Lender’s fall casts doubts over fintech. London’s attempt to become a magnet for new technology companies has suffered a setback as shares in one of the capital’s homegrown “unicorns” lost nearly a fifth of their value before their official market debut today. Shares in the peer-to-peer lender Funding Circle (FCH) dropped more than 20% at points yesterday during conditional dealing as investors appeared to bail out of the stock days after it completed a £1.5 billion flotation.
Unilever (ULVR) investors ‘risk being barred’ from vote over Dutch move. The trade association for investment management firms has said it is “deeply troubled” by the prospect of some Unilever retail investors being disenfranchised over the company’s plans to relocate to the Netherlands. The Personal Investment Management and Financial Advice Association (Pimfa) said it had raised concerns with the government, the Financial Conduct Authority and the London Stock Exchange over individual shareholders potentially not being able to vote on October 26 on the proposals.
The Serious Fraud Office has suffered a setback after admitting defeat in its attempt to force a British mining company to hand over documents that it believed could reveal alleged financial wrongdoing within the business. A month on from a Court of Appeal ruling overturning a judgment that forced Eurasian Natural Resources Corporation (Assd GBP Cash) (ENRA) to disclose documents prepared on its behalf by lawyers and forensic accountants, the SFO has said that it will not be pursuing the matter further.
Royal Dutch Shell ‘B’ (RDSB) is to make its biggest investment in more than three years after approving a $14 billion-plus project to export liquefied natural gas from Canada. The Anglo-Dutch energy giant and its partners said they would begin construction immediately on the LNG Canada export terminal in Kitimat, which will super-cool cheap gas from British Columbia so that it can be shipped to meet booming demand in Asia. The project is Canada’s first LNG export plant and the biggest new LNG terminal to get the go-ahead anywhere since 2014, before oil and gas prices crashed.
Royal Mail (RMG) shares have closed at their lowest level since flotation as the investor sell-off extended into a second day. The company’s shares ended down 8.4% at 358½p, close to the 330p they were issued at in 2013 when the government privatised Royal Mail.
The boss of Ferguson (FERG) made clear that his priorities lie outside the UK after the company’s full-year results showed that its domestic business continued to struggle while its American division powered ahead. John Martin, chief executive of the FTSE 100 plumbing and heating equipment distributor, said yesterday that California was “three times as important as the UK”, and Florida and Texas were each two times as important. Mr Martin’s comments underscore Ferguson’s shift away from the UK market, which now accounts for about 5% of its trading profit, to the US, which accounts for about 90%.
St James’s Place (STJ) is taking up to 39 times more in client fees than it passes on to the star fund managers on which its business model is based, according to a study. Across its 36 proprietary funds, SJP collected £926 million in fees from clients over a year, but only £247 million was then passed on to the third-party asset managers that do the actual stockpicking.
Glaxosmithkline has eased restrictions on payments to doctors introduced after a bribery scandal in China. The pharmaceuticals company said it planned to allow payments to practitioners who speak about the “new science behind selected GlaxoSmithKline (GSK) products, their associated diseases and clinical practice in promotional settings”, including national meetings, speaker training meetings and GSK meetings. It will also pay “reasonable” travel costs for healthcare professionals, except in the US, to attend a GSK-organised meeting to “learn about data and clinical expertise”. Glaxo tightened its policies in 2013. It was fined about £300 million by China the following year after being found guilty of paying bribes to boost sales of medical products. The company is one of the world’s biggest pharmaceutical companies and is valued at £75.9 billion on the London stock market.
The flooring and furniture retailer SCS Group (SCS) has reported a rise in operating profits of more than 10 per cent despite taking a hit on concession sales at House of Fraser. SCS said that it had made an operating profit of £13.2 million, up by 10.5%, in the year to July 28. This was on revenue that rose from £333 million to £337.3 million during the same period. On a statutory basis, SCS’s pre-tax profit rose from £11.9 million to £13.2 million. The profits represent a solid performance at a time when rivals such as Carpetright are struggling and after a downturn in sales in its concessions at the struggling House of Fraser, which represented 7.1 per cent of SCS’s £352.3 million gross sales last year.
Revolution Bars Group (RBG), which owns 76 bars across the UK, has suffered a fall in like-for-like sales and gone into the red after warm summer weather and England’s run to the World Cup semi-finals lured customers to pubs with beer gardens and TVs instead. Like-for-like sales fell 0.6% in the 12 months to the end of June, with a 1.9% increase in the first half offset by a 5% drop in the second half of the year. Revolution’s bars do not have big screens or significant outside areas, meaning they missed out on the boost that many pubs enjoyed.
Burford Capital (BUR) burst into the market to raise £193 million in a share placing as its rival Vannin Capital prepares to float. Existing institutional investors understood to include Woodford Investment Management and Invesco Asset Management, as well as new shareholders, took the chance to buy some of the 10.4 million shares issued at £18.50 per share – a 7% discount to the prior day’s close. Its shares have risen almost 60% since the start of the year amid appetite in the London legal market for third-party litigation funding. Christopher Bogart, chief executive of Burford, was unspecific about what the company planned to do with the money. saying it saw opportunities to “deploy capital in legal finance to continue to develop our business”.
UBS, the Swiss bank, set out the hurdles facing challenger banks as it initiated coverage of CYBG (CYBG), the northern England and Scotland-focused challenger bank carrying out a £1.7 billion takeover of its peer, Virgin Money, with a “sell” recommendation. “CYBG shares common features of the challenger banks: a weak deposit base, declining margins, slowing loan growth and high reliance on Bank of England funding,” analysts at the bank said. UBS predicts that the Virgin Money merger, due to complete by the end of the year, is unlikely to address those challenges. It forecasts declining earnings from 2021, regardless of anticipated cost savings from the deal. Market conditions are expected to remain tough for challengers, due to their funding disadvantage relative to large-cap banks. “In our view, volume growth will likely continue to slow and mortgage margins fall,” the broker said.
Travel stocks remained under pressure after Ryanair’s profit warning on Monday and the collapse of Primera Air, a budget carrier with 15 aircraft that began offering long-haul flights from UK airports this year. Thomas Cook Group (TCG) fell 3p to 55¼p. Wizz Air Holdings (WIZZ) was down 106p at £25.44. t dipped 16½p to £12.05.
LondonMetric Property (LMP) perked up 2½p, or 1.3%, to 182p after Barclays initiated coverage of the stock with an “overweight” rating, citing its transformation from a multi-asset company to UK retail-led logistics and distribution assets, which have benefited from rising demand due to the growth in online retail.
OnTheMarket plc (OTMP) was boosted 2½p to 146½p after it said it has signed listing agreements with UK estate and letting agents with more than 11,000 offices. Dealers will be watching the reaction to the news that Andrew Tinkler, the sacked former boss of Stobart, who had tried to oust the company’s chairman in a boardroom coup, has reduced his stake from 7.7% to 6.8%
Tempus – Royal Mail (RMG): Sell. The uncertainties about future trading are high and the sustainability of the dividend is becoming a worry
Tempus – Ryanair Holdings (RYA): Avoid. Its problems are going to take time to resolve
