Track records are important; hence, investors may want to carefully consider the investment thesis behind Quindell (QPP). The firm specialises in handling motor and household claims for insurers and now works in some way, shape or form, with the majority of the top ten insurers. Judged solely on its numbers, the company is certainly impressive. On Monday it reported pre-tax profits for the year ended on December 31st of £107m for an increase of 202 per cent on the back of a 133 per cent surge in sales. The AIM-listed company now has a market capitalisation of over £2.25bn after also acquiring more than 20 companies in the two and a half years since its debut on the market.
However, chief Rob Terry has done this before. He transformed The Innovation Group (TIG) into a business with revenues of £1bn a year. That venture ended in tears towards the end of the dot-com bubble despite its much vaunted revolutionary technology. Quindell has raised its guidance on new business to £2bn a year in three years’ time. Despite the shares doubling in price since January they may still be worth a look if you believe Terry won’t put in a repeat performance, The Times' Tempus wrote.
SkyePharma’s (SKP) time may have arrived. After having spent the better part of the decade trying to convince everyone of the merits of their asthma treatment Flutiform markets seem to have finally stood up and listened. The drug combines ingredients from successful AstraZeneca (AZN) and GlaxoSmithKline (GSK) drugs. In response, the company’s shares have leapt five-fold in the intervening twelve months as the company launched its product in Japan as well as in 15 European countries.
The latter market alone, from which it obtains a 10 per cent royalty, may be worth £250m. Nonetheless, the company may be hampered by the reputation of its founder for flamboyancy and for "over-promising and under-delivering". He was forced out in 2006. Even so, it has a full and promising range of products. At yesterday’s closing price the stock looks attractive, Tempus says.
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Engineering group Weir (WEIR) could be on the verge of a blockbuster £8.5bn merger with Finnish rival Metso. Like its Scottish rival it manufactures industrial pumps and valves for the global oil and gas mining markets. It is thought that Weir could be prepared to pay as much as 30 euros per share for the company, giving it a market value of over €4bn (£3.3bn). Market sources say Metso is the kind of firm which Weir would regularly be keeping an eye on as a matter of course but that they have been talking a merger for some time, The Times reports.
Ahead of its results next week analysts at broker Bernstein have published new analysis showing that Marks & Spencer (MKS) continues to haemorrhage market share quicker than any of its rivals. The company’s slice of the market dropped to 11.18 per cent in the six months ended on February 16th in comparison to year-ago levels. Particularly worrying was the loss of popularity with its core 25-55 age group and over-55s. On a more positive note, it made some gains among 12- to 34-year-olds, The Guardian says.
The Public Accounts Committee has issued a damning report into the government’s handling of its £1.2bn rural broadband plan, arguing that it failed to deliver sufficient competition in those parts of the country where subsidies were needed to justify upgrading the copper network to fibre-optic cables. That allowed BT to exploit its monopoly position. To back its case up the regulator references the company’s lack of transparency on costs and BT’s insistence on non-disclosure agreements, The Times writes.
It is usually poor advice to take decisions in a hurry. Yet that is exactly what the National Audit Office has accused Westminster of doing with the flotation of the 500-year old Royal Mail, in the process costing taxpayers £750m in a single day. In a scathing report the watchdog says the business secretary ploughed ahead with the sale despite reiterated warnings from City experts that the firm was being sold on the cheap, according to The Guardian.
Eight banks, Barclays (BARC) and Royal Bank of Scotland (RBS) amongst them, have become embroiled in a formal investigation by the Swiss regulator (Weko) for the alleged rigging of the $5.8trn-a-day currency markets by the Swiss competition authorities. In parallel, Deutsche Bank placed its London-based director of institutional foreign exchange sales – Kai Lew – on leave. The other institutions which have come under the regulator’s scrutiny are Credit Suisse, UBS, Zürcher Kantonalbank and Julius Baer, according to The Times.
The International Monetary Fund, the Washington-based multilateral lender, warned that Britain’s largest banks are still ‘too big to fail’ while they continue to receive billions in implicit subsidies from taxpayers. Simply put, the Bank of England is still a long way off from being able to allow a bank to fail and not having to rely on another taxpayer bail-out. Overnight, however, Governor Carney said global regulators are aiming to eliminate one of the two remaining barriers to that, The Daily Mail writes.
