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Press headlines & tips: Jupiter Fund Management, Experian, Bloomsbury Publishing

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January 17, 2013

Asset managers such as Jupiter Fund Management are not a bad proxy for investing in equities markets, if you believe the more optimistic projections for this year. Jupiter beat market forecasts for the amount of assets under management in the final quarter of last year as retail investors in Britain piled into its high-profile mutual funds. The amount invested in such funds grew by £917m to £20.6bn, more than half of this coming from new investment rather than an increase in their value as UK equities markets rose.

The fallout from the Retail Distribution Review is also favourable long-term as investors switch to branded products, even if the next few months could see most involved sitting on their hands until the long-term picture looks clearer. Jupiter is now cash-positive and analysts expect to see this reflected in chunky rises in dividends over the next couple of years. But the shares, after a strong performance since last spring, are on 14 times earnings, which suggests that the run has come to an end unless you take a very bullish view of UK equities, The Times' Tempus column says (Last IC rating: Buy, 1 Aug).

Information services company Experian yesterday revealed that revenue growth is slowing from the high levels seen previously, not least in Latin America, where the business in Brazil benefited from a one-off boost from changes in corporate taxation last time. Organic growth slackened from 9 per cent in the first quarter to 7 per cent in the third and will run at about that rate for the year. As well, Tempus points out, it has an inefficient balance sheet, thanks to its highly cash generative businesses, which has driven speculation of share buybacks, adding to the hefty multiple the shares enjoy. The shares, up 24p at £10.62, are back to their peak in October and trade on more than 20 times this year's earnings, which suggests that immediate progress could be limited, Tempus adds (Last IC rating: Hold, 9 Nov).

Bloomsbury Publishing's strategy involves increasing its output of academic and professional publishing, which tend to be higher-margin products and offer more e-commerce opportunities. As well, the company has been pursuing an expansion in other English-speaking countries, such as India, as well as growing its "online knowledge hubs." Furthermore, yesterday's trading update showed that the company is making progress on multiple fronts. However, there is some uncertainty over the current-year consensus, hence the 2014 earnings multiple of 8.9 is looking pretty fair. Having said that, any downside is protected by the attractive 5 per cent prospective yield. The Telegraph's Questor team therefore keeps a hold stance (Last IC rating: Buy, 25 Oct).

 

Business press headlines:

Europe, Japan and India on Thursday joined the United States in grounding their fleet of Boeing Dreamliner 787s, a day after a Japanese aircraft was forced to make an emergency landing. Japanese Transport Ministry Vice Minister Hiroshi Kajiyama said the grounding was for an indefinite period, and India's aviation regulator said it was unclear when the aircraft would be back in service. The emergency landing of Japan's All Nippon Airways (ANA) outside Tokyo on Wednesday was the sixth incident in the past 10 days to hit the Dreamliner, which Boeing has spent billions of dollars on and touted as the future of air travel, due to its radical new design, systems and materials. [The Telegraph]

Goldman Sachs risked stoking the row over City pay on Wednesday by revealing its bankers were paid an average of $400,000 (£250,000) each last year, a rise of more than $30,000 a head on 2011. Goldman's annual financial results show the bank has set aside $13bn to cover the salaries, bonuses and perks for the 32,400 it employs around the world. Details of the payroll come just a day after the bank was forced to back down from plans to defer bonuses until April so that its highly paid staff could avoid the 50 per cent tax rate. The size of the bill to pay staff is 6 per cent higher than a year ago. However, the average individual payouts to staff are higher as the number of employees has fallen by 3 per cent. [The Guardian]

Administrators have raised hopes that a "profitable core" of Blockbuster shops could be salvaged after dismal Christmas trading prompted the DVD rental chain to collapse under a mountain of debt. Blockbuster followed HMV and Jessops to become the third household name in a week to fail on Britain's high streets yesterday after sustaining losses of almost £1 million a month last year. The British business owes £23 million to its Colorado-based parent company in unpaid royalties for the use of the Blockbuster name and in loans to stock up for a Christmas rush that never arrived. Suppliers are owed a further £3 million. [The Times]

Gunmen believed to be Islamist militants kidnapped dozens of expatriate workers on Wednesday at a natural gas facility in south eastern Algeria jointly operated by BP and Statoil. The UK government confirmed on Thursday that one of the three people believed killed in the attack was British although William Hague, foreign secretary, said it was still unclear how many Britons were being held by the kidnappers as the stand-off with Algerian security forces at the In Amenas facility entered a second day.

Algerian officials said at least nine people were taken hostage but some local media reported that up to 41 foreigners had been seized. British, Japanese, French, US, Norwegian and Irish nationals were among the hostages, according to diplomats and media. With French ground forces moving into action in neighbouring Mali, there are fears that the hostage-taking is in retaliation for the intervention, aimed at pushing Islamist groups back from their advances on the south of the country. [Financial Times]

The architect of ring-fencing UK banks has welcomed MPs' proposals to electrify those fences. Sir John Vickers, who headed last year's Independent Commission on Banking, told the Parliamentary Commission on Banking Standards today that he believed electrification would make it more likely ring-fencing the retail parts of banks from their investment business would work. [The Independent]

Hopes that the UK economy might avoid a triple-dip recession have received a boost as a survey showed marketing spend grew at its fastest rate for over a year, despite the tough economy. The Institute of Practitioners in Advertising's quarterly bellwether survey said a net 1.1 per cent of companies increased spend in the last three months of 2012, the highest since the third quarter of 2011. The trade body found a majority of advertisers planned to increase budgets this year and ad spend should "steadily accelerate" by 2017. [The Independent]

National Australia Bank (NAB) could boost its market value by up to A$4.5 billion (£3bn) by spinning off its loss-making Clydesdale division as a separately-listed entity, analysts have claimed. The lender is under pressure to improve its shareholder returns and group chief executive Cameron Clyne is due to unveil a strategy in March aimed at reducing costs by encouraging more customers to bank online. Clyne has previously ruled out a "fire sale" of NAB's UK business in an effort to avoid shareholder losses, but has acknowledged that it will be some time before the division is able to generate "acceptable returns". [The Scotsman]