Company News

More Bad News for Banks and their Investors

If there are any private investors still invested in major UK listed banks, last week (w/e 30/1/2016) was yet another for disillusionment. In the Financial Times, Lex hit the nail on the head when he said "The one-offs keep on coming. If one did not know better, one might suspect them of being two-, three-, or more-offs". He was referring to Royal Bank of Scotland (RBS), but other banks likewise posted bad news during the week. Let's take them in turn: RBS ...

Home Retail Group Trading and Disposal

As a follow up to my blog post on the possible Sainsbury/Home Retail deal yesterday, here are some comments on the Home Retail Group trading statement issued this morning. Total sales at Argos increased 0.9%, but like-for-like sales were down 2.2% in the period as a result of reduced store footfall and growth in digital transactions. Homebase total sales were down 4% but like-for-like grew by 5% - this mix arises from an "aggressive store closure program". But the killer in their statement ...

More on Sainsbury (SBRY) and Home Retail Group (HOME)

Sainsbury published their Third Quarter Trading Statement this morning (13/1/2016) and they have also published a document arguing the merits of their possible bid for Home Retail Group under the title of "Accelerating our strategy for growth". Home Retail Group previously rejected an approach from Sainsbury on the basis that it undervalued the company. This note discusses the latest news as a follow up to my previous comments on this matter. Now I have previously declared an interest in this subject as ...

Sainsbury (SBRY) and Home Retail Group (HOME)

Sainsbury have announced today (5/1/2016) that they may be making an offer for Home Retail Group (the owners of Argos and Homebase) although their first approach in November was rejected. No doubt the publication of this information, and the advantages of such a merger, is intended to bring pressure on Home Retail to talk further. Now I have to declare an interest in this matter have recently purchased a few Sainsbury shares on the basis it looked the best value in a ...

Story Stocks and Purplebricks

Here is one New Year's resolution which investors might wish to adopt: avoid those "story" stocks! Paul Scott who writes a popular blog on small cap stocks for Stockopedia recently wrote "Above all, this year has taught me to stop chasing stories". He suggested it was a "virtually guaranteed way to lose money". He mentioned a few hyped up stocks that crashed back to earth in 2015 including Audioboom, Fitbug, Concha, Tungsten, Rightster and Torotrak. These are the kind of stocks that ...

The Audit of HBOS

One of the mysteries not adequately researched in the recently report into the demise of HBOS was the failure to examine the audits of the company that took place. The Financial Reporting Council (FRC) decided two years ago not to look into the audits of the bank by KPMG prior to its collapse and acquisition by Lloyds in 2008. But the Parliamentary Treasury Select Committee has now been looking into this further. Andrew Tyrie, the Committee Chairman, has already suggested the FRC ...

Lloyds Bank ECNs and the FCA

Investors in Lloyds Bank Enhanced Capital Notes (ECNs) lost the second round of their battle to stop Lloyds redeeming them at par in the Appeal Court. They previously won the case in a lower court, and are now planning to appeal to the Supreme Court. These ECNs are held by many retail investors, having been converted from PIBS issued by Halifax and the Cheltenham & Gloucester Building Society. Lloyds is apparently arguing that the wording of the conversion terms, on which basis ...

Globo Administrators Report – There’s No Money Left

The Administrators of Globo Plc have published their initial report into the affairs of the company. It makes for depressing reading. In essence one might sum it up in the phrase "There's no money left" which was the infamous wording of a note left by one UK Treasury Minister to his successor. In this case, even the secured creditors (Barclays Bank in the lead), are unlikely to get paid in full and all unsecured creditors and shareholders will get nil. The assets ...

New VCT Rules and Knowledge Intensive Businesses

I attended the Annual General Meeting of Northern Venture Trust (NVT) yesterday - one of the more successful VCTs. Management representative Tim Levett gave us a briefing on the impact of the new "draconian rules" (as he called them) for VCTs arising from EU regulations. His criticism also arose from the fact that the legislation is effectively retrospective as it impacts both "old money" from past fund raisings and new money. One particular oddity is that the amount of money than can ...

CentralNic Placing Annoys Private Investors

This morning (8/12/2015), CentralNic Group announced the acquisition of Australian company Instra Group. Total cost is AU$33 million payable in cash and shares which will be supported by a mixture of debt and the issuance of new shares in a placing. Overall the new shares to be issued to the sellers and to institutional investors will represent 31% of the new overall equity so there is substantial dilution of existing investors taking place. But what is likely to annoy private investors is ...

Rensburg AIM VCT Merger Agreed

Today (27/11/2015) shareholders in Rensburg AIM VCT (RSB) agreed to merge their company with Unicorn AIM VCT in a unanimous show of hands vote. They also agreed the tender offer which was associated with the deal and those shareholders who submitted tenders will be paid in full. Proxy votes were about 92% in favour on both resolutions. This is a definitive snub to Bill Nixon  of Maven who attempted to disrupt these plans on the basis that he could make a more ...

Alliance Trust Director Steps Down

It was announced this morning (27/11/2015) that Karin Forseke, Chair of Alliance Trust, will step down in January 2016. Gregor Stewart will take over as Chairman. Alliance Trust has been the focus of campaigns by Elliott Advisors and ShareSoc to get some changes made to this company so as to improve its performance (see https://www.sharesoc.org/alliance.html ) . Although the company has recently announced some changes, and has been furiously buying back shares – presumably in an attempt to close the discount to NAV, ...