Proactive Investors -
- Blue chips flat at 7,932
- B&Q owner's profits tumble
- Scottish Mortgage's private investments scrutinised
The morning so far
Kingfisher’s shares slid 2% in opening exchanges after the B&Q owner posted a rapid decline in full-year revenues and profits and tempered its outlook for the year ahead.
Kingfisher (LON:KGF) said to expect repairs, maintenance and renovation on existing homes to provide resilience, but remains “cautious on overall market outlook given lag between housing demand and home improvement demand”.
Shares could have slipped more, but as Richard Hunter at interactive investor stated: “Some of the sting was taken out of these numbers after two previous profit downgrades, but the results are nonetheless light of many reasons to be cheerful.”
Elsewhere in company news, Elliott Investment Management’s intentions on Scottish Mortgage Investment Trust PLC (LON:SMT) became clearer over the weekend.
The activist investor recently built a 5% stake in the FTSE 100 firm. According to a Sunday Times report, it now wants more clarity on the valuation of Scottish Mortgage’s private investments, including SpaceX.
SMT shares fell 0.9% in opening trades.
There is little action on the macroeconomic front today, save for some new home sale data from the US this afternoon.
At the time of writing the FTSE 100 was essentially flat at 7,932 after hitting a 12-month high on Friday.
Bitcoin off after Sunday surge
Bitcoin surged against the US dollar on Sunday, but has failed to sustain any momentum this morning, dipping around 0.3%.
The world’s largest cryptocurrency has come off from all-time highs of nearly $74,000 in the middle of March to trade below $67,000 at the time of writing.
A bout of profit taking and some notable outflows from bitcoin ETFs are two of the main culprits.
Despite the near-term losses, year-to-date performance is still strong, with the BTC/USD pair remaining more than 58% in the green.
Activist wants clarity on Scottish Mortgage’s private investments
Elliott Investment Management’s intentions on Scottish Mortgage Investment Trust became clearer over the weekend after the activist investor recently built a 5% stake in the FTSE 100 firm.
According to a Sunday Times report citing a “source familiar with the matter”, Elliott wants Scottish mortgage to ramp up share buyback to close the stock’s discount, while exiting some private investments including SpaceX
Sources said Elliott is concerned about the lack of transparency in Scottish Mortgage’s private investments, which have increased in proportion to listed stocks, which may be contributing to the lagging share price.
Alongside SpaceX, Scottish Mortgage’s unlisted investments include TikTok parent ByteDance, US fintech firm Stripe and Swedish EV battery developer and manufacturer Northvolt.
Nabeel Bhanji, a partner at Elliott, said: “We are grateful for the dialogue we have had with the board and management of Scottish Mortgage in recent months. We strongly support the company’s recently announced £1 billion buyback — the largest buyback programme ever announced by a UK closed-end fund — and look forward to continuing our engagement.”
Scottish Mortgage stocks were unbudged on the news this morning, opening flat at 875p.
The FTSE 100 opened a few points higher at 7,935.
Wise snaps up Delivery Hero’s chief finance officer
Fintech disruptor Wise PLC (LON:WISEa) has appointed Delivery Hero (ETR:DHER)’s Emmanuel Thomassin as its chief financial officer.
Thomassin will join the Wise in October, replacing Matthew Briers in the role.
He currently serves as Delivery Hero’s CFO, having held the role for a decade since shortly after the firm was founded in 2011.
“Emmanuel has a proven track record of scaling companies in rapidly evolving industries - from startups to public companies,” said Wise chairman David Wells.
“I look forward to working with him as Wise continues on its path to reshape global financial services for the 21st century.”
The move comes as Wise seeks to expand its global footprint.
B&Q’s Kingfisher earnings slashed by a quarter
Kingfisher PLC, the parent company of home improvement retailers B&Q and Screwfix, faced a challenging trading environment in the last financial year, with revenues and earnings hit by stagnant retail spending.
Year-over-year, total sales decreased by 1.8% with like-for-like (LFL) sales down by 3.1%.
Statutory pre-tax profit fell by 22.3% to £475 million (or down by 25% to £568 million on an adjusted basis), though the group was able to keep its yearly dividend stable at 12.4% with a £300 million share buyback programme also announced.
For the year ahead, adjusted pre-tax profit is expected to be between £490 million and £550 million, with free cash flow projected in the range of £350 million to £410 million.
“Despite all the macroeconomic and consumer challenges in our markets over the past year, we have stayed focused on our customers and our long-term strategy," said chief executive Thierry Garnier.