increase to £765mln from £682.3mln, ahead of analysts’ estimates of £699mln-£740mln.
Home completions reached the highest level in nine years at 17,395, compared to 17,319 last year. The average selling price of home grew 5.9% to £275,000 from £259,000.
“The market will be interested to hear if average selling prices have continued to rise and whether market conditions in London remain weak,” said Graham Spooner, investment research analyst at The Share Centre. “Investors will also focus on any signs that the company is still cautious about buying further land for development, as has been the case for some time.”
The housing market has slowed following the Brexit vote but demand for homes remains supported by low borrowing costs, low unemployment and the government’s Help to Buy scheme.
McCarthy & Stone boosted by retirement housing demand
Retirement housebuilder McCarthy & Stone said in its most recent trading update in July that underlying trading conditions remained stable even though it experienced a slowdown in sales momentum shortly after the UK general election.
In the trading update for the period from 1 March 2017 to 4 July 2017, it said the market for retirement housing remained strong as it reported an increase in average selling prices and a rise in the total forward order book. The group also said reservation rates have remained broadly in line with the prior year despite a lower number of new sales releases this year.
New FTSE 100 member Berkeley reports trading update
Berkeley Group, which has been promoted to the FTSE 100 in the index’s latest quarterly reshuffle, will update the market on how well it has fared since reporting a robust full year performance in June.
At the full year results, the group said forward sales at the year-end were down 16% but earnings for the current year were set to be at least level with last year.
Berkeley repeated its earnings guidance for at least £3bn of pre-tax profit in the five years to April 2021 but cautioned about greater uncertainties going forward.
Neil Wilson, chief market analyst at ETX Capital, said there is a concern about a decline in Berkeley's new starts in London following the Brexit vote.
On the wider-sector, Wilson said a number possible hazards include an easing in house price growth, a shortage of skills to meet build programmes, stalled planning reforms, the prospect of an interest rate hike and the end of the government's Help to Buy loan scheme past 2021.
"Whilst there are risks to the growth in housebuilders, key fundamentals remain very supportive and investors have poured back in since taking fright after the EU referendum," he added, citing low borrowing costs, good mortgage availability, rising demand, a supply shortgage of homes and Help to Buy.
Significant events expected:
Trading update: Berkeley Group PLC (LON:BKG)
Finals: Barratt Developments PLC (LON:BDEV), Diurnal Group PLC (LON:DNL), McCarthy & Stone PLC (LON:MCS)
Interims: Faron Pharmaceuticals PLC (LON:FARN), Harworth Group PLC (LON:HWG), Loopup PLC (LON:LOOP), PPHE Hotel Group PLC (LON:PPH), Somero Enterprises Inc (LON:SOM), Vectura Group PLC (LON:VEC), WANdisco PLC (LON:WAND), Xaar PLC (LON:XAR)
Traffic figures: easyJet PLC (LON:EZJ)
Economic data: BRC UK shop price index; US balance of trade; US ISM non-manufacturing report