UK Mutual Firms Need to Prepare For Worsening -2-

Camellia on Thursday reported a swing to pretax loss for 2022 on the back of increased distribution costs and adverse trading conditions and said that performance for 2023 so far has been mixed.

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Landore Resources Chairman, CEO to Step Down

Landore Resources said Thursday that its chairman and chief executive officer intend to step down.

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Sutton Harbour Raises GBP2.9 Mln in Direct Subscription; 2H Met Management Views

Sutton Harbour said Thursday that it has raised around 2.9 million pounds ($3.6 million) in a direct subscription and that business in the second half of the year has met management views.

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Forward Partners 2022 Portfolio Fair Value Fell Amid Turbulent Macroeconomic Conditions

Forward Partners Group said Thursday that its portfolio fair value fell in 2022 as it faced significant headwinds, driven mainly by turbulent macroeconomic conditions.

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Let's Explore 2022 Pretax Loss Widened; to Return $12.5 Mln via Tender Offer

Let's Explore Group said Thursday that its 2022 pretax loss widened after booking higher costs, and that it would return around 12.5 million pounds ($15.7 million) to shareholders via a tender offer.

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Circle Property Shares Fall After Sale of Asset to Portman Finance Group

Shares in Circle Property fell on Thursday after the company said has completed the sale of its final remaining asset to Portman Finance Group for 2.85 million ($3.6 million).

MARKET TALK:

Vodafone Set to Agree GBP15 Bln Combination With Three UK This Month

1104 GMT - Vodafone and CK Hutchison's Three UK are reportedly likely to agree to a GBP15 billion combination this month, valuing the equity of the combined group at GBP9 billion with GBP6 billion of debt, Interactive Investor head of investment Victoria Scholar says in a note. "Talks are understood to have been ongoing for around a year as Vodafone looks to save costs amid weakness in one of its key markets, Germany, pressure on its share price and the sluggish macroeconomic backdrop," she says. Margherita Della Valle's appointment as CEO potentially paves the way for the deal, but the merger could face regulatory hurdles amid competition concerns leading to increased tariff prices and reduced consumer choice, she says. ([e-mail])

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Hargreaves Lansdown's Beat on 3Q Revenue, Assets Under Administration Boosts Shares

1051 GMT - Hargreaves Lansdown's revenue and assets under administration for the third quarter beat consensus, sending shares 2.4% higher to 810.6 pence, and to the top of London's blue-chip index's gainers in morning trade. Jefferies points to the net new client mix, which favors the higher revenue margin part of the business, noting that this is a good outcome for the retail-investment platform. "The only flies in the ointment [are] slightly weaker asset retention (perhaps unsurprising given inflation) and the growing portion of [net interest income] in the revenue mix, which some parts of the market view as lower quality than fee income," analysts say in a note. Shares rose as much as 4.7% earlier in the session. ([e-mail])

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Virgin Money UK's Better 1H Points to 2H Stability

1043 GMT - Virgin Money UK's first-half print and capital position points to stability in the second half of the year, UBS says in a note after the financial-services company raised 2023 net interest margins guidance and said costs are expected to be heavier. Rough extrapolation of guidance implies GBP20 million added to income and GBP20 million to costs at a 51.5% cost/income ratio, with slightly higher loan losses and potentially a substantially larger buyback, analysts Jason Napier and Sanjena Dadawala say. "Getting that picture to 'stick' into 2024 requires conviction around NII stability...and stability of costs in 2H guided in the slides and the ongoing benefits to costs of restructuring in 2H23," they say. ([e-mail])

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Rathbones New Business Generation Lags Rivals

1038 GMT - Shares in Rathbones Group drop 1.4% after the investment manager reported higher first-quarter total funds under management and administration, but lower underlying net operating income and investment management fees. The issue for Rathbones remains its relatively poor rate of new business generation, Panmure Gordon says. "Discretionary and managed net inflows of GBP0.3 billion in the quarter represent an annualized growth rate of 2.6%, half the rate reported by, for example, Evelyn Partners," Panmure analyst Rae Maile writes. "By contrast revenues were better than expected, mainly due to commission income and interest income, areas which may not attract the highest rating from the market. Therein lies the rub; others in the sector are growing faster, growing organically and are cheaper." ([e-mail])

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Virgin Money UK's Higher Cost Guidance Overshadows Lifted Margins Forecast

1038 GMT - Financial-services company Virgin Money UK shares are under pressure as investors focus on the company's heavier cost forecasts, says Goodbody in a note. Virgin said it expects higher net interest margins in 2023 but guided for a higher cost income ratio and cost of risk. The implied downgrades "will overshadow the higher revenue guidance and we also expect that there will be some disappointment with the lower net loans print (VMUK stock has been punished for this in the past)," says analyst John Cronin. Goodbody rates the stock buy. Shares in the FTSE 250 company trade 5.8% lower at 144.20 pence. ([e-mail])

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Next's 1Q Performance Improved, But Backdrop Likely to Deteriorate

1029 GMT - Next reported 1Q sales ahead of expectations, but the trading environment has likely softened into FY 2024, Citi analysts say in a note. The clothing retailer's 1Q full-price sales were -0.7%, compared with company guidance of -2% and Citi's estimate of -3%, they say. However, the company has cut 2Q guidance to -5% from -4%, the U.S. bank's analysts say. "With a macro view that the demand environment will deteriorate across 2023 and into 2024, we see little reason to own the shares," they say. Citi has a sell rating on the stock and a target price of 5,400 pence. ([e-mail])

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Liontrust's Offer for GAM Seen With More Risks Than Upside

1020 GMT - Liontrust Asset Management's offer for GAM Holding increases uncertainty and more risks than upside are seen at first sight, says Peel Hunt in a note as it places the stock under review after the U.K. asset manager said it had agreed on an offer for its Swiss peer which values GAM at CHF107 million. "This deal is large and in our view set to dominate the Liontrust investment narrative for some time," say analysts. They note GAM is heavily loss-making and likely to reduce Liontrust's profitability in the first year, with medium-term margins also seen negatively impacted while execution risks are great. Liontrust shares in London fall 5.8% while GAM's in Zurich are down more than 25%. ([e-mail])

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Hiscox 1Q Shows It Is Retaining More in a Hard Market

1014 GMT - Hiscox is retaining more in a hard market, Peel Hunt says in a note after the specialty insurer posted an increase in gross premiums over the first quarter and higher rates across its divisions. "Our outlook remains positive as Hiscox is achieving rate adequacy across nearly all classes," analysts Andreas Van Embden and Mark Williamson say, adding that at their current valuation, shares aren't cheap, but they see attractive returns compounding net asset value growth as the underwriting cycle hardens. Peel has an add rating on the stock with a target price at 1,330 pence. ([e-mail])

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UK Mortgage Lending Likely to Remain Weak in Coming Months

1005 GMT - The collapse of Silicon Valley Bank triggered a withdrawal of funds in March from the overall U.K. banking system, though not enough to constitute a bank run, Ashley Webb, U.K. economist at Capital Economics, says in a note. Bank deposits fell by GBP18.1 billion in March, while mortgage lending to individuals fell from a net flow of GBP0.7 billion in February to net zero in March. Higher interest rates remained a drag on lending in March, particularly on the housing market, and with rates likely to stay high for all of this year, mortgage lending will probably remain weak as bank lending slows further in the coming months, Webb says. ([e-mail])

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Endeavour Mining Shares Look Ripe for Sale

1004 GMT - Endeavour Mining looks like a safe pair of hands, but now seems to be a good time to cash shares in, Liberum analysts say in a research note. The mining company's shares have had a good run on the back of high gold prices, but gold is set to fall from later this year and material catalysts are lacking, they say. Liberum lowers its rating on the stock to sell from hold, and has a target price of 1,247 pence. Shares trade up 1.2% at 2,106.00 pence. ([e-mail])

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Hiscox's Lack of Mention of Notable Catastrophe Losses Reassures

0955 GMT - Hiscox's lack of mention of any notable catastrophe losses reassures around underwriting capabilities in its London Market and reinsurance and insurance-linked strategy (Re & ILS) divisions, says Citi in a note after the Bermuda-based specialist insurer posted its first-quarter update. This suggest the company remains on track to deliver a combined ratio of 83%-84% in LM and 75%-79% in Re & ILS, with some upside risk given the rating environment, says analyst Punit Rajesh Pandya. On the results, the brokerage sees "the positive surprise as being growth in the LM book, as Re & ILS growth and rate increases come in-line with expectations and the Retail growth continues to underwhelm," he adds. Hiscox shares slip 1.1% at 1,161 pence. ([e-mail])

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AIB Group's Early Guidance Hike Gets Warm Welcome

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05-04-23 0825ET