Charles Taylor shares rally on takeover offer
Charles Taylor PLC (LON: CTR) shares have rallied after a takeover offer was agreed with Lovell Minnick, the proposed fee was higher than the bid originally received in September.
Directors of the insurance support services provider gave the green light on a 315p per share offer from US private equity firm Lovell two months ago.
However, Charles Taylor has revealed today that the offer has been increased to 345p per share after the initial bid brought rival suitors into the fray.
The global insurance industry has seen a tough trading period, where the big names have seen shrinking profits and attempts to reduce costs.
Aviva (LON: AV), one of Charles Taylor’s heavyweight competitors announced in June that they had plans to cut 1,800 jobs.
Additionally, Lloyd’s (LON: LLOY) reported a drop in their third quarter profits at the end of October,
The board said it had received “a number of unsolicited approaches” from other interested parties but these had been terminated following the initial announcement with Lovell.
However, the higher bid submitted by Lovell seemed to appease stakeholders at Charles Taylor, which allowed negotiations to gain momentum.
The acquisition is one that will benefit both parties, giving access to a wider client base and the opportunity to seize a market which is in apparent decline.
After the previous announcement, Charles Taylor chief executive David Marock said the company owed its achievements to the staff, innovation and client service.
“I am confident that this acquisition by Lovell Minnick, a highly regarded investor with experience in our markets, will provide Charles Taylor with the opportunity to continue to deliver on its existing growth strategy,” he said.
As the deal gains momentum, regulatory approval will still be required. The offer remains conditional on shareholder approval at an upcoming general meeting, and gaining approval from the UK Financial Conduct Authority, Prudential Regulation Authority and insurance market Lloyd’s of London.
Subject to approval from Isle of Man and Bermuda authorities, the deal is expected to be completed in the early months of financial 20.
Standard Chartered cut CFO and CEO pension allowance
Standard Chartered PLC (LON: STAN) have announced that the pension allowance for their Chief Financial Officer and Chief Executive Officer will be cut following discussions with shareholders.
Bill Winters and Andy Halford who are CEO and CFO respectively, will see their pension allowance cut after shareholders informed the board of their concerns in the Annual General Meeting in May.
The leadership of Winters and Halford has produced success, as Standard Chartered reported strong third quarter gains at the end of October.
This was a particularly impressive achievement considering the state of the global banking industry
Where competitors such as Lloyds (LON: LLOY) and HSBC (LON: HSBA) saw their third quarter profits sink, Standard Chartered and Bank of Ireland (LON: BIRG) made steady headways.
At the AGM, 37% of shareholders voted against the resolution to approve the Asia-focused bank’s remuneration report, while all other resolutions were passed with 90% or higher votes in favour.
After discussions with concerned shareholders, the Committee has made several changes to the remuneration of certain executive directors.
This includes changing the contractual terms for Winters and Halford, reducing their pension allowance from 20% of salary from 10% of salary with effect from the start of 2020.
Winters’s pension allowance will be reduced by 50% to £237,000 from £474,000, while Chief Halford’s pension allowance will also be cut by 50% to £147,000 from £294,000.
“I would like to thank Bill and Andy for their willingness to agree to these changes and to thank our shareholders and their representatives for engaging constructively with the Remuneration Committee, and for the strong support that they share with the board for our executive directors. The changes we are making will align the current executive directors’ pension allowances with other UK employees with effect from January 1, 2020,” said Christine Hodgson, chair of StanChart’s Remuneration Committee.
Shares in FTSE100 (INDEXFTSE: UKX) dipped 0.38% to 730p as a result of this announcement. 8/11/19 13:24BST.
Phoenix Group announce new senior appointment
Phoenix Group Holdings (LON: PHNX) have announced that the will be appointing a new Chief Executive in a statement released on Friday morning.
The big time insurance firm said that current Group Chief Executive Clive Bannister would be replaced by former Aviva (LON: AV) boss Andy Briggs next year.
Mr Bannister announced today that he will retire on March 10, 2020 after nine years with the business.
The FTSE100 (INDEXFTSE: UKX) listed insurance company expressed their gratitude to Bannister, who held a successful tenure in his role.
During his time at Phoenix, Mr Bannister oversaw a series of acquisitions, including the £2.9bn purchase of Standard Life Assurance (LON: SLA) in 2018.
This move gave Phoenix the market status that they needed, after becoming a FTSE100 listed company.
He also achieved a total shareholder return of 179% at the company, and grew assets under management by 263% to £245 billion, according to Phoenix.
This was a particularly impressive accomplishment considering the current state of the finance market.
Big players such as Lloyd’s (LON: LLOY) have seen their profits sink in the most recent quarter, and other names such as AIG (NYSE: AIG) have struggled to gain ground after testing trading conditions.
Additionally, the firm also increased the number of policy holder to 10 million whilst he was in his role, seeing an increase of 67%.
Mr Briggs will join the company as chief executive officer on January 1 to ensure a smooth handover, subject to regulatory approval.
Briggs, has a wealth of experience in the industry having worked at Friends Life and be a managing director of pension provider Scottish Widows.
Nick Lyons, Phoenix Group chairman, said: “Clive has worked with great passion and energy during his nine years as CEO. He has led Phoenix in a period of sustained growth and success to its current position as the largest life and pensions consolidator in Europe and he leaves us, as a business, confident and assured.
“Phoenix, its customers, colleagues and investors will benefit from the smoothest of successions between two great industry leaders and, with Andy as our future CEO, we will be in the best position to leverage the broad strategic platform that Clive has delivered.”
Shares of Phoenix Group are trading at 431. 8/11/19 13:09BST.
REC: “modest” rise in demand for staff, uncertainty prevails
October saw a “modest” rise in the demand for staff across the UK, new data revealed on Friday.
The UK Report on Jobs data, by KPMG and the Recruitment and Employment Confederation (REC), shows that the rate of vacancy growth was the slowest to occur since January 2012.
Demand for both permanent and short-term workers were weak.
The data revealed that an uncertain outlook also weighed on candidate availability during the month of October. Indeed, total candidate numbers dropped at the sharpest rate in four months.
“These figures underline why this needs to be a jobs election,” Neil Carberry, Recruitment and Employment Confederation Chief Executive, commented on the data.
“The labour market is strong, but permanent placements have now dropped for eight months in a row, and vacancies growth has fallen to its lowest level since January 2012. One bright spark is the temporary labour market, which continues to provide flexible work to people and businesses that need it during troubled times,” Neil Carberry continued.
Neil Carberry said: “Ending political uncertainty and getting companies hiring again is vital – but we must also look to the long term future of work. Jobs must be front and centre during this election campaign, and we will be launching our REC manifesto for work next week. We will be urging all political parties to run on policies which support and enhance the UK’s flexible labour market – allowing businesses to create jobs, employees to build careers and the economy to grow.”
The UK was supposed to depart from the European Union at the end of October, but it was granted yet another extension to the deadline.
Parties are now preparing for the general election at the end of this year.
“Businesses are still waiting to hear that starting gun, and until there is some certainty around Brexit and now the election, employers continue to stall on creating vacancies and making permanent hires,” James Stewart, Vice Chair at KPMG, also commented on the data.
James Stewart said: “The IT and computing sector threw caution to the wind last month as the best performer in vacancy growth. Meanwhile, the medical sector is not far behind, and we also saw a sharp increase in the demand for temp staff in this sector.”
News emerged only yesterday that the Bank of England expects a weaker economy over the next three years following the nation’s departure from the European Union.
With Brexit uncertainty prevailing, what will the future hold for employers and their staff?
IAG cut medium term profit and capacity expectations
International Consolidated Airlns Grp (LON: IAG) owners of British Airways, have cut their expectations for medium term profits and capacity in a statement released on Friday morning.
Shares of IAG dipped 0.26% as a result of this update, to trade at 543p. 8/11/19 11:06BST.
The heavyweight airline company scaled back profit and capacity forecasts for the next three years, hitting its outlook for earnings per share but potentially providing relief for rivals in a weak global economy.
On Monday, it was reported that IAG were set to purchase rivals Europa Air which alerted competitors such as Ryanair (LON: RYA) and easyJet (LON: EZJ) to report this deal to market watchdog’s for investigation.
Even after this acquisition, IAG are not as optimistic about future outlook in the medium term.
IAG said available seat kilometres, a measure of passenger-carrying capacity, was estimated to grow by 3.4% a year between 2020 and 2022, compared to a previous forecast of 6% growth a year for the 2019-2023 period.
The airline group, which also owns Iberia, Aer Lingus and Vueling, said the capacity growth cut would lower its forecast for growth in earnings per share to 10%+ a year from a previous forecast of 12%+ a year.
Chief Executive Willie Walsh said last week that he expected global macroeconomic toils to continue in 2020.
The company has also taken a hit from industrial action at British Airways, which has knocked its outlook for profits this year.
The airline industry has become increasingly saturated over the years, and has led to fierce competition in ticket prices and on flight facilities.
Additionally, Ryanair have also slashed their medium term forecasts as it is set to grow at its slowest rate in seven years in the year to March 31, 2021.
Ryanair expect further delays to its Boeing (NYSE: BA) 737 MAX deliveries and may be without the jets next summer.
The delays in delivery will come as a worry to IAG, who recently ordered 200 new 737 planes to expand their flight routes whilst compensating for health and safety regulation.
Even with the new acquisition of Europa Air, there is still much ground to be made up for IAG as they look to fight off stiff competition in an ever saturated airline market.
Merger talks between T-Mobile and Sprint gain momentum
A merger deal involving T-Mobile (NASDAQ: TMUS) and Sprint (NYSE: S) hit headlines a while back, however it has been reported during Friday trading that these talks have gained momentum.
Chief Executive John Legere on Thursday acknowledged talks are ongoing with Sprint Corp to extend their merger agreement.
As reports suggest a $26 billion price tag was put on the table, Legere has refused to comment as to whether this was a hinderance to the deal being formalized.
Yesterday, it was reported that Deutsche Telekom (ETR: DTE) would reduce their dividends to shareholders regardless of whether this deal would be completed or not.
The deal has won regulatory approval from the Justice department and Federal Communications Commission, but faces a current lawsuit from state legislators to stop the deal.
“What I can say is yes we are having conversations as partners about whether and how long we move forward the date… and what if any items should be agreed between the parties in exchange for agreeing to extend those terms,” Legere said during a webcast to discuss next generation 5G wireless and other issues.
“It’s not a hostile conversation. It’s an active one,” he said, while giving no sense of when agreement might be reached.
“It’s sort of like going to month-to-month on your rent. There’s no more lease. You continue to move forward.”
Sprint said it was not backing away. “We continue to be committed to completing the merger with T-Mobile,” Sprint spokeswoman Lisa Belot said in an email.
Legere also added that a new merger agreement’s terms could entail “‘How do you handle things that have happened that need to possibly to be indemnified, how do you agree on future things that you will share in order to settle the deal, etc.’ It’s a broad array of things.”
The company had announced plans to implement their 5G mobile network on December 6, as rivals Vodafone (NSE: IDEA) prepare for the big launch.
We’ve had very frank discussions,” Legere said. “We have made settlement proposals as ways to continue those conversations.”
Honda cut their profit and sales forecast
Honda Motor Co Ltd (NYSE: HMC) have cut their profit and sales forecast to a four year low, as the Japanese car maker seemed pessimistic about future outlook.
Honda cited a stronger yen and poor business performance in both India and its main market of North America. Additionally, Honda reinstated their plans to buy back $915 million shares in an attempt to recover lost ground.
The global automotive industry has seen as massive slump, and particularly in the UK and American market, production and sales have crashed.
Amidst the falling demand and production levels, firms have been quick to respond including a significant merger deal between Peugeot (EPA: UG) and Fiat Chrysler (NYSE: FCAU).
Honda have not been the only firm who have experienced declines in overseas trading, as it was reported that Suzuki (TYO: 7269) had also seen a profit slump due to poor performance in the Indian market.
Japan’s third-largest automaker now expects an operating income of 690 billion yen for the year to March, lowest since the year-ended March 2016, from 770 billion yen previously.
Additionally, Honda have operations in the motorcycle industry. However, this sector was hit by falling sales, as they slipped 20% over the six months to September in India.
“The Indian market is contracting at a very rapid rate,” said Honda Executive Vice President Seiji Kuraishi. “I must say, we are struggling there.”
The company cut its outlook for global group auto sales to 4,975,000 vehicles, versus a previous forecast of 5,110,000, for the current financial year.
Honda officials acknowledged that more needs to be done to reduce costs. They said a promised restructuring is under way.
Whilst the global automotive industry is in a tough period of trading, rivals such as Toyota (NYSE: TM) reported its sales grew in key global regions.
This will come as a worry to both seniority and investors of Honda, and a major overhaul will be needed in order to increase competitiveness and ensure that demand is stimulated.
Games Workshop shares surge on profit expectations
Games Workshop Group PLC (LON: GAW) have seen their shares surge amidst speculation that there will be strong profit gains in their next trading update.
The firm reiterated strong trading and a solid increase in profit and revenue for the first half of its financial year, which spurred shareholder optimism.
Amidst a tough time of trading for UK high street retailers, this will come as a relief for shareholders as UK markets stagnate due to Brexit complications.
Established high street retailers such as Marks and Spencer (LON: MKS) have seen their profits sink amidst slow business rates, leading to mass store closures all over the country.
Additionally, TheWorks (LON: WRKS) have also seen their shares left in red as profits slump due to slow retail business. Earlier this week Mothercare entered administration (LON: MTC) as the baby goods firm descended into collapse, alluding to a bigger problem on the high street.
Game Workshop however, did not fall victim to this slump. Shares in the FTSE250 (INDEXFTSE: MCX) listed firm were 14.45% to the good, at 5,157p per share. 8/11/19 10:09BST.
For the six months trading period ending December 2, Games Workshop expects pretax profit to be no less than £55 million, and sales to be at least £140 million.
This shows a 34% rise from £40.8 million pretax profit, and an 11% climb from £125.2 million in revenue the year before.
The update arrived on the back of ongoing momentum in recent months, with royalty growth driven by the ‘timing of guarantee income on signing new licences,’ Games Workshop said.
This morning’s statement said: “Following on from the group’s update in September, trading to 3 November 2019 has continued well.
“Compared to the same period in the prior year, sales and profits are ahead. “Royalties receivable are also significantly ahead of the prior year driven by the timing of guarantee income on signing new licences.”
Bank of England expects weaker economy after Brexit
The Bank of England published its formal forecast of the economic impact of Prime Minister Boris Johnson’s Brexit deal.
