Brooks Macdonald ups divi for 18th year running
FINANCIAL advice group Brooks Macdonald saw funds under management rise by more than £1 billion to £16.8 billion this year and chief executive Andrew Shepherd says more and more people will rely on his services.
“We have an ability in financial advice to shoot ourselves in the foot,” he said. “Over many years we have given the public reason to not trust us.”
The mis-selling scandals such as pension transfers are now in the past, he insists, with regulation much tighter.
Profit for the year fell from £34.5 million to £30.3 million, but the AIM listed group felt able to increase its dividend to 75p from 71p, the 18th successive rise.
While there are “short-term macroeconomic headwinds” the longer-term future looks bright, says the group.
It will continue to “review potential acquisition targets”. The shares slipped 45p to 1885p, which values the business at £310 million.
Staff bonuses at risk at John Lewis
The John Lewis Partnership fell to another big loss of £59 million for the half-year as Dame Sharon White admitted her “transformation” plan will take two years longer to execute than previously claimed.
That seems highly likely to take a toll on the staff annual bonus at least this year and probably next, though the group insists no decision has yet been taken.
The employee-owned business blamed inflation and the need for greater investment for pushing back its goals.
“The cost-of-living crunch means the plan will take longer,” said White, brought in as chairman to revolutionise a company critics say has fallen behind the times.
The annual bonus to partners fell to zero in March this year after a full year loss of £230 million. White said then that “inflation hit us like a hurricane” as JLP plunged to only its second ever full year loss in its 160-year history.
The modernisation plan will now take until 2027/28 rather than 2025/26 to complete and those investments will “take precedence” over payouts to staff.
The move not to pay a staff bonus this year was only the second time that has happened since 1953..
White spoke of a “productivity deficit” and “the most competitive retail market ever” as she warned of a “long road ahead”.
The loss of £59 million is down from £99 million a year ago. The group hopes to be profitable for the entire year and notes it makes most of its money in the last three months of the year.
JLP insists its brands are strong – it claims 600,000 new customers to 21.4 million.
Waitrose sales rose 4% to £3.7 billion. A slow down in dining out has helped those sales as has a new £5 lunchtime meal deal.
Profits plunge at M&C
New clients including Unilever, Channel 4 and JP Morgan failed to stem a near halving of profits at M&C Saatchi for the six months to June.
The famed ad group saw profits down from £16 million to £8.8 million as CEO Moray MacLennan prepares to depart.
Zillah Byng-Thorne is now executive chairman.
Revenue fell from £129 million to £120 million as clients pulled back on technology spending.
Byng-Thorne said: “The second half of the year is about growth, execution, and efficiency. Whilst some economic headwinds are likely to continue, we are focused on what we can control: continued connectivity of our business, elevating our highest-margin businesses in resilient segments, underpinned by tight cost management.”
M&C was founded in 1995 by David Kershaw, Bill Muirhead and Jeremy Sinclair along with the brothers Maurice (now Lord) Saatchi and his brother Charles.
Kershaw, Muirhead and Sinclair have all recently bought shares in the business in a sign of confidence in its future.
The stock fell 5p to 125p today.
Arm poised to price at top end of range
Shares in British chip designer Arm are poised to begin trading in New York today at $51 per share, implying a market capitalisation of $52 billion.
The share price, which comes in at the top end of the price range guidance, remains significantly below the $60-70 billion market cap that Arm owner SoftBank had mooted earlier in the year.
But the tech firm could have been priced higher after its share offering was oversubscribed by a factor of 12, while some projections see the stock rising to as much as $62 in signs SoftBank is taking a cautious approach.
James Ashton, author of The Everything Blueprint, which chronicles the history of Arm, said: “You would imagine with 28 banks on the ticket this company would sell well.”
“Any upward revision on the price would suggest that CEO Renee Haas’s growth story is getting through. People get excited by Arms 1,000+ tech partners…you need that foundational base on which to sell other things.”
Arm’s customers are set to closely watch how the chip designer’s strategy might change when it becomes public.
Charles Sturman, chair of the Semiconductor Leadership Group, said the firm’s future growth could depend on how it works its new shareholders as a listed company.
“The important thing for Arm is it has to remain neutral,” he said.
“The major shareholders are going to be some of Arm’s major customers. Other companies are going to be put off if they perceive Arm is prioritising a customer that has shares in it.”
THG loses its £1 billion market cap crown as shares slide 17%
Shares in online retailer THG slid 17% to 72p after markets opened this morning, causing the firm’s market cap to below £1 billion.
Revenue for the first six months of the year fell 9% to £969 million while pre-tax losses jumped 25% to £133 million.
London stocks make gains with miners in the lead after upbeat broker comment
London’s FTSE 100 stayed positive in early trade, with global resource stocks at the top of the leaderboard after positive broker comment on the sector from City experts.
Anglo American made the best single gain of the morning, up 49p to 2149p a gain of over 2% after JP Morgan lifted its price target on the stock to 2900p from 2650p. Rio Tinto was in second place, up 103p to 5088p after the same analysts lifted their rating on the stock to “neutral” from “underweight”.
Overall, the main UK stock index gained over 17 points overall to 7,543.47. Big names from the mining sector appeared across the leaderboard, with Glecore up 5p to 437p and Antofagasta up 13p to 1449p.
Advertising group WPP was the biggest single faller, down 15p to 755p, a drop of 2%, after its profits halved.
Market snapshot as shares start higher
Take a look at today’s market data as the FTSE 100 rose after opening.
Hipgnosis Songs Fund sells $465 million worth of music rights
Listed music catalogue investor Hipgnosis Songs Fund has sold $465 million worth of music rights, for artists such as Shakira, Barry Manilow and the Kaiser Chiefs, to an unlisted entity aso controlled by Hipgnosis as it hopes to correct a share price slide.
Hipgnosis chair Andrew Sutch said the board had long felt the fund’s share price didn’t reflect the value of the songs it owns.
“As a Board, we have been clear for some time that the company’s share price does not fully reflect the value of Hipgnosis Songs Fund’s portfolio,” he said. “Having consulted with many of our largest shareholders, considered a wide range of options and taken independent advice we are confident the proposals set out today provide a compelling opportunity to deliver immediate shareholder value whilst protecting our ability to deliver superior returns over the medium term.”
The fund will return $180 million of the proceeds to shareholders and pay down $250 million in debt.
THG sales slide as losses widen
Sales slid at digital commerce firm THG and losses widened further as the firm battled weak consumer demand.
Revenue for the first six months of the year fell 9% to £969 million while pre-tax losses jumped 25% to £133 million.
The increased loss was not mentioned in CityAM, now owned by THG, which instead discussed cashflow at the business.
Matthew Moulding, CEO of THG, said: “Inflationary pressures provided significant challenges to consumers and businesses alike over the past 18 months.
“Our strategy of supporting our consumers through 2022, sacrificing margins in the short-term, is bearing fruit.”
FTSE 100 set for opening gains with attention back on housebuiders
London’s FTSE 100 is expected to make modest opening gains, with futures contracts in the main UK stock index pointing to an opening gain of around 30 points.
Attention is back on housebuilders after government rule changes designed to make the planning process easier were defeated in the House of Lords. The proposals led to a sharp rally in the sector when they were first introduced. After a rebound during the previous session, the delay to the changes may influence trade today.
Inflation and interest rates are also back on investors’ radar screens, with an interest rate call due in the euro area from the European Central Bank. The next Bank of England vote on UK rates is not due until next week.
Trading in Arm, the chip designer, will begin in New York today, and will be closely watched in London, the high-tech firm’s former home.
There are also updates due from spread betting firm IG, travel ticket seller Trainline and online retailer THG.
