Influential City investors have put pressure on 15 major companies, including Royal Mail (RMG) and Just Eat (JE.), to improve workers’ pay. Legal & General Investment Management, Hermes EOS and BMO are among the investors which have written to chief executives and urged them to pay staff the so-called ‘real living wage’. This is higher than the Government’s national living wage, which stands at £8.21 per hour for over-25s and £7.70 for those aged 21 to 24. The real living wage, which is a voluntary scheme, is based on calculations of what people actually need to live on. This is estimated at £9.30 an hour across the UK for anyone over 18 and £10.75 in London. The push for better pay has stepped up since the financial crisis, with British workers being hit by slowing wage growth while pay for executives has surged.
Hobby specialist Hornby (HRN) is beginning to see the light at the end of the tunnel after enduring several years under poor management. The model train company and creator of Airfix models, which dates back to 1901, saw its revenue increase by 15% to £15.9m in the six months to September. As Hornby focused on pushing out new products, such as a Harry Potter train kit and an Airfix Hellcat fighter jet, its loss before tax narrowed to £2.4m from £3m during the same period last year. But the company is facing its eighth consecutive year in the red, and investment in new products pushed debt up from £1.7m to £8.4m. Hornby is hoping most of this should be paid off over the coming months following Christmas trading.
Shares in Virgin Money Holdings (UK) (VM.) have jumped over 22% after the group posted better than expected figures and showed shoots of growth. The shares have jumped even though the group, previously known as CYBG, unveiled a statutory pre-tax loss of £232million for the year to 30 September, up from £164million a year ago. The group has scrapped its plans to introduce a dividend for investors this year and taken a £385million hit from payment protection insurance payouts. On the dividend front, Virgin Money said its ‘progressive and sustainable dividend ambition remains and the Board will reconsider dividends for FY20 in line with normal practice.’
Go-Ahead Group (GOG) said revenues in this division grew by around 2.5% between June 30 and October 26, when compared with its performance during the same period of 2018. But difficulties integrating a bus company in Manchester and other trading hiccups forced Go-Ahead to lower its full-year expectations for that part of the business. Shares in the mid-cap transport group slid to 2208p. Its international and London bus arm sped ahead, with revenues up 8%. Go-Ahead also said it is in talks with the Government to extend its contract to run Southeastern rail beyond an extension it already has until March.
Johnson Matthey (JMAT) was trading lower after it was downgraded from ‘neutral’ to ‘underweight’ by analysts at JP Morgan, as they trimmed back their earnings estimates for the chemicals giant.
Gambling technology group Playtech (PTEC) was stung by a cut to a target number for its share price – from 550p to 390p by Morgan Stanley, hot on the heels of similar clips from Deutsche Bank, UBS and JP Morgan.
Liberum analysts cast a favourable eye on Genus (GNS) ideal price, raising it from 2800p to 3450p, as it said the pig and cattle genetics specialist will be in demand from the Chinese as they look to rebuild their pork industry, which has been decimated by disease and subsequent culls.
Longboat Energy Plc (LBE) is led by the former leadership of Faroe Petroleum, which was snapped up by Norwegian energy giant DNO for £640m in a hostile takeover in January. Shares in Longboat, which does not have any assets but is on the hunt for some, were priced at 100p but closed at 99.5p.
