Twin tailwinds help Ryanair weather pilot crisis 31 Oct 2017 The 20 bln euro no-frills airline will meet its full-year profit goal despite a rostering mess that cost it thousands of flights. Passenger numbers were up 11 pct in the six months to September. Ryanair’s fare cuts helped, but it also got lucky with rivals’ bankruptcies.
UK gender pay equality drive is too easy to skirt 30 Oct 2017 Bigger employers have less than six months to disclose any difference between how much men and women earn. Transparency is supposed to help close the gap. But Austria has tried something similar to little effect. Only the threat of eventual sanctions will make a real difference.
Novartis avoids danger with nuclear M&A option 30 Oct 2017 The Swiss drugmaker is paying $3.9 bln for France’s Advanced Accelerator, which uses radiation to fight tumours. The deal is at a hefty 47 pct premium, but it’s logical and ticks financial boxes. It won’t drive investors wild, but they don’t need to run for the shelters, either.
HSBC investors to new CEO: more of the same please 30 Oct 2017 Rising Asian earnings lifted the lender’s underlying pre-tax profit by 8 pct in the first nine months of 2017. With a conservative loan-to-deposit ratio of 70 pct, incoming Chief Executive John Flint can afford to boost lending and look forward to fatter interest margins too.
RBS’ next tempest beckons as past storms subside 27 Oct 2017 The state-owned lender is resolving litigation and other hangovers from the 2008 crisis. It is still barely profitable, but third-quarter results suggest it might one day cover its cost of capital. A rich valuation, however, pays little heed to the risk of a Brexit-induced slump.
GSK’s new CEO held hostage by dividend cult 26 Oct 2017 The British pharmaceutical company’s market value slid by 6 bln pounds after Emma Walmsley suggested big deals and dividends might not be compatible. Being flexible is perfectly rational – unlike investors craving for high payouts at the potential expense of growth.
Banks draw short straw from ECB 26 Oct 2017 The central bank will trim its monthly bond purchases but promised to keep buying for longer. That balances the demands of those who oppose money printing with the wishes of rate-setters who fear growth is still fragile. The losers are banks, whose negative rate pain will endure.
Jes Staley gets no due for new-look Barclays 26 Oct 2017 The UK bank’s boss heralded the end of major restructuring on Oct. 26. Investors – who sent the shares down 7 percent on weak third-quarter results – aren’t convinced. At a deep discount to book value, Barclays offers decent upside if Staley can hit his modest return targets.
Lloyds capital gusher suffers regulatory blockage 25 Oct 2017 Robust third-quarter earnings should enable Britain’s largest retail bank to pay a hefty dividend. But increased capital requirements have raised doubts about how much it can distribute. That, along with the sluggish UK economy, puts a question mark over the lender’s valuation.
Arqiva’s old-school TV vibe creates IPO static 24 Oct 2017 The UK broadcast and mobile masts company plans to raise 1.5 bln stg. An order book of mostly inflation-proofed long-term contracts and the pledge of big dividends are appealing. Less so is its reliance on TV towers rather than the cell ones that are tomorrow’s money spinners.
Russia power IPO lacks “pass the parcel” discount 23 Oct 2017 Oleg Deripaska’s En+ priced its London IPO with a valuation of up to $8.5 bln. On the surface that makes it a cheap way of buying Rusal, the Hong Kong-listed aluminium producer it controls. The catch is that investors can’t see how this portfolio rejigging will shake out.
Mediclinic takes advantage of sickly Spire 23 Oct 2017 The operator of hospitals in South Africa and the Gulf has bid 1.2 bln pounds in cash and shares for its UK peer. Spire Healthcare has been hit by a scandal, government cuts, and an executive vacuum. Mediclinic is offering a stingy premium and too much of its unappealing stock.
Unilever struggle gives hope to predators 19 Oct 2017 The consumer giant that fended off Kraft Heinz earlier this year reported weak third-quarter sales. Growth in developed markets is slow and consumers are fickle. CEO Paul Polman is sprucing up brands, but the more pedestrian Unilever’s performance, the more vulnerable it becomes.
Rolet hands LSE successor a triple quandary 19 Oct 2017 The London Stock Exchange boss is going to exit once his replacement is found. The Frenchman expanded and diversified but failed to clinch a deal with Deutsche Boerse. His successor will inherit a company confronting big shifts in technology, capital markets and politics.
Revamped Reckitt has yet to clean up its act 18 Oct 2017 A restructuring is eclipsing the Dettol-to-Durex maker’s poor third quarter results. Parking brands that are more exposed to competition in a separate unit is smart but makes the company costlier to run. Nor does that address the sales problems caused by shifting consumer habits.
Private equity margarine bet needs activist backup 18 Oct 2017 Buyout firms may pay up to 7 billion euros for Unilever’s spreads unit. The new owners will need to stem falling sales as shoppers shun artificial produce. Acquiring other brands from food companies under pressure from uppity shareholders could be one way of boosting returns.
Mistimed writedowns lesser of mining M&A evils 18 Oct 2017 Rio Tinto has been accused by the SEC of hiding the plunging value of a coal mine it bought in 2011. The charges are serious, but at least accounting procedures are fairly clear. If only there were rules that could prevent mining bosses getting carried away during M&A upswings.
Heads or tails, Mark Carney loses 17 Oct 2017 British inflation has hit 3 percent, the highest level since 2012. No wonder the Bank of England chief is hinting policy rates may soon rise. Carney’s problem is that he will be criticised for hurting a slow-growing economy if he hikes and accused of inconsistency if he delays.
Pearson’s improved report card could be erased 17 Oct 2017 The education publisher issued a slightly more optimistic forecast for operating profit and said its U.S. textbook business is unlikely to repeat its catastrophic 2016. But Pearson has misread its key market before. The shift to digital publishing still looks painful.
FirstRand makes punt on post-Brexit housing market 16 Oct 2017 The South African bank has offered 1.1 billion pounds for Britain’s Aldermore. Shares in the mortgage lender had slipped amid concerns about the slowing property market. At 8 times expected 2018 earnings, FirstRand could be getting a bargain – provided bad loans don’t shoot up.