Debenhams sinks over pension black hole fear

INVESTORS dumped Debenhams shares as it became the latest High Street stalwart to raise fears of a major pension black hole.

Experts warned that the retailer’s scheme may have swung from a £200m surplus to a £250m deficit. The company already spends £9.5m a year on its contributions.

Morgan Stanley yesterday cut its rating on the stock, though it added: ‘Given the lack of visibility on the underlying assets in the pension scheme, this assumption may turn out to be wide of the mark.’

Debenhams is set to report next week. In its last update it revealed a 0.2pc fall in underlying sales in the 15 weeks to June 11 due to weak clothing sales. Investors, jittery post-BHS debacle, sent shares 2.3pc, or 1.25p, lower to 53.95p.

The FTSE 100 fell further away from the record levels investors had been hoping for. It closed 0.9pc lower, or 66 points, at 6947.55.

Standard Life was among the biggest fallers of the day after it announced that the City regulator has asked it to conduct a review of annuity sales.

The Financial Conduct Authority is concerned that some annuity providers are not making customers aware they could be eligible for an enhanced annuity or that they might get a better deal by shopping around.

In a review of the industry, the FCA looked at 1,200 sales by seven providers and concluded that although there is no industry-wide issue with annuity sales, it did have concerns with a small number of firms when communications took place over the phone.

The watchdog said the failings at some firms were sufficient that they are now being asked to review all non-advised sales from July 2008. Standard Life is one of these companies. It will have to determine whether customers received enough information before making their decisions and may have to pay compensation if appropriate. Shares slipped 3.7pc, or 12.5p, to 324.6p.

With thousands of students now happily ensconced in another year of lectures, accommodation provider Unite Group announced plans for a new site. The student accommodation manager has secured planning consent for a development in Liverpool for 1,085 bedrooms. The site, which will cost around £70m, is set to open in time for the 2019/20 academic year.

Unite now has more than 5,000 beds in the pipeline to be delivered over the next three years. It already has sites in more than 30 university towns, providing digs for more than 46,000 students.

But shares were off yesterday despite the announcement, falling 1.7pc, or 10p, to 591p.

Elsewhere in the property sector, self-storage provider Lok’nStore rallied as it reported revenue had risen 4.1pc.

Group revenue was £16m in the year to July 31, the company said, with adjusted earnings up 10.8pc to £6.3m.

Lok’nStore said that like-for-like occupancy of its storage units was

up 2pc, while pricing had increased 2.2pc. The group has also seen strong growth in its document storage arm, with earnings up 125pc to £590,000 over the year.

Shares yesterday surged 2.3pc, or 8.5p, to 378.5p.

Interserve inched up after announcing a £37.5m three-year deal to provide facilities management to commercial property company Land Securities.

Under the agreement, Interserve will provide security, cleaning, waste management and customer service support at eight shopping centres. Shares advanced 0.7pc, or 2.5p, to 350.75p.

Luceco had an impressive first day of trading on the stock market.

The firm, which makes LED lighting products, floated at 130p a share – a price which valued the company at £209m.

The Telford-based business, which also employs around 2,000 people at a manufacturing site in China, supplies trade and retail businesses.

It counts Tesco, B&Q and Screwfix among its customers.

Shares closed their first day 15.4pc, or 20p, higher at 150p.