Theresa May steps down as Tory leader
Theresa May stepped down as leader of the Conservative party on Friday, clearing the way for her successor.
Theresa May will continue on as Prime Minister until a new leader has been chosen by the party in July.
She announced her resignation two weeks ago after eventually bowing to intense pressure from party faithfuls and Tory MPs.
Dissent within the party and amongst the public had been bubbling for months, particularly as May was seen as failing on her promise to deliver Brexit.
This was despite famously having touted the line ‘Brexit means Brexit’ throughout the course of her premiership.
Ultimately, May failed to secure enough support for her withdrawal bill in the commons, a deal MPs voted down three times, one of which proved a historic defeat for any British government.
She was also often condemned for her campaigning and leadership style, which many labelled ‘robotic’.
The Conservative’s failed to secure a majority in the 2017 election, with many attributing the poor electoral performance to the lacklustre campaigning skills of the Prime Minister.
Lacking a majority in parliament only further weakened the authority of the PM, as she became increasingly garner enough support to pass crucial Brexit legislation in parliament.
Given that Brexit has come to define her premiership, this has proved a significant failure and has meant that dampened May’s hopes in securing a political legacy.
As it stands, the frontrunner in the Conservative leadership race is former foreign secretary, Boris Johnson, who also was the Mayor of London.
Jeremy Hunt and Michael Gove are also key contenders to succeed the Prime Minister.
Find out about some of the tory leadership hopefuls here.
Stada to acquire Savlon and five other brands
Pharmaceutical company Stada (OTCMKTS:STDAF) announced its acquisition of six brands on Friday, one of which is the well-known UK brand Savlon Antiseptic Cream.
Based in Bad Vilbel, Germany, the acquisition will allow Stada to continue to expand its consumer health business in Europe and selected markets in Asia and Latin America.
As of 2018, the company employed roughly 10,416 workers across the globe.
The portfolio includes five skin care bands as well as a paediatric cough remedy from GlaxoSmithKline (GSK), a British multinational pharmaceutical company headquartered in Brentford, London. These brands include Oilatum, Eurax, Savlon Antiseptic Cream, Ceridal, Tixylix and Polytar (which is known under the brand name Tarmed in Portugal and Spain).
Among the six brands lies Savlon Antiseptic Cream, a particularly well known brand in the UK. The cream assists in soothing and preventing infections, aiding the natural healing of minor skin disorders.
The five skin care brands will be transferred to Thornton & Ross, Stada’s British subsidiary.
The deal is expected to be completed in August and is reported to lie in the high double digit million-pound range, according to Sky News.
“We look forward to giving these great brands a new home and a great future,” Roger Scarlett-Smith, Head and Executive Vice President of Stada‘s UK business, commented.
All of the brands acquired by Stada each have a strong brand heritage and offer the opportunity for accelerated revitalization and growth.
“This will strengthen STADA’s position as a go-to partner in the European Healthcare market, and will seize the opportunity to be a leading company in Consumer Health as well as Generics,” CEO Peter Goldschmidt commented on the acquisition.
Stada sells its products in roughly 130 countries across the globe. In its 2018 financial year, the company posted adjusted group sales of €2,330.8 million and an EBITDA of €503.5 million.
As of 13:37 BST Friday, shares in GlaxoSmithKline plc (LON:GSK) were up 1.28%.
Somero Enterprises – grey clouds over guidance
Building services technology firm Somero Enterprises Inc (LON: SOM) have seen their share price dip in Friday morning trading after the company announced that it had downwardly revised its revenue and earnings guidance.
The Company, which manufactures machinery such as laser-guided hardware used in the process of horizontal concrete placement, said its earnings had been weighed down by record rainfall in the US, which had delayed project undertakings.
The US is the company’s largest market, and the adverse weather conditions pulled trading results for the five months through May 2019 below management expectations.
Net cash at the end of 2019 was now expected to be approximately 418 million, with revenue down to $87 million and Ebitda at around $28 million.
Somero Enterprises comments
“The record rainfall seen in the US has delayed project starts which in turn has slowed the pace of equipment purchased by our customers, the impact of which was seen through historically strong trading months of March and April,” Somero said in its statement. “Whilst there was an improvement in trading to end the month of May, and although the company expects weather conditions and therefore trading in the US will improve throughout the rest of 2019, the board now does not expect the company to fully recapture the shortfall caused by this extended period of poor weather in the current financial year.”Trading updates
The Company’s share price has dipped in Friday morning trading, down 21.13% or 75.02p to 279.98p per share. Analysts from finnCap have retained their ‘Corporate’ stance on Somero Enterprises stock.FCA bans high bank overdraft fees
The Financial Conduct Authority (FCA) is set to ban banks from charging high overdraft fees, as part of a radical reform to the industry.
Under the measures, banks will no longer be able to charge steeper prices for un-arranged overdrafts than for arranged overdrafts.
The FCA has also moved to ban fixed fees for borrowing through an overdraft. This will also mean no daily or monthly fees or fees for customers using an overdraft facility.
The plans will also mean that firms will have to take greater steps to identify customers ‘showing signs of financial strain or are in financial difficulty’.
According to FCA figures, British banks made £2.4 billion from overdrafts in 2017. 30% of was as a result of un-arranged overdraft fees.
The new rules were initially proposed back in December, and are set to come into effect by April 2020.
Andrew Bailey, the FCA’s chief executive, commented: “The overdraft market is dysfunctional, causing significant consumer harm. Vulnerable consumers are disproportionately hit by excessive charges for unarranged overdrafts, which are often 10 times as high as fees for payday loans.”
Surgical Innovations shares dive on profit warning
Minimally invasive surgery technology company Surgical Innovations Group Plc (LON: SUN) has seen its share price dip dramatically on Friday morning, following their announcement that their annual profits were likely to fall.
The Company said that its predictions of a fall in profit were driven by Brexit uncertainty and NHS funding pressures, both of which had weighed sales down.
Surgical Innovations said that the UK market had remained relatively muted by the degree of activity in the NHS, but also more widely, the Company added that the modest sales growth that it saw in Q1 had been offset by lower-than-expected orders in Q2 across UK and EU markets. Further, new entrants were facing new challenges with regulatory approvals proving harder to achieve.
With all pressures considered, the Company reported that it was unlikely that H2 revenue growth would be able to fully mitigate the effects of a to-date stagnant second quarter.
Surgical Innovations Group comments
Following the investor update, the company said in its statement,
“The disruption to order patterns by distributors and end users caused by Brexit uncertainties has made visibility of true demand more difficult than normal,” Surgical Innovations said.
“It is anticipated that this volatility is likely to continue until matters are resolved.”
“Whilst a funding crisis was largely avoided last winter, hospitals continue to deliver a reduced level of elective procedures,”
“They also place an increasing burden on operational and technical resources, and we continue to build a strong and expert team in this area.”
“Recent redeployment of key personnel to support this activity has inevitably had a short-term impact on the introduction of new products, as well as line extensions of our current range.”
“Delays in the regulatory approval process are symptomatic of the severe contraction in the number of approved regulatory bodies in Europe.”
“In addition, extra resources will be put in place as we move towards medical device regulation.”
“This is likely to affect both the cost and timescale of introduction of new products across the industry.”
“Full year expectations for revenue will exceed those of the prior year by a more modest rate of growth than previously anticipated,”
“Whilst margins are expected to remain in line, overheads will reflect the investment in additional resources devoted to operational and regulatory matters.”
“Accordingly, adjusted profit before tax is expected to be below the level achieved in 2018.”
“The group currently holds net cash and continues to be cash generative.”
Trading notes
After diving below 30% shortly after markets opened on Friday morning, the Company’s shares are now down 26.83% or 1.1p to 3p a share.CVC Credit Partners European Opportunities secures £23.7m after placing
CVC Credit Partners European Opportunities announced on Friday that it has raised £23.7 million as a result of a share placing.
The company said that a total of 21,945,963 shares have been issued at the placing price of £1.0795 per share, which will be listed on the main market of the London Stock Exchange.
The new shares are expected to commence trading on June 11th.
Following admission, the firm will have 359.2 million sterling shares and 127.9 million euro shares in issue.
The company also has 21 million sterling shares and 4.7 million euro shares in the treasury.
CVC Credit Partners European Opportunities has been listed in London as of 2013. It is incorporated in Jersey.
The firm has exposure to European senior secured loans and other sub-investment grade corporate credit.
Shares in the firm (LON:CCPG) are currently trading down -1.16% as of 11:00AM, as investors react to the announcement.
Elsewhere in the financial sector, AJ Bell (LON:AJB) shares tumbled on Friday on news that an investor had sold his £144.4 million stake in the firm.
Ferrexpo rallies on increased earnings expectations
Swiss-based commodity trading and mining firm Ferrexpo Plc (LON: FXPO) has seen its share price rally on Friday morning, following their announcement of an expected increase in first half earnings.
The Company released a more positive update than another mining group on Wednesday and said that it expected its H1 earnings to increase ‘materially’ on-year. This increase would be driven by higher sales volumes, production and pricing.
Ferrexpo said that it would likely benefit from lower input costs and while average production costs were likely to increase on-year, “has been lower than expected due to a fall in the Brent oil price and the European gas price partially offset by an appreciation of the Ukrainian Hryvnia versus the US Dollar,” the company said in its statement.
Ferrexpo comment
“Ferrexpo continues to be well positioned to supply a high quality iron ore product to the top steel mills in the world receiving a record price premium for its product. The Group’s balance sheet remains strong with net debt expected to further reduce compared to 31 December 2018,” said Steve Lucas, Chairman of Ferrexpo. “The Independent Review into how Ferrexpo’s donations to a third party charity in Ukraine were used remains ongoing. The Company will make an announcement to shareholders when the Independent Review Committee completes its work. To date, after a significant amount of work on the part of our forensic accountants and legal advisors, there has been no conclusive evidence of any wrongdoing.”Trading update
The Company’s share price has rallied during trading on Friday morning, up 10.2p or 4.27% to 249p a share 07/06/19 10:43 GMT. Analysts were unable to find a consensus on Ferrexpo stock, with Deutsche Bank reiterating their ‘Buy’ stance, Barclays Capital reiterating their ‘Overweight’ rating and Liberum Capital upgrading their stance from ‘Hold’ to Buy’.Less permanent staff hired in May as Brexit looms over UK jobs market
Employers across the UK hired less permanent staff in May as Brexit uncertainty weighs on the jobs market, according to the Recruitment and Employment Confederation’s monthly report.
The number of people appointed to permanent job roles dropped for the fourth time in the past five months in May, occurring at a quicker pace than in April.
Additionally, temp billings grew only marginally as growth reached a 73-month low, according to the report.
In many cases, hiring activity was said to be dampened by uncertainty, in addition to the weaker demand for staff compared to earlier in the year.
“Brexit uncertainty continues to dampen the jobs market as companies kept their recruitment decisions on hold in May. Permanent staff appointments fell at a slightly faster pace than in April, while subdued confidence ensured that growth in temporary billings hit a six-year low,” James Stewart, Vice Chair at KPMG, said in the report.
Recruitment agencies indicated a slightly stronger growth in overall vacancies throughout May, but this growth remains close to April’s 80-month low.
Moreover, the uncertainty surrounding Brexit and generally tight labour market conditions are considered key factors for weighing on candidate availability during the month.
“The survey again shows what uncertainty does to hiring plans. Total permanent placements fell again this month while temporary billings grew only marginally. Recruiters are reporting that demand for staff is slowing and their clients are reducing business activity on average,” Neil Carberry, Recruitment and Employment Confederation Chief Executive, commented on the results.
With the official Brexit departure date extended to 31 October, a rather poetic ending to Britain’s time in the EU, uncertainty continues to prevail across the UK.
“Worryingly, these trends are most pronounced in key sectors like retail and construction,” Neil Carberry continued.
In the retail sector, data from the British Retail Consortium shows that roughly 70,000 jobs were slashed in the final months of 2018.
Halfiax: UK house prices rise in latest quarter
UK house prices rose 5.2% during the three months to May 2019, according to data posted by Halifax.
This increase occurred at the fastest annual rate since the start of 2017.
House prices in the three months to May were 5.2% higher than in the same three months a year prior. The nation’s largest mortgage lender added, however, that May’s annual change does come against a backdrop of particularly low growth rate during the same period in 2018, which has therefore impacted year-on-year comparisons.
In the latest quarter, house prices were 2.5% higher than in the preceding three months. Equally, on a monthly basis, house prices grew by 0.5%.
“We saw a slight increase in house prices between April and May, but the overall message is one of stability. Despite the ongoing political and economic uncertainty, underlying conditions in the broader economy continue to underpin the housing market, particularly the twin factors of high employment and low interest rates,” Russell Galley, Managing Director at Halifax, commented on the data.
Indeed, Halfiax’s figures for January reveled that UK house prices were down 2.9%, and it was thought that buyers may have been deterred by the prevailing Brexit-related uncertainty.
2019 also began with data from the Office for National Statistics revealing that house prices in London specifically dropped 1.2% month-on-month in November.
“This is supported by industry-wide figures which suggest no real change in the number of homes being sold month to month, while Bank of England data show the number of mortgages being approved rose by almost 6% in April, reversing the softness seen in the previous month,” the Managing Director continued.
“Looking ahead, we expect the current trend of stability based on high employment and low interest rates to persist over the coming months, though clearly any downturn in the wider economy would be keenly felt in the housing market.”
The data from Halifax also shows that the average price for a home during the period amounted to £237,837.
Amino Technologies expects H1 revenue dip
Media technology company Amino Technologies Plc (LON: AMO) have noted that they are expecting revenues for the first half of the financial year to fall 15%, on the back of the Company having made ‘good progress’ with its transformation programme which is targeting $5 million in cost savings.
The Company announced that its turnaround programme, which after being announced in February and completed in April this year, was expected to deliver annual cost savings of $5 million as planned.
As of May 31st, the Company had accrued net cash of $19.3 million, from $15 million a year earlier and reflecting what the Company described as strong margins and cash conversion.
For the half which ended May 31st, Amino expected revenues to fall approximately 15% to $35 million, down from $41.2 million a year earlier.