HSBC Holdings (HSBA) is set to make thousands of staff redundant and will shrink its businesses in Europe and the United States after the bank’s interim boss said that its financial performance was “not acceptable”. Noel Quinn pledged yesterday to “remodel the organisational structure” of HSBC. He made the comments as Europe’s biggest bank said that pre-tax profit had fallen by 18% to $4.8 billion in the three months to the end of September compared with last year. HSBC will shift capital away from the US and Europe and will redeploy it to its fast-growing operations in Asia. Job cuts are inevitable, with the details to be announced alongside annual results in February, Mr Quinn said. About 4,700 job losses have been announced previously and he refused to comment on reports that a further 10,000 jobs could go from the 238,000-strong workforce.
The chief executive and biggest shareholder in Ferrexpo (FXPO) has stood aside temporarily while he deals with allegations of embezzlement in Ukraine. The company said that Kostyantin Zhevago, who is also its controlling shareholder, wanted to “focus on resolving certain matters in Ukraine relating to one of the businesses he owned until 2015”. Ukrainian prosecutors have said that they want to question the 45-year-old over suspected embezzlement from Bank Finance & Credit, a Ukrainian lender that he used to control. The bank was declared insolvent in 2015 while holding $174 million of Ferrexpo funds. Chris Mawe, 57, Ferrexpo’s chief financial officer, is to become acting chief executive in a move the company said was “necessary and in the interests of all shareholders” to “enable Mr Zhevago to focus on matters in Ukraine without impacting the company”.’
The increasingly bitter takeover battle for Just Eat (JE.) has taken another turn after an intervention by an American activist investor. Cat Rock Capital Management alleged that investors in the food delivery company were being “directly and materially harmed” by share sales undertaken by Delivery Hero, a German rival. Delivery Hero immediately rejected all claims made by the Connecticut-based activist. “Delivery Hero structured its share sales in a bizarre and uneconomic fashion that seems deliberately intended to depress Takeaway.com’s stock price,” Cat Rock claimed. Delivery Hero said: “The decision to sell down Takeaway.com shares was taken by Delivery Hero’s management board independently in September 2019. Delivery Hero had no knowledge of Prosus’s contemplated offer to acquire Just Eat prior to the publication of the offer.”
Hammerson (HMSO) executives could have their bonuses cut after the shopping centre owner launched a consultation on pay reforms in response to an investors’ revolt. The company said yesterday that it was consulting “major shareholders and voting advisory agencies” on its remuneration policy “to ensure that executive reward continues to be aligned with shareholder interests”. Almost a third of investors at the company’s annual meeting in April rejected its executive pay policy, which included multimillion-pound incentives for David Atkins, 53, its chief executive, and other directors. The revolt came after Hammerson fell from a £413 million profit in 2017 to a pre-tax loss of £266.7 million last year.
Aston Martin Holdings (AML) was in reverse again after a searing note from Bank of America Merrill Lynch. Analysts at the same bank that priced, organised and underwrote Aston’s listing relegated the stock from “neutral” to “underperform”, having already demoted it from “buy” in July. They cut their price target from 550p to 400p noting that weak near-term demand was affecting profitability and that a controversial bond sale last month had made Aston’s financial position more challenging.
Cairn Energy (CNE) fell to 162p after it abandoned an offshore well in Mexico. Analysts at RBC Capital Markets said that the site was a “key well in an important basin for Cairn that could have added around 30p per share to our valuation”. The Edinburgh-based oil and gas explorer also will have to wait until next year for a decision on its long-running $1.4 billion tax dispute with the Indian government, although Cairn said that it “continues to have a high level of confidence” in the merits of its claim.
Costain Group (COST) said that it had been awarded highways contracts worth more than £150 million over the past quarter, including a project for Lancashire county council that is expected to be completed in early 2023 and another for Highways England to install enhanced technology in three areas in the South East.
Nuformix (NFX) shed 1¾p having confirmed that one of its lenders had converted its loans into shares after the share price jumped by 43% on Friday. That lender was Alan Miller, chief investment officer of SCM Direct, a wealth manager, who is married to Gina Miller, the anti-Brexit campaigner. Last week, the company confirmed that it was in talks with “multiple potential licensees in Japan and Asia”.
Sosandar (SOS) added 4p to 20p after it reported a half-year trading update in which it said that it would be investing heavily in television advertising. It expects to report revenue of £2.8 million for the six months to the end of September, an increase of 53% on last year.
Botswana Diamonds (BOD) rose after Vutomi Mining, in which it has a 40% stake, was granted a permit to trawl through leftovers, known as tailings, around a De Beers project. The mine was open for only two years in the late Nineties and famously paid for itself in just four days, but the diamond-bearing gravels and unprocessed stockpiles around the pit were overlooked.
The government’s decision to permit photographs taken on a smartphone or personal camera to be used for passports was not good news for Photo-Me International (PHTM). The change made trading in the quarter to the end of last month particularly challenging, the company said, although consumer activity was also dampened by Brexit jitters. Its identification division reported revenues down 3.8% in the five months to September, compared with last year. It hopes that vending machines dispensing fresh pineapple and apple juice at railway stations, due over the next two years, will provide a revenue stream that will allow it to diversify from its traditional business.
Tempus – Smithson Investment Trust (SSON): Hold. Carefully considered portfolio chosen by respected investment manager that has got off to a strong start
Tempus – Stock Spirits Group (STCK): Hold. Respectably priced and with growth potential but not a must-have
