Capita received net proceeds of £118m upon completion of the sale, including an additional £3m in contingent consideration, after accounting for cash-like and debt-like items.
Following receipt of all relevant permits, the transaction is completed. The gains will be utilised to strengthen the balance sheet and decrease debt after covering transaction fees.
Capita shares gained 3% to 21.5p on Friday following the news of completing the sale to One Equity Partners.
Shares in the Sanne Group fell 0.2% to 912p in early morning trading on Friday after the firm released an 85.5% decrease in statutory operating profits following a series of acquisitions over 2021.
The corporate services firm reported a 14.4% increase in net revenue to £194.2 million against £169.7 million in 2020.
Sanne noted its 48.4% increase in new business over 2021, representing a £33.4 million boost in revenue.
The company highlighted its 12.9% rise in underlying operating profit to £54.2 million compared to £48 million in 2020, however the firm noted a statutory operating profit loss of 85.5% to £3.5 million against £23.9 million in 2020.
The group attributed the lowered statutory operating profit to a series of new acquisitions which joined the company at a lower profit margin, and a surge in new business requiring short-term scaling-up of client service teams ahead of full revenue recognition.
The firm acquired PEA and Strait in a bid to expand its presence in Scandinavia, alongside its reported acquisition of the PraxisIFM Group fund administration business, which contributed to the group’s presence in Guernsey, UK, Malta, Jersey and Luxembourg.
However, Sanne also noted its sale of the firm’s investment in Colmore AG for net proceeds of £18.1 million at a value more than twice its original investment, with the company set to remain involved in the project under its new leadership.
The company added that its new business is set to push it towards a strong performance in 2022, with the combination of the firm’s newest acquisitions positioning the firm as one of the largest platforms in the sector.
The firm announced no final dividend for 2021 after its 14.7p per share dividend the previous year.
“Despite the material distractions arising from well-publicised offers for the Company during the year, 2021 has seen a strong financial performance from the Group, with impressive double-digit growth and maintenance of healthy profit margins and cash conversion,” said Sanne CEO Martin Schnaier.
“We have begun to see good returns from our investment over the last three years in our business development and product specialist teams, as well as benefitting from the continued market recovery in the alternative assets space.”
“As a result, we have successfully delivered net revenue growth of 19.0% and underlying operating profit growth of 21.0%, both at constant currency.”
“It is particularly pleasing to see this result given that the Group was the subject of takeover speculation and a formal offer period for the majority of the year.”
Care property investor and developer Assura announced on Friday that a development funding deal for a £31m cancer diagnostic and treatment centre in Guildford has reached financial close.
Genesis Cancer Care UK will operate and lease the building for the centre on a 30-year FRI lease with yearly, index-linked rent reviews.
Through a joint collaboration between GenesisCare and the Royal Surrey NHS Foundation Trust, the building, which is located next to the Royal Surrey County Hospital, will provide ‘cutting-edge’ oncology and cancer care services.
Two radiation treatment bunkers, one state-of-the-art MR-guided Linac and one conventional Linac, as well as diagnostic and a radiopharmacy facility for nuclear medicine imaging and treatment, will be located in the cancer centre.
The building is expected to receive a ‘Very Good’ BREEAM rating, with ‘Excellent’ for the energy element, and an EPC of A.
Assura has also launched an education and skills bursary package as part of its overall funding approach, and the centre will gain a new sensory garden from the building for patient and employee wellbeing.
Prime is developing the centre, which will be completed by Vinci Construction, with a practical deadline in Q4 2023.
Jonathan Murphy, CEO, said, “We are pleased to be working with Prime again to forward fund this scheme in Guildford.”
“This new, state-of-the-art facility will deliver services that ease the burden on the local NHS and help create additional capacity within existing NHS assets to address treatment backlogs.”
“This scheme is another step on our strategy to expand our offering, working with selected high-quality private providers who partner with the NHS as well as having a high sustainability and social impact.”
Assura shares gained 0.45% to 67p following the news in early morning trade on Friday.
The Financial Conduct Authority (FCA) released details of its redress scheme for victims of the British Steel Pension Scheme transfer misselling today.
A review by the FCA uncovered that 46% of recommended transfer advice provided to members of the British Steel Pension Scheme were unsuitable, with 41% declared suitable and 14% deemed unclear due to a “material information gap.”
The organisation is currently reviewing proposals for the best approach to carry out its redress scheme by next year.
The FCA said an estimated 1,400 pension scheme members will receive £71.2 million in compensation for the botched transfers, with redress scheduled to commence in early 2023 and the first payments distributed in late 2023.
The Work and Pensions select committee detailed the unscrupulous actions committed by the British Steel pension scheme’s financial advisors, and noted that members of the scheme were “exploited for cynical personal gain by dubious financial advisers in tandem with parasitical so-called ‘introducers'”.
The committee accused the FCA of stepping in too late to help members of the pension scheme and said the organisation should have been prepared to intervene when they initially received information about the poorly advised transfers in April 2017 but refused to take action until November 2017.
Analysts highlighted that the poor impact of the scandal will inevitably colour public opinion of the industry as a whole.
“While the vast majority of advisers in the UK provide a hugely valuable service to their clients, the few bad apples involved here have sadly tarnished the reputation of the entire sector,” said AJ Bell head of retirement policy Tom Selby.
“Aside from the direct impact on members who were badly advised, the scandal will also inevitably harm trust in retirement saving more generally.”
“Sadly, scandals such as Robert Maxwell at the Daily Mirror, Equitable Life and now British Steel tend to live long in the memory.”
Croda announced that the UK government is set to provide £15.9 million support its Lipid systems expansion on Thursday.
Croda is reportedly set to use the grant to expand its manufacturing facility in Staffordshire to significantly enhance its development of high-purity Lipid systems, which are used by the company to deliver nucleic acid drugs such as mRNA vaccines.
The financial injection will expand the available range of speciality Lipids developed at the site, and is set to add significant additional production capacity.
The ingredients group announced that it would be investing an additional £15.9 million in the expansion from the firm’s existing capital expenditure programme.
The move comes as part of Croda’s business evolution into a ‘Pure Play’ Consumer Care and Life Sciences group.
“The development of mRNA technology for use in vaccines and essential treatments has been one of the greatest scientific leaps forward since the start of the pandemic, and the potential for its use in future therapies – potentially treating cancer and heart disease – is remarkable,” said UK Business Secretary Kwasi Kwarteng.
“I am therefore extremely pleased to announce this support for Croda, a market leader in the manufacture of essential mRNA components, and the only manufacturer of Lipids currently operating in the UK.”
Croda Life Sciences President Daniele Piergentili added: “We are grateful to the UK Government for its support for this important project.”
“This investment will meaningfully enhance our Lipid system capability and manufacturing capacity, ensuring that Croda plays a central role in both the development and future supply of this important delivery technology.”
Croda shares were down 0.4% to 7,870p in late afternoon trading on Thursday following the company’s announcement.
Online ticketing platform Trainline shares gained 24% to 245p on Thursday afternoon after the company announced amendments to its third-party retail licence agreement.
Trainline and Rail Delivery Group (RDG) have reached an agreement on a memorandum of understanding (MOU) to alter its third-party retail licence as a result of RDG’s examination into rail retailing in the UK.
Trainline and other third-party sellers will now work with the RDG on new contractual licensing agreements in a cooperative manner. If new contractual terms cannot be mutually agreed upon, RDG has the power to establish a legally binding minimum set of business terms under the rules of the MOU.
Trainline’s commission rate would be reduced by 0.25%, according to the company, starting April 1, 2025, followed by basic terms which would apply to Trainline.
The base B2C online sales commission rate has been reduced by 0.5%, from 5% to 4.5% and the elimination of central industrial costs as a counterbalance which is estimated to be around 0.25% by Trainline.
AJ Bell investments director Russ Mould said, “There will be a sigh of relief in Trainline’s camp regarding the proposed changes to its commission rates. The rail industry is undergoing a lot of changes, and this includes reviewing the cut that third party ticket sellers get when they put bums on seats.”
“The rail sector has been through very difficult times during Covid, and it would have been easy to slash commission rates to the bone, leaving Trainline in a pickle.”
“Fortunately, the business should be able to cope with a half a percentage point decrease in the rate. Even better for its finances is the removal of central industry costs worth 0.25%. That explains why its share price has shot up more than 20% on the news.”
The company acquired the stake from Repsol, a Spanish-listed global energy firm.
Valdesolar accounts for about 3% of TRIG’s portfolio in terms of value. The acquisition, together with the company’s solar projects in Cadiz, will expand TRIG’s technological and geographic range.
Following the purchase, Spain officially accounts for 8% of the company’s portfolio, with solar PV accounting for 15%.
Valdesolar was developed and built by Repsol, which will continue to own a 51% stake in the project.
InfraRed Capital Partners currently operates as the investment manager whilst Renewable Energy Systems (RES) is the operations manager for the London-listed group.
TRIG will have ‘director representation and significant minority-investor protections’ with its involvement in Valdesolar.
Valdesolar is not supported by government subsidies, and TRIG is currently set to work with Repsol to manage the Project’s vulnerability to merchant energy prices by examining a selection of power price hedging techniques.
The investment manager maintains its cautious approach to incorporating energy price estimates into investment valuations, despite the current increased levels in the wholesale power market, which are not expected to last.
Richard Crawford of InfraRed Capital Partners said “We are very pleased to be partnering with Repsol on this large operating solar project. Projects such as Valdesolar offer a route to improved energy security and decarbonisation of the Spanish energy system.”
“Once the Cadiz solar projects are operational at the end of 2022, TRIG’s solar portfolio will have net generation capacity in excess of 500MW.”
OPEC+ announced its decision today to increase its monthly oil output by a modest amount in line with its previous agreement, boosting its production by an additional 430,000 barrels per day (bpd) from May 2022.
The coalition resisted calls to increase its output past its current level of 11.7 million bpd to make up for the lack of Russian oil supply since the state’s invasion of Ukraine on 24 February.
“The consensus on the outlook pointed to a well-balanced market,” OPEC said in a tweet. “Current volatility is not caused by fundamentals, but by ongoing geopolitical developments.”
“Saudi Arabia will be keen to avoid falling out with Russia by adding extra barrels at a time when Russian production is struggling,” said Callum Macpherson at Investec via Reuters.
The organisation also suspended its use of International Energy Agency data in favour of reports from consultancies Rystad Energy and Wood Mackenzie, following disagreements within the group over the IEA’s data.
UAE Energy Minister Suhail al-Mazrouei criticised the Agency for allegedly being unrealistic in its recommendations, following the IEA’s statement that no new oil and gas projects receive the green light past 2021.
In contrast, Rystad Energy’s stance argued that hundreds of new oilfields would soon be required to handle the level of fossil fuel demand.
The news follows President Biden’s announcement that the US is currently considering tapping into its 180 million barrel Strategic Petroleum Reserve in a bid to replace a level of the global oil supply lost over Russian sanctions.
The White House confirmed that President Biden will be making an official statement on his decision at 17:30 GMT tonight.
London’s small and mid cap markets traded slightly weaker on Thursday following the release of UK GDP figures and the prospect of the US releasing oil reserves hit energy prices.
Brewin Dolphin’s takeover by RBC made the wealth management company the FTSE 250 top riser with a gain of some 60%.
FTSE 250 Risers
Brewin Dolphin shares soared 61% to 512p as the Royal Bank of Canda agreed to buy the investment advice company for £1.6bn.
Rathbone Brothers gained 11% to 1,968p as a positive read across from the RBC acquistion of Brewin.
Trainline shares bounced back from its slump yesterday with gains of 21% to 240p as the travel ticketing company proposed changes to its commission rates.
“The rail industry is undergoing a lot of changes, and this includes reviewing the cut that third party ticket sellers get when they put bums on seats,” said Russ Mould, Investment Director, AJ Bell.
Provident Financial shares increased 2.6% to 325 as the company swung to profit in 2021. The company saw pre-tax profit of £4.1 compared to a loss of £113.5m, despite a 13% fall in revenue.
A decrease in impairment charges from £312m to £50m helped Provident return to profits in 2021. The company also proposed a 12p dividend for 2021 compared to nil in 2020.
HICL shares gained 0.3% to 177p announced the disposal of its entire interest in the Queen Alexandra Hospital PFI project to InfraRed European Infrastructure Income Fund for £108m.
Retail stocks take the hit as retail spending is at lowest of all time, with Frasers, Pets at Home, WHSmith, M&S, Moonpig and Currys down 2.9%, 1.9%, 0.7%, 0.6%, 0.18% and 0.16% respectively.
However, Vivo Energy and Dunelm Group shares increased 0.22% and 0.27% respectively.
AIM Risers
Mirriad Advertising shares flew 24% to 21.5p when the company announced launch of The Lost Audiences – Regaining Control which highlighted the growth avenue for brands and advertisers to expand their reach via in-content advertising and to engage audiences in an impactful and non-disruptive way.
Renalytix gained 24% to 335p as the company completed a $30m financing package.
AIM Fallers
Xeros Technology shares sank 31% to 61p as the company no longer expects to reach month-on-month EBITDA profitability and breakeven in the first quarter of 2023 due to China restarting lockdowns and India’s slow return to normal operations because of the third wave of the pandemic.
Diamond producer, BlueRock Diamonds fell nearly 30% to 37.5p when the firm raised £2.1m by placing 6m shares at a 35% discount to fund its upgraded mining plans and pay its contractors.
Aukett Swanke shares lost 20% to 1.55p after the company reported a 22% decerase to £8m from £11m in revenues excluding sub consultant costs due to uncertainty in decision making and inevitable delays because of the pandemic.
Business in continental Europe made a profit of £330k exclusding group management charges, however the UK and Middle East business made losses for Aukett.
Kore Potash shares plummeted 15% as the company continues to make losses in 2021, with a pre-tax loss of $2m as opposed to $1m in 2020.
The FTSE 100 was down 0.2% to 7,556 shortly after midday on Thursday after oil prices dropped below $110 per barrel.
The price of Brent Crude was down to $106 per barrel after the US announced a potential release of 180 million barrels of oil from its strategic reserve, in a bid to compensate for the loss of exports from Russia.
Yesterday, the FTSE 100 outperformed European indices helped by stronger commodities. However, the impact of stronger commodities diminished today and London’s leading index joined European shares that were broadly weaker.
“It has felt a bit like the FTSE 100 was singlehandedly being kept afloat by the big oil stocks, BP and Shell,” said AJ Bell investment director Russ Mould.
Shell shares were trading down by 1% to 20,897p and BP shares were down 2% to 374.9p following the developments.
China’s Covid-19 lockdown and Russia’s war in Ukraine are yet to upset the market in a major way, with analysts awaiting the results from crumbling peace talks between the embattled countries and the prospect of advanced lockdowns in China.
The OPEC meeting later today will also bring new developments for the oil market moving into the end of the week.
“Really this is tinkering at the margins. What might put more of a brake on prices is action by OPEC at its meeting later but the extent to which it could increase production, even if it wanted to, is open to question,” said Mould.
Intermediate Capital Group led the market risers with an increase of 2.9% to 18,232p after the company successfully raised €1.5 billion for its debt Infrastructure Fund, ICG Infrastructure Equity 1.
The group surpassed its initial €1 billion by €500 million as a result of “strong client demand.”
Pearson rose 2.3% to 756.8p as it recovered some ground following Apollo’s withdrawal of interest in the company after the educational services provider rejected its third and final takeover bid.
Halma PLC shares were up 1.8% to 25,340p.
Taylor Wimpey share were trending down 3.5% to 130.1p as Nationwide Building Society said house prices had skyrocketed at their fastest rate of growth in 17 years by £33,000.
Houses are projected to decrease in desirability as inflation spikes and rising energy costs eat into shrinking consumer wallets.
Next fell 3.1% to 60,790p in the retail sector’s decline in sales on the back of rising inflation and falling consumer spending in retail, reported at a 0.3% drop in February by the Office of National Statistics (ONS).
The Royal Mail Group dropped 3% to 335p as it continued its spiral downwards.
