Metro Bank founder leaves, and Ashley takes shot at Goals

“Sterling and UK-focused stocks, including banks like Royal Bank of Scotland, took a step back on Wednesday morning as Westminster yet again failed to deliver clarity on Brexit.

“The second reading of the Withdrawal Agreement Bill may have been passed but MPs put a spanner in the works by failing to agree to Boris Johnson’s timetable. It now looks very unlikely the UK will leave the EU on the scheduled date of 31 October,” says AJ Bell Investment Director Russ Mould.

Metro Bank

“After a troubled period for the business, Metro Bank founder Vernon Hill is out. As he exits as chairman with immediate effect, investors will hope his parting words that “the best is yet to come” prove more prophetic than the ambitious promises made back at the company’s IPO in 2016.

“Having founded the bank in 2010, Hill had unsurprisingly come under increasing pressure this year after a big accounting error and a failed bond issue. The decision to make him emeritus chairman (a purely honorary role) may be an attempt to salve a bruised ego.

“The company’s emphasis on customer service, including offering things like bowls of dog biscuits, extended opening hours, and branches in central locations, helped it stand out.

“And for some customers this was ideal but, for one thing it costs a lot of money and for another, an increasing number of people just want fast convenient online banking.

“The company may have raised funds at the second attempt to shore up its capital position earlier this month but it will be interesting to see if Hill’s departure leads to a change of approach for the business going forward.”

Sports Direct

“Sports Direct boss Mike Ashley might have his strengths but subtlety is not one of them. Having dropped his takeover of five-a-side football operator Goals Soccer Centres overnight he has launched a furious tirade against its management.

“Sports Direct claims that the Goals board attributed the accounting problems which contributed to the suspension and ultimately the cancellation of its listing on AIM to just one person – something which it dismissed as impossible – and accused them of ‘skulduggery’ and failing to engage properly with the takeover.

“For Goals part, it has denied seeking to frustrate the bid and the ‘accelerated’ sale process looks set to continue.

“Like Debenhams earlier this year, this is another example of Ashley apparently being thwarted in his takeover ambitions despite being the largest shareholder and the company in his crosshairs apparently being in an extremely weak bargaining position.

“Ashley may be proving to be his own worst enemy, perhaps proving that you catch more flies with honey than you do with vinegar.

“It also brings into question a seemingly scattergun approach to buying assets in the retail and sports space.”

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