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Financial Conduct Authority (FCA), UK retail sales, Amcomri (AMCO), Savannah Energy (SAVE) and Headlam (HEAD)
The Financial Conduct Authority (FCA) has launched a consultation on proposed new rules for retail investment products, including investment trusts.
Investment trusts currently do not have to follow existing rules on how to disclose their costs, following an industry campaign argued that EU-inherited regulations forced trusts to double count their costs and made them look unduly expensive.
But the proposed new rules, which will also apply to investment trusts, do not reflect what the industry has been campaigning for.
Richard Stone, chief executive of the Association of Investment Companies (AIC), said that although “there are aspects to be welcomed”, the consultation “misses the chance for more radical reform”.
“It would also mean a continuation of the market distortion we saw under the old regime – creating disincentives for fund managers to purchase investment companies that offer exposure to renewable energy, infrastructure and other private assets – even when they think they provide good value,” he added.
The dispute has led to a handful of investment trusts, including Pershing Square (PSH), being restricted to new investment on Hargreaves Lansdown, as we reported earlier this week. The FCA consultation closes on 20 March 2025. VC
Novo Nordisk plunges on drug data
Shares in Danish drugmaker Novo Nordisk (DK:NOVO.B) initially fell by more than 25 per cent late this morning after the company reported disappointing results from a trial of its latest obesity drug. Novo said patients using CagriSema lost an average of 22.7 per cent of their body weight, below the 25 per cent it had targeted. By midday shares had recovered slightly to trade 17 per cent lower.
The weight-loss drug has been billed by the company, which said less than two thirds of patients in the trial received the highest possible dose, as its next generation product.
While the trial suggests CagriSema is more effective than Novo Nordisk's flagship Wegovy drug, the figures imply the injectable is not far ahead of Mounjaro, the existing weight-loss product offered by rival Eli Lilly (US:LLY). Lilly shares were 4 per cent higher in pre-market trading. DJ
Christmas shopping rush starts slowly
Retail sales “stagnated” in November, with a 0.2 per cent increase in volumes coming in below economists’ consensus forecast of 0.5 per cent, according to the British Retail Consortium.
Rising energy bills and weak consumer sentiment have hit spending, and a mild spell hit demand for winter clothing. There was also evidence of consumers holding out for the later Black Friday period (some of which fell into December) to bag discounts on beauty and electricals goods.
The last two months of the year make up a fifth of annual retail sales and with November being weak “retailers will hope shoppers come out in force in the final days before Christmas”, the BRC’s director of insight Kris Hamer said. MF
Hilco execs float engineering group
An engineering group run by two executives from distressed debt specialist Hilco Capital has floated on AIM, raising a net £10mn from investors.
Amcomri (AMCO) was co-founded by Hilco’s executive chair Paul McGowan and its lead industrial partner, Hugh Whitcomb, who will serve as Amcomri’s deputy chair and chief executive, respectively. It plans to buy businesses from owner-managers who want to retire but have no obvious successor. The group already has 12 operating businesses employing 359 people which last year made an adjusted cash profit of £5.8mn on revenue of £47.1mn.
McGowan and his family were the majority holders prior to the float, but Hilco also held an 18.8 per cent stake, which was reduced to 13.1 per cent on admission.
Thus far, only around a quarter of the shares are publicly traded but with the company planning to do at least two to three deals a year a float provides “a solid platform for our operations”, McGowan said.
The shares were trading at 57.4p, a 4 per cent increase on their debut price of 55p. MF
Savannah Energy suspension goes on and on
When should a listed company cease to be considered publicly traded? Savannah Energy (SAVE) has now passed two years of its shares being suspended, because of a South Sudan deal considered a reverse takeover. The original agreement with Petronas announced in December 2022 fell apart in August, but Savannah has been working on an alternative deal.
In an update on Friday, the company said it had “signed an agreement with another energy company to discuss collaboration in relation to the potential alternative transaction”. Another update is expected in February. This is not a new situation for Savannah shareholders – another suspension lasted six months in 2021. But maintaining the situation because another deal might happen is just bizarre. AH
Headlam sells off properties at a premium
Floorcoverings distributor Headlam (HEAD) announced the sale of four properties for £54mn – a 64 per cent premium to their book value.
Three of the properties at Ipswich, Gildersome and Leeds were sold to the same buyer (a fund owned by Blackstone) for £50.9mn. Headlam will lease two of these back but its Ipswich operations have been transferred to a new distribution centre in Rayleigh.
The fourth site, at Uddingston, was also surplus to requirement and was sold outright.
Chief executive Chris Payne said the cash generated would be reinvested back into the business.
House broker Peel Hunt said the deal would eliminate net debt, which it had expected to be around £49mn at year end, but would make little difference to profits as lower interest payments would be offset by higher lease costs.
Headlam’s shares jumped by 9 per cent. MF
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