Companies in the news ... and how they were assessed
Softbank: Saudi dilemma
Softbank shareholders had a “list of urgent questions” for chief executive Masayoshi Son when he reported the Japanese tech giant’s latest quarterly results this week, said Kana Inagaki in the Financial Times. Topping the list was the future of Softbank’s Saudibacked $100bn Vision Fund following the killing of Saudi journalist Jamal Khashoggi. Shares in the Japanese group – which owns the UK chip designer Arm, as well as holding big stakes in Uber, Wework and the Chinese e-commerce giant Alibaba – have fallen 22% since Khashoggi’s death last month. How would Son resolve the situation? By attempting to steer a middle course, said Dealbook in The New York Times. Thus, while he spoke out for the first time against the “horrible” Khashoggi murder, he added that Softbank wouldn’t distance itself from the Saudi kingdom as it seeks to diversify away from oil dependence. Given the importance of the Vision Fund to Softbank, which reported a 78% rise in profits to 706bn yen (£4.8bn) in the second quarter, Son may feel he had “no choice”. But big consulting firms like Mckinsey & Company and Boston Consulting Group are also hanging on to their Saudi contacts. So too is the investment giant Blackrock whose boss, Larry Fink, observed last week that doing business with the Saudis is “not something I’m ashamed of”. Son, it seems, is by no means alone.
Itv/easyjet: dame’s delight
“Want to make it big in television? Join a low-cost airline,” said Matthew Vincent in the FT. Since easyjet boss Dame Carolyn Mccall won the top job at ITV last year, “several others have made the short hop from Luton airport to central London”. Now the broadcaster has signed the services of Chris Kennedy, Mccall’s chief financial officer at the airline between 2010 and 2015, to do the same job at ITV. You can see why Kennedy is keen to exit his current post at Micro Focus, “where his main task” has been “issuing a profit warning”. Still, this appointment does make sense. “It lessens the execution risk – or chance of a personality clash – as Dame Carolyn implements her strategy for cutting ITV’S reliance on declining TV advertising.” Whatever happened to the spirit of The Big Audition, ITV’S factual entertainment series in which “real people” compete for “potentially life-changing jobs”, asked Alistair Osborne in The Times. Still, shareholders probably won’t complain too much about Kennedy reprising his role as Dame Carolyn’s co-pilot. “Between them, they quadrupled the share price” at easyjet.
Marks & Spencer: same old tune?
Anyone hoping that M&S will do the splits is in for a disappointment, said Sam Chambers in The Sunday Times. Having apparently “explored a radical plan” to separate the food and clothing businesses, the board has concluded that the retailer’s “struggling merchandise division would not attract investors as a standalone entity”. And so M&S soldiers on, said Neil Craven in The Mail on Sunday. Ahead of this week’s results, it was under pressure to stabilise the decline in clothing sales “after a difficult start” to the winter season. “M&S desperately needs to work out what it stands for, identify its target customers and invest hard to turn the negative momentum around,” noted David Cumming of investor Aviva. No change there, said City Spy in the London Evening Standard. That comment could have been made “at any time in the past decade”.