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(Alliance News) - Equiniti Group on Monday said it has agreed to sell the EQi direct-to-consumer business of Equiniti Financial Services to interactive investor for GBP48.5 million.
Equiniti said the sale of the business to ii, already one of the largest share trading platforms in the UK, is expected be completed by the summer. It will receive GBP47.5 million in cash on completion and up to a further GBP1.0 million contingent on the timing of migrating customers onto the ii platform.
Equiniti said it will use the money to reduce debt, with interest costs expected to be reduce by GBP400,000 as a result. It will book a GBP13.0 million accounting profit on the deal and pay GBP2.1 million in corporation tax.
The EQi had assets under administration of GBP5.3 billion on December 31. In 2020, it recorded earnings before interest, tax, depreciation and amortisation of GBP3.3 million on GBP14.5 million in revenue.
"This marks another important milestone in the ii story, having brought together five established investment businesses within the last four years to create a single market-leading platform that offers the retail investor real choice and value," said ii Chief Executive Richard Wilson.
ii bought the Share Centre last year and in 2017 purchased TD Bank Group's UK direct investing business, creating the second largest online investment broker behind FTSE 100-listed Hargreaves Lansdown.
Equiniti shares were down 1.0% in early trade Monday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.4% at 6,654.63
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Hang Seng: down 1.9% at 28,544.40
Nikkei 225: closed down 0.4% at 28,743.25
DJIA: closed up 572.16 points, or 1.9%, at 31,496.30
S&P 500: closed up 73.47 points, or 2.0%, at 3,841.94
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EUR: down at USD1.1880 (USD1.1912)
GBP: unchanged at USD1.3815 (USD1.3813)
USD: up at JPY108.50 (JPY108.21)
GOLD: up at USD1,698.59 per ounce (USD1,697.43)
OIL (Brent): up at USD70.36 a barrel (USD68.74)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
1000 EST US monthly wholesale trade
1000 EST US employment trends index
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Japan's economy saw an unexpected improvement in January, according to the latest gauge by the Cabinet Office posted. The leading economic index improved to 99.1 points in January, from 97.7 points in December. According to consensus cited by FXStreet, a fall to 94.4 points was expected for January. The gauge consists of 12 individual indicators, including stock prices, consumer confidence and machinery orders. Separate data showed Japan's current account surplus tumbled monthly. Ministry of finance figures showed the surplus stood at JPY646.8 billion, about USD5.97 billion, down 45% monthly and 2.3% annually.
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BROKER RATING CHANGES
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MORGAN STANLEY RAISES SYNTHOMER TO 'OVERWEIGHT' (EQUAL-WEIGHT) - TARGET 546 (472) PENCE
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GOLDMAN SACHS RESUMES CAPITA GROUP WITH 'NEUTRAL' - TARGET 60 PENCE
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LIBERUM RAISES EQUINITI PRICE TARGET TO 170 (160) PENCE - 'BUY'
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COMPANIES - FTSE 100
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Education publisher Pearson maintained its dividend even as 2020 profit fell. Pearson's revenue for 2020 fell by 12% to GBP3.40 billion from GBP3.87 billion, though pretax profit rose to GBP354 million from GBP232 million. On the profit rise, Pearson said: "The increase is due to the gain on sale of our stake in Penguin Random House and lower restructuring costs which more than offset the impact of COVID-19 and portfolio changes on adjusted operating profit." Underlying revenue declined 10%, the education publisher said, with adjusted operating profit dropping 46% to GBP313 million from GBP581 million. The profit figure was broadly in line with consensus, which lay at GBP309 million. For the year ahead, Pearson expects revenue growth, with adjusted operating profit to be in line with current market expectations. Pearson proposed a stable final dividend of 13.5p to bring the full-year payout to 19.5p, also flat on 2019.
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Phoenix Group Holdings said its performance improved in 2020, and it expects further growth going forward. The London-based insurance services provider reported record cash generation of GBP1.7 billion for 2020, exceeding the upper end of its GBP1.5 billion to GBP1.6 billion target range, and ahead of the GBP707 million posted for 2019. The company proposed a final dividend of 24.1 pence per share, resulting in a 2020 full year dividend of 47.5p per share, up from 46.8p per share paid a year earlier.
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BT noted a Sky News article and said the suggestion that outgoing Chair Jan du Plessis impeded the transformation of the telecommunications firm is "without foundation". BT a week ago said du Plessis intends to retire as chair this year once a successor has been found. He joined as a non-executive director in June 2017 and was appointed chair in November 2017. Sky on Friday, citing people close to the company, reported that BT Chief Executive Philip Jansen indicated he was prepare to resign unless du Plessis was replaced by a chair who could accelerate change at the company. BT on Monday said du Plessis "demonstrated strong leadership of the company" throughout his tenure, as well as being "extremely supportive of management". "Any suggestion that he has impeded the transformation of BT is without foundation," said BT, adding that there has been no "misalignment" between the board and executive management over the company's strategy.
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COMPANIES - FTSE 250
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Micro Focus said it intends to appeal any patent litigation judgement in favour of Wapp Tech. In 2018, Wapp brought a claim against Micro Focus in the Eastern District of Texas, accusing the company of infringing claims of three patents in connection with the manufacture and sale of some products in the ADM product line, including LoadRunner and Performance Center. The jury on Friday delivered a verdict in favour of Wapp and awarded damages of USD172.5 million. The matter is awaiting the judge to hand down his judgement, Micro Focus noted, and the total damages awarded could increase. "Micro Focus has received comprehensive and clear advice from its external counsel that it has a very strong case to appeal both the infringement verdict and the amount of the damages. Accordingly, Micro Focus intends to appeal any judgement resulting from the verdict. Micro Focus continues to contend that there has been no infringement of any intellectual property and its advice from external counsel continues to support this," said Micro Focus.
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Direct Line Insurance edged up its final dividend and unveiled a GBP100 million share buyback. Gross written premiums fell just 0.7% to GBP3.18 billion, though pretax profit fell 11% to GBP451.4 million. The motor and home insurer noted increased major weather costs of GBP43.0 million, versus just GBP6.0 million in 2019, contributed to the lower profit result, as well as GBP39.4 million of restructuring and one-off costs as the group invested in cost saving initiatives. The combined operating ratio improved to 91.0% from 92.2%. With any result below 100% indicating underwriting profitability, the lower the better. Direct Line proposed a final dividend of 14.7p, up 2.1% on 14.4p in 2019, and announced a GBP100 million share buyback. "Turning to the year ahead, we feel confident that we can build on the momentum we've created and become a tech and data driven insurance company of the future with our customers at its heart," said Chief Executive Penny James.
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Domino's Pizza Group said it has agreed to sell its business in Sweden, PPS Foods, to a company controlled by Birgir Bieltvedt, the indirect owner of another Domino's franchiser, DP Norway. Domino's Pizza Group will pay the buyer EUR2 million in cash to take the loss-making business off its hands. Domino's Sweden, which has 14 stores, had an underlying operating loss of GBP4.0 million in 2019. The company said the disposal is part of its plan to focus on its core UK and Ireland operations and follows the sale of Domino's Norway last year.
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COMPANIES - OTHER
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Deliveroo has revealed that it has posted losses of GBP223.7 million, despite surging sales over the past year, as the takeaway delivery business announced plans for its stock market debut. The Amazon-backed company has disclosed its expected intention to list in a move expected to value the company at more than GBP7 billion. In a new filing, the company said it saw transactions rocket by 64% to GBP4.1 billion in 2020 as the pandemic helped to spark increased takeaway demand. The company also reported a surge in demand from restaurants seeking to use the platform, after sites were forced to close for dine-in customers for large parts of the year. It said that more than six million people order through the 115,000 restaurants, cafes and stores on its platform each month. Deliveroo revealed an underlying loss of GBP223.7 million for the year despite the jump in transactions, although this represented an improvement on its GBP317.3 million underlying loss in 2019.
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General Electric will combined its aircraft leasing unit, one of the few remaining assets in its lending division, with Ireland's AerCap Holdings, the Wall Street Journal reported. Citing people familiar with the matter, WSJ added that an announcement from GE may come as soon as Monday, assuming talks between the Boston-based firm and AerCap do not break down. WSJ reported that the deal could be worth over USD30 billion. AerCap is a Dublin-based aircraft leasing company which is listed in New York.
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A case concerning the alleged dealings of the Swiss bank UBS Group AG with tax evaders is due to be reopened before a Paris court of appeal on Monday. Two years ago, the bank was fined a record amount of more than EUR3.7 billion in France over these dealings. The bank appealed the judgement, saying it had always rejected accusations of criminal misconduct. According to the initial judgement, the bank helped wealthy Frenchmen hide billions from tax authorities in Swiss accounts.
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The chief executive of Davy Group stepped down on Saturday after Ireland's largest stockbroker was fined by the central bank over a bond deal in which a group of staff and executives took the opposite side of a client's trade, the Financial Times reported. Brian McKiernan, together with head of bonds Barry Nangle and non-executive director Kyran McLaughlin, resigned effective immediately, Davy said, "subsequent to the recent settlement agreement between Davy and the Central Bank of Ireland". Davy will be led on an interim basis by Deputy CEO Bernard Byrne, who joined from lender AIB Group PLC in 2018, the FT said. On Tuesday last week, the Central Bank of Ireland said it fined J&E Davy EUR4.1 million, citing four breaches of regulations that occurred between July 2014 and May 2016. In its announcement, the central bank said its investigation was prompted by a transaction that took place in November 2014. It was undertaken for the client by a group of 16 Davy employees, including senior executives, the central bank said.
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Starling Bank, an unlisted digital lender, will announce the biggest fundraising in its seven-year history on Monday, Sky News reported. Starling secured more than GBP270 million from investors, including from Qatar Investment Authority and Railpen - which manages the Railways Pension Scheme - according to Sky. The fundraise was done at a valuation of GBP1.1 billion, Sky said, citing City sources, confirming Starling's status as a British 'unicorn'. The London-based bank offers both personal and business bank accounts, accessed via its mobile app. It is 24% owned by Founder & Chief Executive Officer Anne Boden, employees and ex-employees and an employee benefits trust set up for employees, according to its website. Other investors include Merian Global Investors.
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Monday's Shareholder Meetings
IntegraFin Holdings PLC - AGM
Chamberlin PLC - GM
Chrysalis Investments Ltd - AGM, EGM seeking permission to issue shares
JLEN Environmental Assets Group Ltd - EGM re broadening investment policy
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By Tom Waite; thomaslwaite@alliancenews.com
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