Company News

BP – Pay Cut or Downward Discretion

I seem to be spending a lot of time talking about pay at companies of late. It would be better if we could concentrate on more important matters, like their strategy, the lack of productivity in UK companies, how they are revising their plans to cope with Brexit and exchange rate changes, and all those other matters that affect shareholder returns. But it seems everyone wants to talk about pay. So here's the latest story. The BP Annual Report has been published ...

Perverse LTIPs and Alliance Trust (ATST)

Imagination Technologies – And Why You Should Avoid Such Companies

Imagination Technologies Group (IMG) announced yesterday that Apple, it's largest customer, had notified it that they plan to stop using IMG's technology in future products. Apple represents more than 50% of IMG's revenue and the share price promptly fell by 62%. IMG provides Graphic Processing Units (GPUs) to Apple who have apparently been developing alternative solutions, possibly with the assistance of former IMG employees. IMG suggested that Apple would likely be infringing its patents or other intellectual property so that suggests that ...

A Divorce Invoked and a Marriage Cancelled

Spring may be in the air but love is definitely not. As expected, Mrs May has issued a letter to the EU invoking Article 50. So the Brexit process is now commenced and we may be out in a couple of years. The UK stock market has of course discounted this already although there is some uncertainty about what the future impact will be. It depends a lot on the trade deal that can be negotiated. The other big item of news ...

Tesco Investor Compensation and Booker Opposition

Tesco (TSCO) have agreed a Deferred Prosecution Agreement with the Serious Fraud Office (SFO) over the overstatement of profits which came to light in 2014. Tesco has also conceded to a finding of market abuse by the Financial Conduct Authority (FCA) in relation to a trading statement issued in August 2014. As a result the company has agreed to establish a compensation scheme for purchasers of Tesco's ordinary shares or bonds between the 29th August 2014 and 19th September 2014 (inclusive). ...

Pay Revolts and Rolls-Royce Voting Recommendations

According to a number of press reports we seem to be heading into the AGM season with another year of pay revolts. There are also rumours that Mrs May is to proceed with introducing annual pay votes. Chris Cummings, CEO of the Investment Association, writing for the Guardian said "Too many people still feel they are not sharing this country's prosperity. Companies can either act responsibly now and shape a more responsible 21st-century corporate Britain or they can carry on as before ...

Fundsmith Annual Shareholders’ Meeting – An ODD investment strategy

The Annual Shareholder Meeting for holders of the Fundsmith Equity Fund was held last night (20/3/2017). Here’s a brief summary of manager Terry Smith’s presentation and the question/answer session...

Share issues – And An Interesting Rule

Spring is in the air, and companies are clearly in a mood to raise cash. A lot of these have been share placings but the reasons given have been...

Employee Directors at Sports Direct

It seems that controversial company Sports Direct (SPD) are likely to become the first UK public company to have a worker on their board. They plan to appoint an elected "Worker's Representative" who will attend and speak at board meetings although they would not formally be appointed as a director. A spokesman for Sports Direct said: "Having explored all options we believe this is the best way to ensure the Workers' Representative is free to champion the interests of all staff. ...

NCC Group – Rob Cotton Departing

In a previous blog post I commented that bearing in mind past events, I doubted that many investors would continue to believe that the long-standing CEO Rob Cotton should continue to lead the company. It would appear the directors agree with me because this morning (1/3/2017) it was announced he was stepping down with immediate effect. Brian Tenner, CFO, will take over as interim CEO and will lead the previously announced strategic review. The share price rose slightly in early trading on ...

Alliance Trust Vote – A Victory for Private Investors and ShareSoc

Today Alliance Trust shareholders voted to support the Board’s proposals to change the investment management arrangements and to buy out Elliot. This is surely a major win for private...

The Future Value of Money

The future value of money was a question highlighted by a Government decision yesterday. The discount rate to be applied to awards to road accident victims and others, to ensure they always have enough to support their future needs, is to be changed to -0.75% (that's minus 0.75%). Previously, and for many years, it has been assumed that they could invest a cash lump sum at a rate of plus 2.5%. That was on the assumption that they could invest in ...