HSBC shares on the up as profits soar by a third but banking giant promises no let-up in cost-cutting drive. Shares in HSBC Holdings (HSBA) are on the up after the lender posted rising profits for the first quarter, after strong performances across its retail, wealth management and commercial banking arms. The FTSE-100 listed bank’s share price rose 2.62% or 17.15p to 685.20p on the news of its 31% quarterly pre-tax profit hike to $4.1billion, or £3.1billion. In order to meet its 2020 financial targets, the group said it continued to ‘proactively’ manage costs and investment levels, particularly when operating amid a ‘more uncertain economic outlook.’ The bank enjoyed a strong performance across Asia over the period, with revenue from the continent up 7%. Revenue grew ‘despite a softer rate and growth environment’ in Asia. HSBC generates around 80% of its profits from Asia and the continent remains central to its operations.
Owner of Trafford Centre and Lakeside warns that growing number of store closures will cost it dear as retail rout rolls on. The landlord behind the Manchester’s Trafford Centre and the Essex Lakeside is bracing itself for a ‘challenging’ rest of 2019, it warned today, as the troubles in the retail sector show no sign of abating. Intu Properties (INTU) cautioned that a ‘higher-than-expected’ number of store closures in 2019 will likely take a chunk out of its bottom line. There have been a flurry of so-called CVAs in the last couple of years, through which struggling retailers have been allowed to terminate leases early or negotiate lower rents with landlords. The growing popularity of this controversial insolvency mechanism is taking its toll on some landlords as the unexpected store closures can leave them out of pocket until a new tenant is found. Intu also flagged today a notable slowdown in lettings as some retailers delay plans to open new stores or expand amid ongoing Brexit uncertainty. In the last three months, Intu has secured 53 long-term leases, down from 60 in the same period last year.
Reckitt Benckiser facing legal action and a hefty fine over opioid addiction drug scandal. Reckitt Benckiser Group (RB.) admitted it could still face legal action over the Indivior (INDV) scandal and a fine ‘substantially higher’ than the £300million it has set aside. The consumer goods giant has been rocked by claims its former drugs business, spun off five years ago, made billions of pounds after fraudulently marketing an opioid addiction treatment. Current Reckitt chief Rakesh Kapoor, who is due to leave by the end of this year, and predecessor Bart Becht are both accused of making false claims, which they deny, about the safety of the treatment Suboxone. As it posted lacklustre first-quarter sales, Reckitt said it was still in discussions with US authorities over the matter.
Lloyds Banking Group (LLOY) boss Antonio Horta-Osorio faces questions from senior MPs over his pension arrangements amid an outcry at lucrative retirement deals. He sparked outrage after taking a £154,000 cut to his annual pension contributions to try to head off criticism, then offset this with a £175,000 increase in other elements of his pay. MPs Frank Field and Rachel Reeves, who respectively chair the pensions and business select committees in Parliament, have now written to Lloyds asking for an explanation. If it fails to give an adequate answer, Horta-Osorio could be hauled into the House of Commons. It came as Lloyds set aside another £100million to refund victims of PPI mis-selling, taking its total bill for the scandal to almost £20billion.
Hedge funds cashing in on Metro’s slide as shares hit a record low following dismal results. Metro Bank (MTRO) shares hit a record low following a dismal set of results, handing a multi-million-pound windfall to hedge fund boss Crispin Odey. The stock fell 16 after it revealed customers had pulled hundreds of millions of pounds out of their accounts in the first three months of 2019. Metro shares are down 84% since a peak in March last year, wiping £2.9billion off its value amid mounting fears over its future after an accounting error. The slump has led to a huge windfall for hedge fund bosses such as Odey, who have been betting on a fall in the bank’s value for more than a year. Overall, hedge funds have short-sold 11.8% of Metro shares, meaning they make money if the price drops.
Not many companies attribute healthy results to the speed of the wind, but it’s seriously important for Greencoat UK Wind (UKW), with stakes in 34 renewable energy projects. Yesterday it said it would be raising around £660million to buy new assets as it takes advantage of fresh opportunities. With debt of about £800million, or 34% of gross assets, issuing equity seems sensible. The stock will be priced at 133p, a 6% discount on Wednesday’s 142p close.
Swiss bank UBS is advising its clients to sell shares in Jupiter Fund Management (JUP) following the loss of a star investment manager, which it reckons could hit the business. Alexander Darwall is ceding management of the European and European Growth funds after 18 and 12 years respectively in charge. They are Jupiter’s second and fifth largest, with £7.7billion of assets under management. While the FTSE 250 group has poached Mark Nichols from Columbia Threadneedle to be portfolio manager of the funds, UBS expects the change to accelerate ‘outflows’.
Tate & Lyle (TATE) shares hit a fresh year-high of over 800p before plunging back amid takeover rumours – speculation that was swiftly rebutted by sources close to the sweeteners giant. The whisper is that it has had a 900p-a-share offer from a French privately owned group called Roquette Freres that would value it at just over £4billion. ‘This feels like a bit of a wild one,’ said the source.
Shares in Simply Be owner Brown (N.) Group (BWNG) shot up more than 20% despite racking up a £57.5million loss, compared with profits of £16.2million the previous year. The retailer, which also owns JD Williams, Jacamo and Figleaves, posted a 5.5% fall in sales to £647.2million in the 12 months to March 2, but an upbeat outlook sent shares up 22.3%, or 23.9p, to 131p.
Stagecoach Group (SGC) shed some light on why it thinks it was barred from bidding for three rail franchises, saying it was disqualified after refusing to take in excess of £1billion of pension liabilities.
