Government cuts stake in NatWest, Dechra profits hit by challenging trading

London open

The FTSE 100 is expected to open flat on Monday, having closed up 0.19% on Friday at 7,756.87.

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The UK government has cut its stake in NatWest Group to 38.6% via a £1.26bn off-market buyback deal. NatWest will buy 469,200,081 shares at 268.4 pence each, the closing price on May 19. The government previously held 41.4% in the bank.

Dechra said in an update on Monday that, while customer demand remained strong, its trading environment had been more challenging than expected, particularly in the US and UK markets. As a result, its full-year underlying operating profit would be less than £186m. The FTSE 250 company said it was also currently in discussions with EQT over a possible all-cash recommended offer, but remained restricted in providing further guidance during the offer period.

Newspaper round-up

The owner of Ladbrokes, Entain, has been accused of “dishonest” lobbying after it funded an operation mobilising people to complain to their MP about proposals to change gambling laws. The government last month unveiled plans for tighter regulation, including measures it said would make gambling safer but would also reduce revenue for brands such as Coral and PartyCasino, owned by Entain. – Guardian

The cheapest rail tickets can no longer be bought from all station booking offices, as passengers are forced to use machines or shop online for the best fares. Rail bosses have begun barring ticket office staff from selling advanced fares, in a reversal of reforms designed to make it easier for passengers to buy the cheapest tickets. – Telegraph

Britain's tax system is riddled with "perverse" incentives and punishing levies that must be reformed to make work pay, the head of a powerful parliamentary committee has warned. Harriett Baldwin, Conservative chairman of the Treasury Select Committee (TSC), said "horrible cliff edges" in the current system had left many questioning whether an extra hour of work was worth it. – Telegraph

The new chief executive of Rolls-Royce has delivered another damning critique of its performance, saying that one of its core divisions has been “grossly mismanaged”. Tufan Erginbilgic, 63, took the top job at the aerospace and engineering group at the start of this year and weeks later infamously described the group as a “burning platform”. In his latest broadside, the former BP executive took aim at the performance of its power systems division, which makes diesel and gas engines for use in superyachts, trains and mining lorries, and for back-up power generation. – The Times

The owner of Wagamama is facing pressure to split itself up, with its embattled management team expected to be questioned about pay and performance at the annual meeting this week. TMR Capital has become the latest investor to call for an overhaul of The Restaurant Group, after taking a small stake this month. The Florida-based hedge fund has approached the group, which also owns Brunning & Price, Frankie & Benny’s and Chiquito, with proposals to sell off all its businesses except Wagamama, according to The Sunday Telegraph. The fund wants the group to expand Wagamama before taking it private in a sale. – The Times

US close

Stocks on Wall Street closed in negative territory on Friday, with the Dow Jones Industrial Average down 0.33% at 33,426.63.

The S&P 500 lost 0.14% to 4,191.98, and the Nasdaq Composite was off 0.24% at 12,657.90.