Terry Murden: Bob’s timing results in red faces

TESCO’S chief executive Philip Clarke is promising an overhaul of its troubled UK operations, which account for two-thirds of its profits.

After last week’s profits warning he also needs to restore the company’s reputation hitherto as Britain’s flagship retailer. So he wasn’t helped by the tale of Tesco Bob.

Noel “Bob” Robbins, Tesco’s UK chief operating officer, sold 5 per cent of his shares on 4 January at 404.51p – saving him about £44,000 that he would have lost if he had sold them on Friday, when they closed at 316.8p following the dire Christmas trading update.

Tesco blamed the share price fall on Thursday on the profits guidance for the year ahead, rather than the Christmas update, and said the shares sale was approved by Clarke and was within the regulations governing share dealing. It added that Robbins, whose position is below board level, was “not in possession of any price-sensitive information at the time the sale was approved”.

However, while the shares trade was within the rules, its timing coincides with the availability of market data showing the UK business has been suffering. It’s also another embarrassment for a company that for years has been a darling of the stock market and now has to win back the loyalty of investors.

Bonus pressure on banks rises

IT WILL soon be bonus time, and Lloyds Banking Group chief executive Antonio Horta-Osorio has put pressure on his counterparts by waiving his entitlement to a payout expected to be worth £2.4 million.

There are particular reasons for his decision. Two months’ absence as a result of insomnia and exhaustion as well as a poor performance by the bank hardly qualified him for a big reward, but he’s done what will be regarded as the decent thing at a time when the clamour for bonuses to be canned altogether has hardly been greater.

The other banks are not giving much away about their plans, but as things stand, Stephen Hester at RBS is in line for as much as £2.4m, while Bob Diamond at Barclays would get £3.4m and Stuart Gulliver at HSBC £4.8m.

A benchmark of a different kind was set in the US by JP Morgan, which started the reporting season by indicating its investment banking staff will continue to get substantial bonuses, albeit on a smaller scale. It will provide UK bank bosses with more ammunition in their battle with the government over the need to retain significant incentives.

Muller Dairy gets the cream

WISEMAN Dairies looks to be heading into German hands at a price that some would see as opportunistic.

The shares rose 34 per cent on Friday to close at 327.5p following the announcement that talks were under way with Muller Dairy. But they are still short of the 350p of a year ago, and well below their value in September 2010 when they were trading above 500p.

That’s when the rot set in following a profits warning. Last November the East Kilbride firm suffered a 42 per cent slump in half-year profits, which has seen the shares plunge below 250p.

Some may doubt the wisdom of acquiring a business with such tight cost pressures, and of the decision by the Wiseman brothers to sell at this price. But Muller is bulking up, and Wiseman may need its muscle to retain market leadership in the UK. It looks like a good fit.