Unlike in 2010, when it last set out its medium-term financial targets, this time around Prudential (PRU) can point to a 126 per cent rise in the stock price and £1.8bn in dividends paid out over the intervening period. However, the firms needs to provide greater clarity on what it expects in terms of returns outside of Asia. Yes, at the group level the promise of producing surplus cash of at least £10bn between 2014 and 2017 is credible. However, specific goals have only been set for its Asian businesses. Unfortunately, management's reputation has been built on setting and meeting cash targets for all its main operations. Furthermore, if 1bn pounds of the above amount comes from Asia then that would leave its US and European units producing no more cash than they do now. Hence, the group is left looking very reliant on Asia, the Financial Times' Lex column wrote (Last IC rating: Buy, 12 Aug).
Diversification, at least geographically, has its virtues. That seems to be the thinking at Centamin (CEY), whose only producing asset is a gold mine in Egypt. That is a rather unfriendly jurisdiction for Western companies, although the new authorities in Cairo promised this week to honour previous agreements. Hence Tuesday's decision to acquire Burkina Faso-focused Australian miner Ampella Mining for £22.7m in an all-shares deal. Like so many small gold outfits it has come under pressure recently. Of the outfit's 12 permits only one has been drilled but the tests are promising. Centamin will have to spend about £12.2m over the next couple of years to carry out further appraisals, but "the deal looks a sensible one, but nothing is assured," says The Times' Tempus. "Centamin shares […] have been a switchback ride over the past couple of years. There is no reason why that should not continue. A good punt, but be aware of the risks," Tempus added (Last IC rating: Hold, 28 Mar).
Business press headlines:
Democratic and Republican negotiators on Tuesday night agreed a deal to set spending levels until 2015, breaking the latest fiscal logjam in Congress and stopping a cycle of crisis-driven economic policy making in Washington. The agreement is small in size - worth 85bn dollars - but may herald the return of an era in which Congress can perform basic functions without the political brinkmanship that has repeatedly threatened the US economic recovery in recent years - Financial Times.
Royal Bank of Scotland (RBS) was facing fresh management upheaval on Tuesday night when the bailed-out bank's newly-appointed finance director suddenly quit. Nathan Bostock, who was only promoted to the top finance position on October 1st, is understood to have quit to become deputy chief executive of the UK arm of Spanish bank Santander. It is a bank he knows well, having left Santander in 2009 to join RBS after its £45bn taxpayer bailout - The Guardian.
Britain should press ahead with fracking, the chairman of the Government's climate change advisory body said yesterday. Lord Deben dismissed claims by green groups that fracking would cause significant damage to the environment, adding that Britain needed to drill shale wells to reduce reliance on foreign imports of fossil fuel - The Times.
An activist investor with a stake in FirstGroup (FGP) has called on the bus and rail operator to boost shareholder value by more than 50 per cent through a split from its US businesses. New York-based Sandell Asset Management, a hedge fund that was set up by Swedish billionaire investor Thomas Sandell, said it had written to FirstGroup's board proposing a spin-off and flotation of its US school buses and transit businesses, and a sale of Greyhound, its intercity bus provider - The Telegraph.
Tesco Bank is creating hundreds of jobs in Edinburgh and Glasgow as it steps up its challenge to the established high street giants. The company will hire 300 staff in the coming months, rising to 650 over two years, as it prepares to roll out a crucial current account offering in the middle of next year that will help it move towards becoming a full service bank - The Scotsman.
The Archbishop of Canterbury has summoned the bosses of the 'Big Six' energy companies to a private meeting on Wednesday to discuss fuel poverty and rising energy prices. The meeting comes after the Most Rev Justin Welby said he understood why people felt above-inflation price rises were "inexplicable" and called on the companies to act with "generosity" - The Telegraph.
