The boss of AJ Bell (AJB) has raised £23 million by selling shares in the company after its sharp stock market rise. Andy Bell sold 5.5 million shares in the company. Its stock price closed up 1½p last night at 425p, more than 150% higher than the 160p-a-share at which it floated at a year ago. AJ Bell said: “Andy Bell will remain the company’s largest shareholder and is fully committed to the business and confident in the outlook. This small placing is being carried out to provide additional liquidity in response to strong investor interest in last week’s placing.” Some City analysts are bearish on the stock. Liberum introduced a “sell” rating in October, describing the share price as “a challenge to justify”.
A flurry of profit warnings rocked London’s junior market yesterday, prompting concerns that political uncertainty and a global economic slowdown have hit smaller British businesses. Five companies listed on Aim admitted that results for this year would not meet the expectations of their bosses or investors. Staffline Group (STAF) cut its forecasts while warning of an accounting blunder and announcing the departure of its finance chief. The company blamed “high levels of consumer uncertainty” as businesses held off from recruitment in the run-up to the election. Staffline added that it overstated profit by about £4 million last year and that Mike Watts, the chief financial officer, had left with immediate effect. Bistack (BIDS) was the most heavily punished by the market, with its shares tumbling by a third to 7¾p. The company said that it would miss revenue targets this year as talks with big advertising agencies had dragged on for longer than it had expected. 600 Group (SIXH) said that its performance had been hit by the downturn in the global automotive market, with orders in Germany and the Far East particularly weak. Prospects looked better in Britain, where sales had doubled, but full-year results would be “significant below” forecasts. Midwich Group (MIDW) also bemoaned a “challenging” global backdrop as it warned that a lack of large projects, which are typically higher margin, would hold back profits this year. The news sent the shares 36p lower to 573p. Touchstar (TST) was the other company to sound the earnings alarm yesterday, sending its share price tumbling by 4p to 31½p.
The boss of Pearson (PSON) has resigned only months after a profits warning knocked his plan to reshape the troubled education publisher off course. John Fallon, a company veteran who has been chief executive since 2013, will step down next year when the FTSE 100 group finds a replacement. Sidney Taurel, 70, the chairman, will oversee the succession process. Mr Fallon, 57, has transformed Pearson from a broad-based publisher of newspapers, paperbacks, textbooks and financial information into an education specialist. Its performance has disappointed investors, who have seen their holdings halve in value during Mr Fallon’s tenure. His reign has been punctuated by setbacks at its mainstay US university business, which used to reap lavish profits from $200 print textbooks but has struggled to adapt to the world of online learning. Two years ago Mr Fallon endured one of the largest shareholder revolts on record. More than 60% of investors voted against his £1.5 million pay package, which came in a year when Pearson reported a record £2.6 billion loss. He said yesterday that Pearson had made good progress in managing the shift to digital and that the company was “much more efficient” than when he succeeded Dame Marjorie Scardino.
Pearson (PSON) has ended a 50-year relationship with the sale of its remaining stake in the owner of Penguin Books. Penguin was founded in 1935 by Allen Lane and is credited with bringing paperback books to a mass audience. It won a significant legal case in 1960 after being sued for publishing the first uncensored English version of Lady Chatterley’s Lover by DH Lawrence. The victory is credited with liberalising the books industry. Pearson bought Penguin in 1970, taking ownership of all its imprints, including Penguin Classics, Puffin Books and Viking Press.
NMC Health (NMC) hammered by a short-selling attack from a US investor has launched an internal review of the claims. NMC Health yesterday responded to a scathing 34-page report from Muddy Waters, a San Francisco-based bear raider, which raised “serious doubts” about its financial statements, including asset values, cash balance, reported profits and debt levels. NMC said it will review the “assertions, insinuations and accusations made in the report, which appear principally unfounded, baseless and misleading, containing many errors of fact, and will respond in detail in due course”. The company reiterated trading guidance for this year and next and moved on with a $200 million share buyback approved by shareholders this month. The report from Muddy Waters, which has taken a short position in NMC, drove the company’s shares down by almost a third on Tuesday and wiped £1.75 billion off its market value.
Blackstone is putting a £500 million bet on demand for e-commerce and delivery services growing in Britain. The American private equity group is poised to buy Hansteen Holdings (HSTN). It said that the acquisition was an opportunity to expand Mileway, its European last-mile logistics property company, in Britain. Last-mile properties are typically used by e-commerce companies such as Amazon as the final storage location for a product before it is delivered. Blackstone has built up an €8 billion portfolio of such assets across Europe.
Playtech (PTEC) has come under further pressure after an activist investor raised concerns about its corporate governance. It is understood that Springowl, a New York-based hedge fund, has privately urged Playtech to cut all commercial ties with its founder, Teddy Sagi, and asked the company to draw up a succession plan for its chief executive. Springowl’s governance concerns increase the pressure on Playtech, which faces the prospect of an investor backlash over its bonus plans at a shareholder meeting today.
Analysts have questioned whether Meggitt (MGGT) can hit its profit margin target over the next couple of years following Boeing’s decision to halt production of its 737 Max plane. Compared with its rival Senior (SNR), which also makes parts for the plane, Meggitt came out relatively unscathed in Tuesday’s session, the day after the announcement. Analysts at Panmure Gordon expect the market will catch up, though, and they are advising clients to sell any shares they hold and stay well clear if they aren’t already invested. “With downgrades yet to be priced in, we initiate with a “sell” recommendation and a target price of 506p,” the analysts said. The brokerage said that Meggitt stands to miss out on £57 million of sales, while the lack of deliveries results in about £750,000 of lost profits each month as spare parts are not required. “We are therefore forecasting margins to rise to just 18.2% by 2021, versus guidance of 19.9%.” Panmure, which called on suppliers to “reassess their relationship” with both Boeing and Airbus, was more upbeat on Senior, which bore the brunt of investors’ frustration earlier in the week. “With another downgrade for 2020 already priced in by [Tuesday’s] 9% share price fall, we initiate with a ‘buy’ recommendation and a target price of 201p,” the analysts said.
London office stocks were among the fallers as Deutsche Bank took a more bearish view on the sector. “Despite a decisive Conservative win last week, we still believe the uncertainties around the transition timeline and the nature of the agreements remain,” analysts at the German bank said as they cut their sector rating to “hold” from “buy”. Shares in Derwent London (DLN) fell 58p to £38.06, Workspace Group (WKP) dipped by 14p to £11.60, while Shaftesbury (SHB) eased 16p lower to 914p.
The property mogul behind Berkeley Group Holdings (The) (BKG) has cashed in more of his shares in the building group for £50.5 million. Tony Pidgley, 72, the co-founder and chairman, took advantage of the post-election “Boris bounce”, which sent the stock price above £50 for the first time. He sold just over 1 million shares at £50.40 each on Monday, according to a regulatory filing. Since spring 2017, Mr Pidgley has made £216.5 million by reducing his stake in the upmarket developer, with much of the sale in the past six months. As a result, his holding has fallen to 1.3%, worth about £83 million and just enough for him to remain one of the top ten shareholders.
Tempus – ITV (ITV): Avoid. A big bounce in advertising revenue feels unrealistic and earnings growth at ITV Studios is hardly stellar
Tempus – The Renewables Infrastructure Group Limited (TRIG): Buy. Well priced and feeling the benefits of scale
