Maitland/AMO Morning Monitor – Friday 21 January 2022
In the news
- The UK’s state pension payment system should be urgently reformed to avoid a repeat of a £1bn underpayment scandal, according to parliament’s spending watchdog.
- The Federal Reserve has for the first time launched a period of debate and public comment on the introduction of a central bank digital currency.
- The rules requiring lenders with over £25bn in deposits to separate their consumer operations from investment banking is reportedly set to stay, despite a review finding no evidence that banks had abused the ringfence.
- Unilever's management has been attacked by Fundsmith fund manager Terry Smith, who described the rebuffed £50bn billion bid for GlaxoSmithKline's consumer business as a "near-death experience".
- Chancellor Rishi Sunak has promised to help businesses through the cost-of-living crisis and the soaring cost of energy, with the launch of a scheme aimed at supporting small firms that want to boost their technology.
- The House of Commons sits from 9.30 a.m. with a day of private members’ bills, starting with Conservative MP Peter Gibson’s Taxis and Private Hire Vehicles (Safeguarding and Road Safety) Bill. This will be followed by Labour’s Fleur Anderson, who has an adjournment debate on the impact of unsafe cladding in her Putney constituency.
- The House of Lords is not sitting today.
Stock market moves
- In the US, the Nasdaq 100 and S&P 500 both closed down, at 1.3% and 1.1% respectively.
- In Asia, Japan’s Topix Index rose 0.5%, whilst Hong Kong’s Hang Seng Index was flat. China’s Shanghai Composite Index was trading down 0.9%.
- In Europe, the FTSE 100 opened down 0.8%.
Corporate announcements* Maitland Client
Close Brothers Group PLC* Scheduled Trading Update
- The group has performed well, with good loan book growth at strong margins in Banking and continued growth momentum in Close Brothers Asset Management.
- In Banking, the loan book increased 2.9% to £8.69bn (31 July 2021: £8.44bn).
- In Asset Management, CBAM has continued to deliver good growth in the period, achieving annualised net inflows of 8% (FY 2021: 7%) and benefiting from rising markets. Managed assets grew to £16.6bn (31 July 2021: £15.6bn) and total client assets increased to £18.0bn (31 July 2021: £17.0bn).
- As highlighted in the Q1 2022 trading update, Winterflood’s trading performance has moderated since the end of the 2021 financial year. As a result, operating profit in the period is broadly in line with the H1 2020 run rate (H1 2020 operating profit: £10.6m). There were no loss days in the period.
- Adrian Sainsbury, CEO, said: “We have seen good momentum in our business, as we continue to make the most of opportunities in our core markets. We are navigating the current environment effectively and remain confident that our proven and resilient model, supported by the hard work and expertise of our people, leave us well positioned to protect, grow and sustain our business over the long term.”
- Unaudited Group revenue for the 2021 financial year was approximately $787m, an increase of 41% compared to 2020.
- Profit before tax is expected to be towards the upper end of the range of analysts’ forecasts.
- The unaudited net cash balance at the 2021 year-end was $41.6m, (2020: $39.8m).
- The Board is very pleased with the Group’s progress in 2021 and is confident that the qualities embodied in the brand continue to resonate with our customers.
- The net asset value at 31 December 2021 was 107.18 pence per ordinary share.
- The Company was exposed to a diversified and partially inflation protected portfolio of 47 investments with an unaudited valuation of £1.1bn as at 31 December.
- The portfolio had a weight-adjusted average annualised yield of 7.9%, principal outstanding of £1.0bn and an average life of 11 years.
- During the period, the Company disposed of its investment in an offshore wind farm with proceeds representing a c.12% premium to carrying value.
- Hg, the Manager of HgCapital Trust plc (“HGT”), announced an additional investment into Lyniate, a leader in healthcare data interoperability.
- The terms of the transaction are not disclosed.
- The transaction will result in HGT investing approximately £8.1m in Lyniate, alongside other institutional clients of Hg.
- The transaction represents an uplift on HGT’s current investment in Lyniate of £7.5m (21%) or 1.7 pence per share over the carrying value of £35.4m in the Net Asset Value of HGT at 30 September 2021.
- Ninety One today confirms its assets under management at 31 December 2021 of £141.7bn
- This is an increase from AUM at 31 December 2020, which was £128.6bn and 30 September 2021, which was £140.0bn.
- Ninety One also announced it will publish its Q4 2022 AUM update on 14 April 2022.