Update: Rathbone Brothers announce Barclays Wealth acquisition

Ishen Patel
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Update: Rathbone Brothers announce Barclays Wealth acquisition

Rathbone Brothers PLC (LON: RAT) have announced to shareholders that they will acquire the personal industry and court of protection business of Barclays Wealth (LON: BARC).

Rathbone Brothers Plc is a UK provider of personalized investment management and wealth management services for private investors and trustees.

This includes discretionary investment management, unit trusts, tax planning, trust and company management, pension advice and banking services.

Shares of Rathbone currently trade at 2,140p. 28/11/19 11:00BST.

This morning, the Rathbone Investment Management Ltd sector of the firm announced it had reached an agreement to acquire Barclays Wealth for an undisclosed fee.

Barclays Wealth is a sub unit of FTSE100 (INDEXFTSE: UKX) lender Barclays.

The timing of the sale does come as a surprise. In August, Barclays reported an 82% rise in interim profits. This may suggest that the price offered may have been too tempting to resist.

Shares of Barclays dipped 0.046% after the announcement to 174p. 28/11/19 11:02BST.

The business being acquired comprises £500 million in funds under management, being managed on behalf of 600 clients and their deputies and trustees. A team of 10 individuals will join Rathbones’ at completion of the deal, expected in the second quarter of 2020.

The acquisition will be funded from existing capital resources, London-based Rathbone said, and is consistent with the company’s plan of penetrating specialist markets.

At the end of October, Rathbone brothers gave shareholders a warning about low profits, which sunk shares.

However, the firm with the new acquisition has seemed to satisfy shareholders in an attempt to stimulate business in a tough market.

The acquisition comes at a good time, where firms in the industry such as HSBC (LON: HSBA) and Lloyds (LON: LLOY) have struggled in the market.

Paul Stockton, Rathbone chief executive, said: “The personal injury and court of protection sector is an attractive specialist part of the UK wealth management market. The Barclays Wealth team are highly experienced and have a strong set of relationships in their sector. We’re delighted that they are joining us to complement our existing specialist capability.”

Sentiment falls at business and professional services firms

Dina Caruso
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Sentiment falls at business and professional services firms
Business and professional services firms are negative about the outlook for business expansion over the next year, new data revealed on Thursday. The Confederation of British Industry said that sentiment about the general business situation continued to diminish, but this occurred at a slower pace than in the previous quarter. New data revealed that business volumes declined over the last quarter, following a stabilisation period in the three months to August. The Confederation of British Industry added that volumes are expected to decline at a similar pace in the three months to February 2020. Profitability at business and professional services firms “fell sharply” in the three months, the report said. This is the fastest decline since November 2011, and the Confederation of British Industry said that it is expected to fall at the same pace in the following quarter. Meanwhile, employment at business and professional services firms fell at the fastest pace since May 2017. “The current economic climate is holding back UK services firms, which are reporting falling sentiment, declining volumes and weaker profitability,” Rain Newton-Smith, Chief Economist at the Confederation of British Industry, commented on the data. “Neither is the outlook expected to improve, with firms pessimistic about their prospects for expansion, investment plans having been scaled back and hiring on hold,” the Chief Economist continued. “Whoever forms the next Government, it’s essential they commit to refocusing on the domestic agenda, to propel the UK economy forward – prioritising skills and infrastructure investment, as well as reaching net zero by 2050. And securing a good Brexit deal which protects our world-beating services sector, which forms 80% of our economy.” As parties prepare for the general election to be held later this year on the 12th December, speculation prevails over who will form the next government. News emerged on Thursday that the Conservatives are set to win 359 seats, giving the party a majority of 68 seats, according to a new poll. Elsewhere on Thursday, the political climate also weighed on the automobile sector, as UK car production declined for 16 out of the past 17 months.

Amigo shares spike on lifted interim payout

Ishen Patel
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Amigo shares spike on lifted interim payout

Shareholders of Amigo Holdings PLC (LON: AMGO) have seen their shares spike on Thursday morning following a rise in their interim payout.

Amigo Holdings is a guarantor loans lender, which provide fast, flexible and straightforward loans. The firm prides itself on no hidden costs, bad credit and CCJ’s accepted.

Also, Amigo provides loans to consumers in which payments are guaranteed by a friend or family members

Earlier this year, Amigo changed their annual expectations which caused shares to plunge. However, it seems that the firm has now won back the appetite of shareholders.

Shares of Amigo spiked 16.6% to 69p on Thursday morning. 28/11/19 10:44BST.

Competitors in the insurance and finance industry have seen slumps in trading in tough conditions.

Big names such as HSBC (LON: HSBA) and Lloyds (LON: LLOY) have seen their third quarter profits slip amid modest updates.

Additionally competitors in the insurance sector including Aviva (LON: AV) and AXA (EPA: CS) have seen their shares fall after slumps in trading.

In the six months to September 30, Amigo recorded pretax profit of £42.3 million, down 13% on the £48.4 million reported the year before.

n the six months to September 30, Amigo recorded pretax profit of £42.3 million, down 13% on the £48.4 million reported the year before.

Amigo saw a 75% increase in total operating expenses, which grew to £40.7 millions from £23.3 million a year ago, which bruised profits.

Revenue was up 12% year on year, from £130.1 million to £145.4 million.

“While the wider environment remains challenging with ongoing economic and political uncertainty, we continue to focus on addressing collections capacity issues. We are investing in both people and technology that will increase agent effectiveness,” the lender explained.

The lender saw its total customers also rise 18% from 188,900 to 222,800 which is an impressive figure considering the state of market conditions.

Chief Executive Hamish Paton said: “The first half of the financial year has demonstrated continued demand for our guarantor loan product with solid growth in customer numbers. We are making encouraging progress as we roll out the operational and strategic initiatives outlined in August. While it will take some time to see the full benefits, we are pleased with the positive start we have made.”

Looking ahead, the firm said: “Over the second quarter we have worked hard to address capacity constraints within the business with action plans initiated to drive further improvements. It will take time to see the full benefits of our actions, but we have made a good start in the first half.

“As a result, we have a strong and flexible balance sheet. Our guidance for the full year is unchanged for key operating metrics (net loan book growth, operating cost to income and impairments to revenue), dividend and gearing.”

On Wednesday, Amigo said the review of guarantor loan products by the Financial Conduct Authority had not raised concerns, but did offer areas where “our customer journey could be enhanced”.

Amigo believes the proposed changes will “not fundamentally alter the attractiveness of the guarantor loan product relative to higher cost alternatives for our borrowers”.

On Thursday, the lender clarified the review was “not intended to examine the guarantor loan product itself nor the underlying business model at Amigo”.

Harcus Parker addresses Watchstone Group over Quindell misinformation

Jamie Gordon
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Harcus Parker addresses Watchstone Group over Quindell misinformation
On Thursday, legal firm Harcus Parker announced it had sent a letter before action to AIM-listed tech company Watchstone Group PLC (LON: WTG) – previously Quindell – on behalf of the Company’s shareholders, who lost money as a result of Quindell’s alleged misinformation. Elsewhere in the tech sector; AdEPT Technology Group PLC (LON: ADT) and Echoh PLC (LON: ECK) both posted strong half year results, while Infineon Technologies AG (ETR: IFX) and Microsaic Systems PLC (LON: MSYS)enjoyed revenue hikes. Harcus Parker said the claims would be bought pursuant to section 90A of Financial Services and Markets Act 2000, which deals with misstatements and omissions by listed companies. So far, the Financial Reporting Council has sanctioned KPMG and Arrandco Audit over their conduct in relation to Quindell’s accounts, which involved a failure to “exercise sufficient professional scepticism” – hardly unsurprising to those who know the race to the bottom caused by the auditing cartel. The investigation follows the publication of Quindell’s 2014 accounts, which detailed, “substantial restatements of prior year revenues, profits and net assets. This turned its 2013 £83m profit after tax into a loss of £68m.” An investigation has also been conducted by the Serious Fraud Office into Quindell (Watchstone Group) for more than four years. The claim being heard from Harcus Parker – on behalf of Quindell investors – alleges that Quindell provided misleading information in the following areas:
  • Between 2011 to 2014, Quindell provided misleading information and/or failed to disclose material facts to its auditors;
  • Quindell overstated the revenues and profits it received from claims company TMC (Southern) Ltd, which led in part to the restatement of Quindell’s past accounts;
  • Quindell issued misleading statements on the fees paid to Ubiquity Capital in connection with various acquisitions;
  • Quindell issued misleading statements about the financial performance of PT Healthcare Solutions Corp, a Canadian company in which it bought a 26% stake;
  • Quindell issued misleading statements on the ability of Himex Ltd (now Hubio Solutions Ltd) to enhance the company’s earnings after its acquisition;
  • Quindell issued statements about its planned listing on the full London Stock Exchange when there was no reasonable prospect of this occurring;
  • Quindell delayed disclosing publicly by more than a year that it was being investigated by the Financial Reporting Council;
  • Quindell overstated the likely contribution to its revenue of an increase in noise-induced hearing loss cases;
  • Quindell delayed informing the market that Canaccord had resigned as its joint broker and financial adviser; and
  • Quindell issued misleading statements relating to the financing of directors’ share transactions, including those of former chief executive Rob Terry.
Speaking on the announcement, Partner at Harcus Parker, Jennifer Morrissey, offered the following insight, “Between 2011 and mid-2015, Quindell regularly published upbeat market announcements about its financial good health, when it knew the truth was significantly different.” “We are rapidly building a cohort of shareholders who suffered significant losses when the share price collapsed when the truth started coming out, and we hope Watchstone will recognise the failures of its predecessor and compensate them without the need for a drawn-out legal fight.” The law firm concluded its statement with the following statement, “Shareholders of Quindell between May 2011 and 5 August 2015 may be eligible to join the action. A fact sheet is available here and interested shareholders should contact Harcus Parker direct.”    

ImmuPharma shares soar following US licence agreement for Lupuzor

Ishen Patel
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ImmuPharma shares soar following US licence agreement for Lupuzor

Shares of ImmuPharma PLC (LON: IMM) have soared on Thursday morning after the firm said that it had agreed a new US licensing deal.

ImmuPharma PLC is headquartered in London and has its research operations in France and Switzerland (ImmuPharma AG).

ImmuPharma is dedicated to the development of innovative drugs to treat serious medical conditions, characterised by high unmet medical need, low marketing costs and relatively low development costs.

Shares of ImmuPharma soared 206.38% to 20p. 28/11/19 10:30BST.

The firm has landed a licensing deal worth $100 million for Lupuzor, its drug to treat autoimmune disease lupus.

The group will receive up to $70 million of milestone payments, with $5 million due on regulatory approval of the drug.

ImmuPharma will also get royalties of up to 17% on sales, while there are financial incentives to expand Lupuzor’s use into other autoimmune diseases.

Chief executive Dimitri Dimitriou said Avion had a strong track record of taking late stage drugs through the regulatory process and onto commercialisation.

“Importantly, [its] specialist sales team is well respected within the rheumatologist community, whose focus is on prescribing safe and efficacious treatments for auto-immune diseases such as lupus. This makes it a perfect fit for Lupuzor.”

Avion Pharmaceuticals have said they that will fund the $25 million costs of a reformatted phase three clinical trial next year.

Art Deas, Chief Executive Officer, Avion Pharmaceuticals added: “Avion is extremely pleased to sign this partnership with ImmuPharma. After in-depth due-diligence around Lupuzor™, its mechanism of action and learnings within the initial Phase III results, we believe that Lupuzor™ has a unique position within lupus that sets it apart from competition, and we are delighted to be extending our footprint within this therapeutic area. With approximately 1.5 million patients in the US suffering from lupus, there is a significant unmet need for a safe and effective drug for this debilitating disease that we believe Lupuzor™ can meet. We look forward to forging a strong and successful relationship with ImmuPharma going forward.”

Commenting on the Agreements, Dimitri Dimitriou, ImmuPharma’s Chief Executive Officer and Robert Zimmer, President & Chief Scientific Officer, said:

“We are delighted to be entering into this partnership with Avion, a company which has a strong track record within late stage clinical development and commercialisation of products within the US, the largest market for lupus patients. Importantly, Avion’s specialist sales team is well respected within the rheumatologist community, whose focus is on prescribing safe and efficacious treatments for auto-immune diseases such as lupus. This makes it a perfect fit for Lupuzor™. We look forward to a long and successful relationship with the Avion team and look forward to sharing updates on progress with shareholders over the next period.”

Shareholders will be thoroughly impressed with the announcement made this morning as reflected in the massive surge in share price.

As ImmuPharma have won the backing of Avion, this should allow better products and strategy to exploit long term benefits, which shareholders will be excited to see.

The pharmaceuticals industry has seen a mixed set of results by firm across financial 2019.

Market leaders such as Pfizer (NYSE: PFE) and GSK (LON: GSK) have reported bullish interim updates, which gives them further foot holding the global pharmaceuticals market.

Additionally, Roche (SWX: ROG) announced the acquisition of US drugmaker Promedior last week.

Hong Kong bill leaves little to be thankful for, pound surges on MRP poll

Jamie Gordon
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0
Hong Kong bill leaves little to be thankful for, pound surges on MRP poll
Apparently on the cusp of at least phase one of a trade deal, the Trump administration sent markets reeling on Thursday morning, following the announcement of the Hong Kong pro-democracy bill. While the move can’t be completely lambasted on principle (at least on our end), China’s reaction was as you’d expect. So, has Trump set back negotiations even further, and if so, why now and what is he gaining? We’ll leave those questions for your interpretation. In other news, FTSE led the European indices losers after the bell, not helped by a turnaround in general election odds for the Conservatives, which sent the pound surging through the night. Speaking on the morning’s market movements, Spreadex Financial Analyst Connor Campbell commented,

“Thanksgiving didn’t get off to the happiest start for the European markets, which saw uniform losses after the bell.”

“The reason for the continent-wide decline is the latest mixed signals regarding a US-China trade deal. With Trump stating the two sides are in the ‘final throes’ of negotiations on Wednesday, and a senior administration official claiming a ‘phase one’ agreement is ‘millimeters away’, you’d expect more positivity.”

“However, the fact the US President has signed into law legislation backing pro-democracy protestors in Hong Kong may have caused another obstacle to arise at a crucial juncture. The move prompted Beijing to lambast the bill as ‘full of prejudice and arrogance’, potentially doing damage to the relationship between the superpowers just as things were starting to look up.”

“While not overly panicked, the DAX and CAC nevertheless fell 0.4% and 0.3% respectively. The FTSE suffered slightly more than its peers, a half a percent decline pushing it back below 7400.”

“The FTSE’s losses were exacerbated by the overnight surge from sterling. The pound now sits at a $1.2938 against the dollar and a near-7 month high of €1.175 against the euro after YouGov’s MRP poll – the only survey to correctly predict 2017’s hung parliament – pointed to a Tory majority of 68 seats. This would, presumably, mean the UK is leaving the EU with Boris Johnson’s deal on January 31.”

Other recent updates from the UK market came from UK car production declining, Royal Bank of Scotland Group plc (LON: RBS) announcing the launch of a new digital bank and Brewin Dolphin Holdings plc (LON: BRW) posting their funds report.  

UK car production down for 16 out of last 17 months

Dina Caruso
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UK car production down for 16 out of last 17 months
British car production has declined for 16 out of the past 17 months, new data revealed on Thursday. The Society of Motor Manufacturers and Traders announced on Thursday that UK car manufacturing output dropped by 4% in October, when compared to the same month a year prior. Indeed, 5,622 fewer models were produced in comparison to last October. The Society of Motor Manufacturers and Traders added that August is the only outlier of the past 17 months, “due to ‘no deal’ Brexit contingency shutdowns earlier in the year artificially boosting output that month”. Meanwhile, production for the home market dropped by 10.7%, with consumer and business confidence continuing to diminish. Additionally, orders from overseas were down by 2.6%, because of “soft demand in some key markets”. “Yet another month of falling car production makes these extremely worrying times for the sector,” Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders, commented on the data. “Our global competitiveness is under threat, and to safeguard it we need to work closely with the next government to ensure frictionless trade, free of tariffs, with regulatory alignment and continued access to talent in the future,” the Chief Executive continued. Mike Hawes said:”This sector is export led, already shipping cars to more than 160 countries, and in a period of unprecedented change a close trading relationship with the EU and preferential trading with all these other markets will be essential to keep automotive in Britain.” The UK was granted yet another extension to its EU departure deadline at the end of October. Parties now prepare for a general election to be held later this year on the 12th December. A new poll recently revealed that the Conservatives are set to win 359 seats, giving the party a majority of 68 seats.

Union Jack Oil shares crash following share placing announcment

Ishen Patel
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3
Union Jack Oil shares crash following share placing announcment

Union Jack Oil PLC (LON: UJO) have seen their shares sink despite an announcement that the firm had raised £5 million through a share placing scheme.

Union Jack Oil plc is an onshore oil and gas exploration company with a focus on drilling, development and investment opportunities in the United Kingdom hydrocarbon sector.

Shares of Union Jack Oil sunk 4.41% to 0.16p on Wednesday afternoon. 27/11/19 15:28BST.

Competitors in the industry such as Shell (LON: RDSA) and SABIC (TADAWUL: 2010) have seen third quarter profits sink following volatile oil prices.

Whilst Egdon Resources (LON: EDR) and Premier Oil (LON: PMO) have seen their shares spike following impressive trading updates.

The UK-focused oil exploration company has raised the new money via placing of 2.93 billion new shares at 0.15 pence each and subscription of 404.3 million shares at the same price.

“The proceeds will be deployed into what Union Jack believes are highly accretive projects including the drilling and testing of two further appraisal wells and the acquisition and reprocessing of new seismic data at the company’s flagship asset at West Newton,” the Bath-based company said.

David Bramhill, executive chair of Union Jack, said: “The directors are extremely confident about the future prospects for Union Jack and look forward to updating the market on developments at West Newton and our wider portfolio.”

Joseph O’Farrell, an executive director, subscribed for 33.3 million shares in the fundraising. Following the purchase, O’Farrell owns a 1.8% stake in Union Jack.

Particularly in the oil and gas industry, there has been a recent increase in firms using share placing to raise funds for capital projects.

Shareholders seem to have reacted to this with a pessimistic tone, as reflected as the stock price movements across Wednesday.

There could be long term benefits for Union Jack Oil, if the firm can exploit the benefits in expanding its’ drilling projects.

Shareholders should not be so grieved about the share placing, and although immediately shares have sunk, in the longer term rewards may be seen.

Earlier this year, the firm reported that the firm expanded its operating loss despite modest revenue growth and this has kept shareholders on edge.

Certainly, shareholders will have to be patient with the firm, however if benefits of the share placing aren’t exploited then Union Jack could see their shares hit red.

Fastjet shares plummet following considerations to sell Zimbabwe operations

Ishen Patel
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2
Fastjet shares plummet following considerations to sell Zimbabwe operations

Shares of Fastjet PLC (LON: FJET) have crashed on Wednesday afternoon after the firm speculated about selling its Zimbabwe unit.

Fastjet Plc is a British/South African-based holding company for a group of low-cost carriers that operate in Africa.

Shares crashed 34.55% to 0.36p. 27/11/19 14:48BST.

The firm said that it was considering selling its Zimbabwe operations in a restructuring deal. Fastjet added that profitability remained elusive amid Mozambique issues and tough market conditions.

It seemed that earlier this year fortunes had changed hands for Fastjet, after the firm reported a rise in revenues and narrowed losses back in July.

However, this optimism was short lived as the firm is now fighting to stay afloat in the market.

On October 21, Fastjet announced it suspended flight operations in Mozambique amid “ongoing supply and demand challenges”.

During the first six months of 2019, revenue from Mozambique had fallen to $2 million from $4 million the year prior.

While the group’s FedAir operation remains resilient and is expected to be profitable for the year, this has been off-set by the continued volatility and uncertainty in the Zimbabwean market,” Fastjet said in a statement.

“Fastjet Zimbabwe has increased its year on year revenue despite the difficult trading conditions following the introduction of a new currency which effectively devalued the existing currency by up to 15 times its previous value at official rates and has pushed inflation rates to above 200%,” Fastjet added.

In order to continue trading in its current form, however, Fastjet warned it expects to need further funding by the end of February.

Fastjet is currently in dicussions with shareholders about options to raise equity or plans to restructure the firm.

This restructure would involve Fastjet selling its Zimbabwe business for $8.0 million to a consortium which includes Solenta Aviation Holdings Ltd, currently a 60% shareholder in Fastjet.

The Zimbabwe sale would also relieve Fastjet of $5.4 million in debt and $3.2 million in future aircraft orders.

The proceeds from the sale would be used to fulfill debt obligations and fund future capital projects into 2021.

“The disposal, if agreed, approved and implemented, would be expected to de-risk the significant uncertainty and cash drain that shareholders have historically suffered and allow the group to continue operating under a more stablised and simpler business model,” Chief Executive Officer Mark Hurst said.

“This revised strategy allows the group the opportunity to create a single fastjet brand throughout key markets in Africa, leverage its key intellectual property of its brand and airline management solutions and invest in viable, already-established airlines where it can,” Hurst added.

In the airline industry there have been mixed experiences varied by each firm, and results have been sporadic.

Fastjet will have to be careful that they don’t end up with the same fate as Thomas Cook (LON:TCG), who recently collapse in September.

Amid tough market conditions, big players such as IAG (LON: IAG) and Ryanair (LON: RYA) have cut their medium term profit forecasts leading to skepticism from shareholders.

Additionally, IAG announced at the start of the month that they will purchase Europa Air which has alerted competitors such as Ryanair and easyJet (LON: EZJ)

Egdon Resources shares spike on two renewed gas licenses

Ishen Patel
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1
Egdon Resources shares spike on two renewed gas licenses

Shareholders of Egdon Resouces Plc (LON: EDR) have seen their shares spike on Wednesday afternoon after the firm secured a gas licence extension.

Egdon Resources plc is an independent onshore focused oil and gas exploration and production business. The firm is an established oil and gas exploration and production business with 44 licenses in proven oil and gas producing basins in the UK

Shares of Egdon resources spiked 8.31% to 3.2p. 27/11/19 14:31BST.

Big name competitors such as Shell (LON: RDSA) and SABIC (TADAWUL: 2010) have seen third quarter profits sink following volatile oil prices.

Additionally, both Nostrum Oil and Gas (LON: NOG) and Chariot Oil and Gas (LON: CHAR) saw their shares crash following modest updates.

Earlier in November, Egdon saw their shares sink following fracking bans from the government, but it seems that Egdon have bounced back from the setback.

The firm updated shareholders saying that it had received a six month extension for two UK offshore gas licenses.

The UK Oil & Gas Authority extended the period for the P1929 and P2304 licences until the end of May 2020.

With the new extension, the firm will be able to execute a farm-in deal for the licenses to provide funding for the projects by the end of January.

P1929 has estimated contingent gas resources of 231 billion cubic feet of gas and P2304 another 18 billion cubic feet.

“We are pleased to have secured extensions from the OGA for both P1929 and P2304 which contain the Resolution and Endeavour gas discoveries, key conventional projects for Egdon,” Managing Director Mark Abbott said. “This follows on from our recent announcement of securing an exclusivity agreement with a large internationally recognised exploration and production company as our preferred partner for Resolution and Endeavour.”

“Today’s news represents further positive progress for these projects and results from the proactive and constructive engagement between Egdon, the Counterparty and the OGA,” Abbott added. “Having secured the licence extensions, our focus now turns to finalising a farmout agreement and we look forward to updating shareholders on progress in this regard in the New Year.”

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