When analysts became villains
DIFFERENCES of opinion are what make a market. So it’s pathetic to hear that Panmure Gordon’s number cruncher Jeremy Grime and Liberum Capital’s Justin Bates were turned away from Provident Financial’s analysts’ meeting called to discuss the Footsie lender’s annual results. Why? Because they have been sellers of the stock.
PF’s chief executive Peter Cook and his advisers should all be ashamed of themselves. Major shareholder Neil Woodford surely does not condone such juvenile behaviour.
Nevertheless, Cook and Co could still bask in the glory of a 68p gain in the share price to 3267p, after touching 3357p, following a 25pc rise in adjusted pre-tax profits to £292.9m and a 22.6pc hike in the dividend to 120.1p.
The results reflected strong momentum at Vanquis Bank, which offers credit cards under the Visa brand for UK residents with a limited or uneven credit history.
Its profits surged 23pc, while its Moneybarn subsidiary saw a sharp increase in new business of 69pc and a 42pc increase in profits in its first year of full ownership.
Unperturbed by his earlier rejection and just to show he doesn’t bare a grudge, Panmure’s Jeremy Grime upgraded to hold but believes it is ‘priced for perfection’. He says: ‘It is the most expensive lender in the UK market and is performing well, driven by Vanquis’ growth. The risk is if Vanquis’ market becomes saturated and competition increases’’.
Perennial bid favourite Croda International jumped 69p to 2929p in response to betterthan-expected full-year results and news of a special dividend of £1 a share for lucky shareholders. The chemicals ingredient company enjoyed record sales of £1.082bn for the year to end-December which helped pre-tax profits rise 8.2pc to £254.7m.
The company’s board proposed a final dividend of 38pc per share, taking the full year dividend to 69p and then you can add on the £1 a share bonus.
The fragile Footsie dipped below 6,000 again as a weaker oil price and acutely disappointing results from international bank Standard Chartered, 29.35p lower at 406.95p, and miner BHP Billiton, 48.1p off at 746.9p, dragged it 75.42 points down to 5962.31, while the FTSE 250 lost 59.60 points to 16,229.20. Wall Street didn’t help by falling 180 points on profit-taking before lunch in New York.
Xavier Rolet’s London Stock Exchange was the talk of the town when its shares rocketed to 2780p early afternoon on surprise news of merger talks with old foe, Germany’s Deutsche Boerse. The two have been in detailed discussions about a deal which would create the biggest European exchange. The LSE said the potential merger would be structured as an all-share marriage of equals. The close was 317p higher at 2630p.
Panmure Gordon, one of the LSE’s oldest stockbroking firms, jumped 6p or 11.5pc to 58p on revived gossip it’s day’s of independence could be numbered. Rumours were rife that Qinvest, the Qatari financial services group which sits on 43pc of Panmure’s equity, has been approached to name a price for its stake. Investment bank Jefferies and Nomura are said to be ready to pay 90p a share.
Panmure fell sharply in December following a profits warning. It said it would make a loss of between £4m and £4.5m and blamed postponed deals for corporate clients. Chairman Ed Warner recently said he would be stepping down at the AGM in May.
Sellers stamped all over coin and stamp dealer Stanley Gibbons and the shares crashed 21p or 33pc to 43p after it warned it would make an adjusted pre-tax loss of £1m£2m for the year to end-March as sales of rare collectibles to high net worth clients have been lower-than-expected. The integration of recent acquisitions has not achieved the cost savings required and there has been continued investment in the online platform. To help support a rationalisation exercise, the board now plans to raise £10m through a share placing. In an effort to raise more cash, Gibbons recently put the 37, Dover Street, Mayfair, headquarters of subsidiary Mallett up for sale.
Profit-taking following the excellent results left Unite Group 26p easier at 603p. The developer and manager of student accommodation saw a 258pc surge in annual profits to £388.4m and a final dividend of 9.5p, up from 9p in 2014.
In a note entitled 1st Class with Honours, broker JP Morgan Cazenove wrote the outlook is extremely strong, with at least the same rental growth (3.8pc) in 2016 and development yields of 8.5pc still achievable. Real Estate Investment Trust status is planned for 2017 and 16p-21p of additional earnings growth potential over the next few years.
Talk of an imminent earnings enhancing acquisition to help bolster its clinical health coaching services business left Totally 2p dearer at 56p.