Amlin Increases Stake in Leadenhall Capital Partners

Insurer Amlin (AML.L) has confirmed today that its previously announced deal to lift its stake in Leadenhall Capital Partners has been completed.

Amlin will now own 75% of LCP the joint venture it setup in 2008, up from 40%. The deal will be done via a part aquisition of individual partners stakes.

Amlin ‘s chief executive Charles Philips commenting said “I am pleased that we have further strengthened our relationship with Leadenhall Capital Partner. As alternative capital plays a greater role in (re)insurance markets, I expect Amlin’s increased interest in LCP to be a valuable strategic advantage to both businesses,”

Amlin (AML.L) is trading slightly higher this morning, up 2.2p (0.5%) at 445.30p.

A Bad Day for Tesco as drop in sales, fallout from profit overstatement and Rating Downgrades Hit Share Price

Tesco (TSCO.L) the under pressure UK supermarket today revealed its interim results which included a confirmed figure of £263M for its overstated profit, news of which has pressured the supermarket recently.

However interim results also revealed a drop in like for like sales of 4.6% for which the company blamed strong competition in the industry and headwinds for price cuts. Providing more evidence of the pressure Tesco faces from other supermarkets and the new trend of budget supermarkets like Aldi.

Sir Richard Broadbent, Chairman Commented:

“The issues that have come to light over recent weeks are a matter of profound regret. We have acted quickly to clarify the financial performance of the company. A new management team is in place to address the root causes of the mis-statement and to develop and implement the actions that will build the company’s future. I am confident that the new Chief Executive and Chief Financial Officer will move rapidly and effectively in this respect.

Once this transition is complete and business plans are in place, it will mark the beginning of a new phase for the company and I will begin now to prepare the ground to ensure an orderly process for my own succession at that time. My decision reflects the important principle of accountability on behalf of the Board and will support the company to draw a line under the past as it enters the next phase of its development.”

Dave Lewis, Chief Executive Commented:

“Our business is operating in challenging times.  Trading conditions are tough and our underlying profitability is under pressure. We do however face these challenges from a position of market strength and I have been heartened by the team’s welcome and their determination to stay focused on doing the very best for our customers.  Whilst my review of the whole business continues, three immediate priorities are clear: to recover our competitiveness in the UK, to protect and strengthen our balance sheet and to begin the long journey back to building trust and transparency into our business and brand.”

To add further the misery ratings agencies Moodys and Fitch both downgraded the companies credit rating. Moodys from Baa2 to Baa3 and Fitch from BBB to BBB-. both cited concerns over the profit mis statement and the impact of competitiveness in the supermarket sectors.

Moodys Commenting said “We have downgraded Tesco‘s ratings because of the materially reduced trading profit for the first half of fiscal 2015 that is affected by the rapid structural changes in the UK retail grocery market as well as the ongoing uncertainties related to the investigation by the FCA into Tesco’s accounting irregularities,”

Fitch Said  ”The downgrade reflects Tesco’s continued loss of competitiveness in its core UK operations, with profitabilityfurther impacted by the accounting adjustments associated with the group’s recognition of commercial income, Fitch expects further pressures on volumes and pricing, coupled with the significant operational leverage inherent in the business, leading to a structural reset of margins in the UK business.”

Tesco (TSCO.L) spent much of the day in the red and eventually ended the day down 6.56% at 171p


Playtech, Best ever Q3 Performance. Confident of Beating full Year Forecasts

Playtech (PTEC.L), the online gaming and gambling software supplier today announced a strong performance in Q3 coupled with a revised forecast as strong performance carries on into Q4.

The firm was boosted by world cup sports betting and casino and total revenue for the Q3 period was £116.5M, up 28.6% on the same period last year. A best ever quarterly performance for the company.

Also announced was strong performance carried into Q4, average daily revenue for the first 21 days of Q4/14 is up over 22% on Q4/13, marginally above the level reported so far this year, and up over 2% on Q3/14.

Mor Weizer, Playtech‘s Chief Executive Officer, commented: “The strong growth seen through the first half continued through the third quarter resulting in the strongest-ever quarterly performance, driven by our flagship casino, including mobile and Live, sport betting, land-based revenue and services.

During the quarter we launched innovative live casino offerings for both Skybet and RAY, along with a powerful web and mobile sport offering for the newly launched GazzaBet website for RCS Media in Italy. This represents the first phase of a full turnkey solution, and we expect to launch casino and mobile casino in due course.

We started to deliver on our turnkey strategy with three licensees moving their UK-facing activity to the Playtech white label structure, strengthening our position as a key provider and demonstrating the financial and operational benefits that can be achieved by using our turnkey offering.

Looking ahead, the management team is confident of exceeding current market expectations for the full year.”

Watchdog Says HSBC broke small Business Banking Rules

UK Bank HSBC (HSBA.L) along with Irish First Trust Bank have both been found to have broken small business banking rules by forcing businesses that take out a loan with them to also open a business current account with the bank as a condition of the loan, this is a practice known as ‘bundling’. The practice was outlawed in 2002 and eight UK banks entered into a legally binding agreement following a competition commission investigation.

CMA (The competitions & marketing Authority) became aware of possible breaches of the rules and ordered an audit of regulation adherence at the eight banks. It was found as a result of this audit that two banks HSBC and First Trust had indicated to some small businesses that a current account was a condition of loan.

The CMA also stated that it had found evidence at two other banks of low awareness amongst staff of the rules to follow and has requested another audit at all eight banks which will report next year,

CMA chief executive Alex Chisholm stated, “Breaches of these undertakings is a serious matter and we have directed FTB and HSBC on the actions they must take to immediately correct the situation.”

HSBC (HSBA.L) in a statement said: “HSBC takes its responsibility to UK business seriously and we regret that the bank has not been fully compliant with ‘bundling’ undertakings. Since the issue was discovered, we have been working with the CMA to implement a plan ensuring full compliance with the requirements, and will be regularly reporting back to the CMA. As part of our audit review, where we find a customer has received the wrong information, we will take action to ensure they have the right information going forward.”

Shares in HSBC are up 6p in trading this morning at 632.4p


RSA Plans Sale of Italian Business

Insurer RSA Insurance Group (RSA.L) has agreed plans to sell its Italian arms of businesses Royal Sun Alliance and Sun Insurance to ITAS Mutua.

RSA will pass on insurance liabilities of £434m with their associated assets and receive a further goodwill payment of £19m. The transaction is structured as the transfer of the entire business of each branch. RSA expects to recognise a gain on sale of £28m and an addition to the Group’s tangible net assets of approximately £8m. The positive impact of the transaction on RSA’s Group IGD surplus is approximately £50m.

Completion is anticipated during the second half of 2015, subject to obtaining regulatory approval.

Stephen Hester, RSA Group Chief Executive said:

“This transaction continues the excellent momentum of our announced disposals in 2014 and represents further progress in tightening the strategic focus of the Group.”

RSA Italy underwrites both personal and commercial insurance risks and accounted for £221m of net written premiums and a £1m underwriting loss in RSA Group’s 2013 financial statements.  At 31 December 2013, technical provisions were £434m.

Jimmy Choo Begins Trading at 140p, progress Flat This morning

Luxury Shoe maker Jimmy Choo (CHOO.L) today started trading on Londons Main Markets. As expected the opening price was set at 140p per share which valued the company at just over £545.5Million.

The company had originally tried to set its IPO in the range 140p-180p but that was cut this week after fears the firm may struggle in such weak market conditions and there were even fears that with big falls in the ftse recently the floatation may be abandoned altogether, however the share price seems to have held up at least for the moment.

Pierre Denis, Chief Executive Officer of Jimmy Choo, said:

“We are delighted with our successful IPO. Today’s announcement marks an important milestone for Jimmy Choo and recognises not only the appeal of our high quality products but also confidence in our ability to outperform the luxury shoe market. We welcome our new shareholders and look forward to sharing with them the continuing momentum of this exceptional brand.”


Credit Suisse Sees Turnaround hopes fading for M&S, Cuts target price

Credit Suisse today cut its target price for M&S (MKS.L) by a huge 15% citing concerns over recovery at the failing high street chain. The bank says it sees “few signs of a recovery” and posted a new target price of 360p down from 450p. At present it sees the only thing supporting the share is the 5% dividend yield.

M&S (MKS.L) will be reporting interim results shortly though these are predicted to follow the now common theme of good performance in food sector supporting weakness in its clothing lines. Pre tax profit for the interim period is predicted to fall again for the fourth straight year, current analyst guidance is £255M, down from £262M in the previous period.

Commenting sources at the bank said “The combination of slower UK sales growth in September, continued weakness in demand in many of M&S‘ overseas markets, and the strength of sterling has led us to cut another 2% from our forecasts. Earnings momentum has been negative for four years and with second-half expectations already quite demanding, we see little in either the external environment or self-help agenda to suggest that this is about to change.”



BWin.Party Q3 Revenue Rises Boosted by World Cup

Bookmakers and gaming giant Bwin.Party (BPTY.L) announced a slight rise of 2% in revenue for the third quarter, the company enjoyed a boost in sports betting over the world cup period.

Revenue for sports betting was up 11% over the period as punters placed more bets on the World Cup and despite a later start to the Euro football session and the loss of revenue due to Greece SP blocking. The rise did however offset a decline in poker (25%), bingo (1%)  and  casino (3%) revenue.

The company states that it is still confident it is on track to deliver of full year expectations and that Q4 should see the release of new products including the new mobile betting app with the addition of embedded casino games.

Norbert Teufelberger Chief Executive of Bwin.Party commenting said ”Our overall revenue performance in the third quarter was in-line with our expectations whilst clean earnings before interest, tax, depreciation and amortisation (EBITDA) margins have benefited from our previously announced cost savings. We continue to make good progress on expanding our mobile footprint and our presence in nationally regulated and/or taxed markets and we remain confident about the full year outlook.”

Shares in Bwin.Party (BPTY.L) were trading up on the day around 86.50p (up 5%) near the close of play.


Jimmy Choo expected to start trading at 140p

Jimmy Choo’s IPO is expected to set its stock market price at 140p when trading begins this Friday on Londons Main Market. This is at the lower end of its expected price range.

The luxury shoe retailer had expected to be able to make a market valuation of £702Million but has fallen short of this and is expected to be valued at around £546Million when trading starts.

The company has been relying heavily on China in the past to keep growth up however with reports that luxury spending in the country is down 1% this year there are fears that this may weigh on the company along with projected debt levels as Jimmy Choo continues to open stores at a faster rate than the industry average.

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Booker on course to meet Full Year Targets

Booker (BOK.L), the food wholesaler today announced a £67.4M pre tax profit for the first half an increase of £2.3M from the same period last year.

Profit after tax rose to £55.3M, up 3% and underlying earnings per share was up 16% at 3.17p.

The company declared an interim dividend of 0.52p per share, up 16%.

Despite continuing “challenging” market conditions and a competitive UK marketplace, Booker says it is on course to deliver on full year expectations by continuing to deliver on its commitments to customers on price, choice and service.

Commenting on the results, Charles Wilson, Chief Executive of Booker, said: ”We have had a good half and our plan to Focus, Drive and Broaden the business remains on track.  Despite the challenges in the UK grocery market we continue to provide our retail, catering and small business customers with improved choice, prices and service via the internet, delivery and cash and carry.”

Booker share price is trading slightly up at 118p