Smith & Nephew (SN.) could face a backlash from investors after its chief executive stood down only 18 months into the role amid a dispute about his pay. More than £1 billion was wiped off the market value of the medical equipment manufacturer yesterday as its shares tumbled by 162p to £16.67½ after the surprise announcement that Namal Nawana was leaving by mutual agreement. He will be replaced at the start of next month by Roland Diggelmann, 52, who will be based in Switzerland and has been a non-executive at the company since March last year.
Prudential (PRU) split into two separately listed businesses made a steady start yesterday as shares in the group and the division housing its fund management business rose on their first day of trading. With dealing driven by investors deciding whether to hold Prudential for growth or M&G as a likely high dividend-payer, shares in both companies rose amid heavy trading.
Slowing order growth in Just Eat (JE.) core business spooked investors yesterday, sparking fears that takeaway delivery rivals may be eating into its business. The company is in the throes of a merger with Takeaway.com but scepticism over the terms of the deal has hit both companies’ share prices, cutting their combined value from £9.4 billion to £7.75 billion since it was announced in July. While its relatively new British delivery business — where Just Eat itself delivers the food — was growing rapidly, it said that this had been offset by slower growth in its marketplace division, where it acts as a middleman between consumer and restaurant.
An improvement in projected returns for the year gave a boost to Funding Circle (FCH). Shares in the peer-to-peer lender rose by more than 16% after it said that its loans under management had reached £3.7 billion in the third quarter, up 31% over the past year. So far this year it has written £1.8 billion in new loans, compared with £1.6 billion last year. The £561 million of new loans in the third quarter represented a 0.55 decline on the same period last year. After fees and bad debts, projected returns this year for Britain, its biggest market, are between 5% and 7%, against between 4.2% and 5.2 % last year.
A consortium led by Nick Candy could derail Capital & Counties Properties (CAPC) plans to de-merge its £3.2 billion London estates by making a cash offer for the entire company. Candy Ventures confirmed yesterday that it was in the early stages of considering an offer for the issued share capital of the listed group that has land and property holdings in Earls Court and Covent Garden. Hours after Candy Ventures had said that it was considering an approach, Capco in turn announced that it had entered exclusive talks to sell its interests in Earls Court, west London, where 7,500 homes are planned, with Delancey, a property developer, and APG, a Dutch pension manager.
Legal & General Group (LGEN) has committed £750 million to affordable housing projects in Britain, increasing its development pipeline to nearly 3,500 homes. The group has agreed deals for homes at 41 schemes across areas including Bedfordshire, Cornwall, Kent and London. Ben Denton, managing director of Legal & General Affordable Homes, said: “There is an urgent need to innovate new ways to provide stable homes for the millions of households on waiting lists. Legal & General remains committed to deploying institutional capital at scale into this sector, to deliver the volumes of social housing which society desperately needs.”
The trading update from ASOS (ASC) last week confirmed that the online fashion retailer was “not broken, just bruised”, RBC decided. Asos reported a 68% drop in profits for the year just gone, despite sales climbing to a fresh record. Yet its shares leapt after its bosses said that issues in its warehouses in Europe and the United States had been resolved and that they were more prepared for Black Friday, the annual retail sales event, this year. RBC was reassured by the update and analysts claimed that Asos was “on the path to glory” as they raised their price target to £39, from £33 previously. “Asos’s update confirmed our view that the business is indeed not broken, just bruised,” Sherri Malek, of RBC, said in a note to clients. “[The] turnaround will be progressive, but we expect each update from here to provide increasing evidence that the business is back on track.”
Reckitt Benckiser Group (RB.) was weighed down by a change of finance director, in its case of Adrian Hennah, who is to leave in April after what will have been seven years in the role. His replacement is Jeff Carr, chief financial officer at Ahold Delhaize, the Dutch grocery group, who worked at Reckitt for a decade earlier in his career. Analysts at Bernstein said that the appointment “should help to rebuild investor trust” in Reckitt after a turbulent few years. The market didn’t seem overly enthused with the change though.
Rank Group (RNK) was lifted by a bullish “buy” recommendation from Shore Capital. Analysts at the broker said that the recent addition of Stride Gaming, which roughly doubles its digital business, would help the gambling operator’s pre-tax profits to jump by 37% this year to £96 million. Shore thinks more acquisitions could be in the pipeline, with an estimated £300 million to £400 million of “firepower on the balance sheet”.
Koovs (KOOV) shares dropped after announcing that the company’s largest shareholder Future, an Indian retail group, had been due to invest another £6.81 million into the business. Koovs has received only £250,000 of that and bosses aren’t convinced that they will receive the full amount this year, as had been planned.
Shares in Lam Zyfin Global Markets UCITS ETF Lam Zyfin MSCI India Ucits ETF (MIND) jumped after it emerged that this year’s revenues would be “slightly ahead” of expectations. The company works with staff at the likes of Schneider Electric, Coca-Cola and ING, providing workshops and online “e-workouts” on everything from customer service to diversity and inclusion. Demand has been driven by the #MeToo movement as companies try to improve their workplace cultures. Mind Gym bosses said that not only had they won new business, they also had managed to eke out more from contracts with existing customers, which include almost two thirds of the FTSE 100 and more than half of the S&P 500. Pre-tax profits for the company’s first six months to the end of September are likely to be similar to last year, as investments in the business offset higher revenues.
Tempus – Prudential (PRU), M&G: Investors keen for swift and substantial capital growth might prefer to own Prudential shares, likely to increase in value on the back of Asian profits; those seeking a reliable income might be better off with M&G, which is tipped to pay a high dividend but on more modest growth.
