Bankers under fire as and Funding Circle (FCH) flop on debut. Aston Martin, which was hoping to go for £5.1 billion, limped away from the starting line with shares falling 5% in early trading. This valued the company valued at £4.13 billion, likely to put it in the FTSE 250. Another closely watched float, Funding Circle, also dived on Wednesday after full trading began on the London Stock Exchange. Sceptics had criticised both companies for their optimistic valuations. Aston Martin and Funding Circle were both forced to slash the price range of their float after protests from fund managers. The disappointing debuts are embarrassing for the highly paid investment bankers who have the task of finding the right price for the company and make sure shares rise steadily on their debut. Aston Martin had 12 banks working on the deal: Lazard, Deutsche Bank, Goldman Sachs, JPMorgan Cazenove, Bank of America Merrill Lynch, Credit Suisse, HSBC Holdings (HSBA), UniCredit, CI Capital, Houlihan Lokey, Mediobanca and Numis Corporation (NUM). Funding Circle used Goldman Sachs, Bank of America Merrill Lynch, Morgan Stanley and Numis.
The City wasn’t impressed on Wednesday with Tesco (TSCO) boss Dave Lewis’s efforts to turn its fortunes around after its profits fell short of expectations despite strong sales. Britain’s biggest supermarket, which launched a discount store last month to compete with the likes of Aldi and Lidl, said operating profits were up 24% to £933 million for the first half of the year, but that was below analysts’ expectations of £978 million. The shares fell 6.3%, or 14.9p, to 220.3p compared with 361p five years ago.
Cantor has begun coverage of Rockrose Energy (RRE), setting a massive target price of 873p. It’s currently trading at 500p. RockRose recently announced the completion of the acquisition of Dyas BV – which adds a portfolio of production assets in the Netherlands. This is one company that could have got its timing spot on. It floated in January 2016 and the company wasted no time, completing five deals since its inception. When it floated oil was at a low of $27 dollar, and fortunately for the firm oil has climbed steadily back to above $80 per barrel.
Ramsdens Holdings (RFX) – The pawnbroker said it expects its jewellery business to deliver double-digit sales growth in the first half, though it warned its foreign exchange segment was hurt as Britons opted for “staycations” during the warm UK summer. The company said its profit for the six months through September was expected to be in line with its expectations.
Yellow Cake bound higher after the uranium storage company said the value of its physical uranium had increased by 29.6% since its flotation. Yellow Cake plc (YCA) quick out of the block, having been tipped by our minnows column. Yellow Cake floated this summer and used the $200 million raised to buy 8.1 million pounds of the radioactive material. According to the management, should uranium prices rise then so will Yellow Cake’s share price and visa-versa.
Ethical investment campaign group ShareAction on Wednesday joined the voices raising concerns about Unilever (ULVR) plan to relocate its HQ to the Netherlands. The group said “institutional investors are right to be speaking up” ahead of a vote this month by shareholders in Marmite maker Unilever’s Dutch and UK entities.
