Woodford Patient Capital Trust (WPCT) – Neil Woodford’s investment empire disintegrated yesterday as the stockpicker announced plans to shut his company after he was sacked as manager of his main fund. He said that he had taken “the highly painful decision” to close Woodford Investment Management, the firm he had set up amid much fanfare in 2014, and would abandon his remaining investment portfolios. The move came only hours after Link Fund Solutions, which handles the corporate governance of the £3 billion Woodford Equity Income Fund, said that Mr Woodford had been dismissed as the open-ended fund’s manager with immediate effect and that Blackrock and PJT Partners would wind down the portfolio.
Renishaw (RSW) reported a slump in profits and blamed weakening demand on the tough global economic environment. Renishaw said yesterday that its pre-tax profits had fallen by 85% to £5.1 million on revenue down 19% at £124.6 million in the three months to the end of September, its first quarter. The company said that its core business of high-precision measuring instruments for various industries, which represents most of group revenue, had benefited the year before from larger orders from consumer electronics manufacturers in the Asia-Pacific region, which “have not been repeated this year . . . Furthermore, we have experienced reduced demand for our products as a result of the challenging global macroeconomic environment.”
Investors in the Rank Group (RNK) were counting their winnings after the bingo and casino operator reported a 10% jump in like-for-like net gaming revenues in the three months to the end of September. Grosvenor Casinos delivered the “standout performance” with growth of 15% against weak comparatives, while digital revenues rose by 16% and its Spanish bingo business was up 4%. In the UK, Mecca bingo halls were flat as higher spend per visit was offset by lower customer numbers.
Shareholders in Prudential (PRU) overwhelmingly voted to spin off its fund management and UK insurance operation into a separately listed company at a general shareholder meeting. More than 99% of the votes were cast in favour of the demerger, in which M&G shares will be traded on the London Stock Exchange by the beginning of next week.
Demand for affordable homes and the Help to Buy scheme have insulated Bellway (BWY) from a Brexit-related slowdown in the wider market and enabled the housebuilder to report record annual profit and sales. Bellway announced revenue of £3.2 billion for the year to the end of July, an 8.6% rise on the previous year. It sold a record 10,892 homes for an average selling price of £291,968 and made an average profit of £60,833 on every sale. Total profit before tax rose by 3.4% to £662.6 million.
Indivior (INDV) gave its investors a dose of good news yesterday when it raised annual forecasts. Indivior said that its blockbuster Suboxone Film treatment had done better than expected. It had said previously that it was facing a market share hit after legal battles failed to stop generic rivals from being launched. A federal grand jury in Virginia has added to its problems, accusing the company in April of an “illicit nationwide scheme” to drive sales of prescriptions of Suboxone Film. Indivior denies the allegations. It has been profiting amid an opioid epidemic in the US.
Lord Wolfson of Aspley Guise has pocketed £10.1 million after cashing in shares of Next (NXT). Taking advantage of the recent surge in value, its long-serving boss sold 153,000 shares at £66.05 each after Tuesday’s closing bell. The share sale represented 10% of his holding. Lord Wolfson, 51, retains a stake in the business worth almost £100 million. A company spokesman said that he was using the money to invest in an existing non-retail venture.
UK-focused stocks were in favour — again — boosted by reports that British and European negotiators were closing in on a draft Brexit deal. Lloyds Banking Group (LLOY) rose 3p to 60¾p, while Royal Bank of Scotland Group (RBS) climbed by 10¾p to close at 226¼p. Housebuilders also moved higher. Barratt Developments (BDEV) rose 33½p to 683p, and Taylor Wimpey (TW.) closed up 4¼p to 166¾p. That was despite one of their peers, Bellway, cautioning that margins were likely to come under “more pronounced” pressure next year as costs rise and house price growth stalls.
Investors in Whitbread (WTB) can rest easy after UBS slapped a “buy” recommendation on the Premier Inn owner. Its shares have dropped by 15% over recent months, which the Swiss bank thinks is harsh. Despite concerns about growth in revenue per available room its analysts said that “Whitbread remains a quality business and the share price discounts a scenario which is more negative than that of the financial crisis”.
Fund managers surveyed by Bank of America Merrill Lynch reckoned that London’s stocks were the “least likely to outperform” over the next decade. “UK stocks have been out of favour with global fund managers for more than five years now, and European investors are not enthusiastic, either, with net 39% intending to remain underweight,” its latest European Fund Manager Survey said. Yet the bank likes UK equities, which it believes are “quality at a reasonable price”, providing both defensives and commodities, “a mix that has tended to outperform in the late cycle backdrop”.
Tempus – IWG (IWG): Avoid. Premium player in dynamic market, but share fundamentals are not appealing
Tempus – Playtech (PTEC): Buy. Lowly valuations for a diversifying company with opportunities
