BUSINESS LIVE: Abrdn doubles share buyback as assets fall

Pawnbroker H&T’s profits rose by nearly a third on the back of record demand for lending, as cash-strapped Britons pledge valuables in exchange for short-term loans.

The company reported a 31 per cent rise in pre-tax profit to £8.8million in the first half, with its pledge book, which includes thousands of short-term loans linked to customers’ belongings, growing 14 per cent to £114.6million.

H&T told shareholders it anticipated continued strong demand for its pawnbroking services ‘as the impact of inflation on the consumer increases the need for small-sum, short-term loans’.

Shares in TI Fluid Systems, a company that makes parts for electric cars, jumped 16 per cent after it more than doubled its dividend as profits jumped.

Wealth manager Quilter is also one of today’s top risers, with shares up 13 per cent, after it said it expects profit to top market expectations, despite a rise in outflows.

Abrdn is today’s top faller, with shares down more than 9 per cent, after it reported growing outflows and lower assets under management.

Commodities giant Glencore follows, with shares down 4 per cent, after it said profits halved in the first half.

Intercontinental Hotels Group (IGH) boasted ‘very healthy’ demand in the first half after revenues were boosted by the reopening of the Chinese economy.

The Holiday Inn and Crowne Plaza owner’s global hotel room revenue (RevPAR), a key profitability measure in the industry, surged by 24 per cent year-on-year in the six months to the end of June, taking total group sales to more than $2.2billion (£1.7billion).

Zoom – the video calling company which became massive during the coronavirus pandemic when people were forced to work from home – has ordered its staff back to the office.

The company’s name became synonymous with households during the pandemic with families up and down the UK using it for quiz nights and to catch up with relatives.

Asset manager Abrdn has reported a drop in assets under management after high inflation and interest rates weighed on investor confidence in the first half.

AUM fell to £496billion in the six months to 30 June from £500billion at December-end, after Interactive Investor inflows of £1.9billion were offset by a 16 per cent jump in net outflows within its investment and adviser divisions to £4.4billion.

Analysts had forecast AUM growth over the six months to £507billion and the miss weighed on Abrdn’s share price.

The lack of sunshine last month did not stop Britons from splurging on a good day out, new data shows.

The hospitality and leisure industry received a boost in July as households spent more on getaways, concert tickets and eating and drinking out compared to a year ago, according to Barclays data.

Mark Crouch, analyst at eToro:

‘UK listed miners are all suffering at the moment due to the sharp fall in commodity prices over the past year.

‘Glencore is currently valued at less than half the FTSE 100 average, in price-to-earnings ratio terms, reflecting investor concerns over the effect sliding metal prices has had on its finances.

‘While the miner’s balance sheet remains incredibly strong, there has been a sharp deterioration in its revenue generation and profitability year-on-year, which is compounding those concerns.

‘The reason commodity prices have softened, of course, is down to a combination of the war in Ukraine, a struggling Chinese economy and concerns over recession in the West.

‘Given that none of those look like rectifying themselves any time soon, we may see miners continue to underperform.’

Building materials supplier SIG has warned that market conditions were expected to stay challenging in the second half of the year.

SIG has had to navigate tough market conditions since the onset of the pandemic and the Russia-Ukraine conflict adversely impacted energy and raw material costs.

Like most companies across sectors, SIG has resorted to passing on some costs to its customers as the company grapples with rocketing prices of essential raw materials.

SIG, which sells roofing and insulation materials in Britain and some other European countries, posted a 5 per cent rise in revenue for the first half of the year helped by price hikes.

‘Looking ahead, while we expect market conditions in the second half to remain difficult, we remain confident the business will… continue to improve its underlying operational performance,’ CEO Gavin Slark said in a statement.

UK fund managers have come under fire after it emerged many had cut back their holdings in major British defence stocks since Russia’s invasion of Ukraine last year.

Fund managers based in the UK have slashed their holdings in companies including BAE Systems and Qinetiq by an average of 9 per cent since the start of 2022, according to data from the London Stock Exchange Group.

London-listed stocks are trading lower this morning, with the FTSE 100 dragged by losses in Glencore after the miner psoted dour first-half earnings, while bleak China trade data has also hit the broader mining sector.

The industrial metals and mining sector is down nearly 2 per cent after data showed earlier in the day that top consumer China’s imports and exports fell much faster than expected in July amid weaker demand.

Abrdn has slipped 4.5 per cent to the bottom of the FTSE 100 after it reported a drop in its assets under management.

CEO of British valve maker Spirax-Sarco Engineering Nicholas Anderson willl retire early next year, after 10 years in the role.

The company, which provides thermal energy management and fluid technology solutions, named current finance chief, Nimesh Patel, as its next CEO.

Patel will take over the top position in mid-January.

Japan’s SoftBank Group reported a surprise loss of 477.6billion yen ($3.3billion) in the three months to the end of June, its third straight quarter of losses.

It was a far worse than the 75 billion yen profit forecast by analysts and compares with a net loss of 3.16 trillion yen in the same period a year earlier.

Shares in famed investor Warren Buffett’s conglomerate hit a record high as its insurance operations rebounded.

Berkshire Hathaway, which is based in Nebraska, rallied yesterday after the investment giant reported on Saturday that it had swung to a profit of £31.3billion between April and June – from a loss of £34billion in the same period the year before.

Trendy retailer AllSaints enjoyed record sales and profits thanks to shoppers brushing off the cost-of-living crisis to splash out on biker jackets and boots.

The company, which is owned by private equity giant Lion Capital, saw profits surge 50 per cent to £58.6million in the year to the end of January.

Customers have continued to buy its more expensive items, such as a trademark leather jacket which sells for around £319 and has been worn by celebrities including singer Nicole Scherzinger.

Holiday Inn-owner IHG has posted a 17 per cent rise in second-quarter global hotel room revenue, aided by higher room rates and a rebound in China.

IHG’s global revenue per available room (RevPAR), a key performance indicator for the industry, was also yo 9.9 per cent in the three months to 30 June when compared to 2019 levels.

Office rental firm IWG profits surged in the first half thanks to strong demand for flexible work products and higher prices.

Office landlords are slowly recovering from pandemic lows, as employers opt for permanent hybrid working model, where employees need to be in office for a stipulated number of days in a week or a month.

The London-listed owner of the Spaces and Regus brands said adjusted core profit from continuing operations for the six months ended 30 June jumped 48 per cent on a constant currency basis to £198million.

‘We continue to grow as expected, producing a record period for IWG with our highest ever revenue in our over 30-year history, up 14% from the first half of 2022. Importantly, we have achieved this alongside increasing EBITDA and cashflow generation, which is reducing net debt.

‘We have done this through a combination of higher demand for flexible work products, improved pricing and cost discipline and I am looking forward to continuing this momentum into the second half of 2023 and into 2024.

‘During the first half of the year, we have accelerated our capital light growth strategy allowing us to capitalise on the growing pipeline of property investors seeking to maximise their returns by partnering with IWG – in fact we have signed almost as many agreements in the first half of 2023 as we did in the whole of 2022.

‘We continue to be well placed to deliver further revenue, profitable growth and reducing leverage as more companies permanently embrace hybrid working as their preferred model with IWG set to be the biggest beneficiary.’

Rents must be slashed and investment poured into Oxford Street to save it from becoming a scourge of tacky sweet shops, industry leaders have warned.

It comes days after harrowing images revealed the shocking extent of the homelessness crisis gripping Oxford Street, with large numbers of people lying on makeshift mattresses.

While still considered Britain’s premier shopping destination, the shift to online shopping and the impact of the pandemic have left the street a shell of its former self.

Abrdn has doubled a planned share buyback programme to £300million, despite the fund manager’s assets under management falling by £4billion in the first half after market turmoil and economic uncertainty took its toll.

AUM fell to £496billion in the six months to 30 June, compared with £500billion at December-end.

‘We continued to move at pace to execute our strategy over the first six months of 2023 in a challenging macro environment.

‘Thanks to abrdn’s revenue diversification and the resilience we have built into our business with the acquisition of interactive investor last year, we grew revenue by 4% and adjusted operating profit by 10% over the period.

‘We are on track to deliver our £75m cost savings target in Investments as we continue our work to restore that business to a more acceptable level of profitability.’