Metro slides after it taps shareholders for £303m

AFTER releasing its results almost a day earlier than planned and announcing a surprise fundraising, Metro Bank took a hit.

It paints itself as a more consumer-friendly alternative to highstreet institutions like Lloyds and Barclays, but disappointed analysts who were expecting £195m of revenues were given £190m.

Profit of £18.2m also fell short of the £26.8m predictions. Though the bank succeeded in placing 8.9m new shares, worth 3422p each and raising a total of £303m, investors seemed perturbed.

Earlier this year, Metro’s chief executive Craig Donaldson promised the bank would not raise any more money this year.

He said yesterday: ‘We’re growing so well we’ve brought this money in to provide growth capital.’ And he insisted there had been no pressure from regulators to raise the extra cash.

But Metro’s regulatory capital ratio – or how much spare money it holds compared to the risks on its books – has slid. Rob Murphy, an analyst at Edison Investment Research, said the raise was clearly a response to the decline in the capital ratio, which Metro set at a minimum target of 12pc.

A number of the shareholders who participated in the fundraiser on Tuesday are understood to be connections of Metro’s founder and chairman Vernon Hill, an American businessman. Hill himself had said he would spend up to £10m on new stock.

But the rest of Metro’s investors were less impressed, as shares fell 1.5pc, or 52p, to 3370p.

Indivior, the drugs company buffeted by competition from an Indian rival making generic alternatives to its opioid addiction treatment, also suffered as it released half-year results.

The figures confirmed fears that its sales had been knocked, as revenue sank 7pc to £398m in the first half of the year and operating profit dropped 20pc to £200m.

In the FTSE 100, precious metals miner Fresnillo dropped 7.3pc, or 81p, to 1025p as it lowered its silver expectations.

It said that total silver production for the year would likely be closer to 64.5m to 67.5m ounces, rather than the previously announced 67m to 70m ounces. Events and exhibitions business

Informa failed to impress, despite announcing a 1.9pc increase in underlying profit to £294.4m.

The £10bn company said it would try to milk £15m more of savings from its £3.9bn takeover of UBM by the end of 2021, and use £10m to help fund its struggling portfolio of fashion events. Shares fell 4pc, or 34p, to 816p. Overall, the FTSE 100 index lost 0.66pc of its value, or 50.79 points, to end the day at 7658.26. Wealth manager Brewin Dolphin made steeper gains, climbing 6.4pc, or 21.6p, to 358p, after it reported record total income for the third quarter.

Total funds under management swelled by 6.5pc to £42.3bn, and analysts at Shore Capital said Brewin remained their only ‘buy’ recommendation in the discretionary fund manager space.

Budget East European flight operator Wizz Air took a dive, falling 8.5pc, or 302p, to 3256p as it lowered its growth targets.

Despite seeing a 19.7pc rise in passengers carried in the first quarter of its financial year to 8.6m people – more than the population of London – it trimmed its full-year growth target from 20pc to 18pc. Wizz blamed rising fuel prices and strike disruption.

Burford Capital, which uses investors’ money to fund legal cases and aims to pay them a return out of the damages or settlement won, had a stellar day as it climbed 15.5pc, or 254p, to 1896p. Operating profit at the business was up 18pc to £139.3m.