The managers behind the Scottish Mortgage Investment Trust (SMT) have chopped back their position in gene sequencing specialist Illumina (US:ILMN), latest annual results show.
Investment manager Tom Slater said the team had “substantially reduced” the position in one of their former top 10 holdings. Illumina has been mired in controversy over attempts to complete its acquisition of cancer-screening outfit Grail in the face of regulatory opposition.
The SMT team has otherwise stuck to its approach in the face of some brutal share price falls for the trust’s tech and healthcare holdings.
However Scottish Mortgage deputy manager Lawrence Burns hinted changes could be made if needed. “Should the company experience material, prolonged and disadvantageous impact stemming from this or any other facet of our investment policy we would naturally seek to sound out the views of our shareholders to understand their perspective,” he said. DB
Read more: It could be time to buy back into Scottish Mortgage
British Land hit by revaluation charge
Shares in British Land (BLND) pulled back after the property group swung to a reported loss for its March full year. Rising capital costs and a negative outlook on economic prospects fed through to a 12.3 per cent drop in the value of the group’s property portfolio year-on-year. The contraction was even more pronounced in the City of London, where the group owns a sizeable chunk of the office space in the Broadgate Centre. The negative valuation amounted to £1.37bn, including a charge of £567mn linked to joint ventures. So, the group duly swung to a reported loss, although it should be noted that underlying profit, which omits property valuation swings, increased by 6.9 per cent to £264mn, underpinned by a like-for-like net rental growth of 6 per cent. MR
Read more: British Land reports 12.3 per cent portfolio fall
Margins down at Mitchells and Butlers
Restaurant and pub operator Mitchells & Butlers’ (MAB) operating margin fell by 270 basis points to 7.7 per cent in the 28 weeks to 8 April as the non-repeat of prior-year government support and elevated cost inflation in the supply chain took their toll. But the company said that the cost outlook was now improving, and the full-year “cost headwind” would come in at the lower end of its guidance range.
Sales rose by 11 per cent in the period to £1.28bn, year-on-year, while cost pressures dragged down pre-tax profits by 30 per cent to £40mn. The shares were down by more than 2 per cent in early trading. CA
Read more: Mitchells and Butlers' margins still constricted
Outlook weighs on Experian’s shares
Experian (EXPN) posted an 8 per cent increase in revenue for the year to March of $6.59bn as all of its geographic regions reported growth. The credit data specialist also said adjusted earnings came in “at the top end” of expectations, growing by 9 per cent to $1.8bn. Reported pre-tax profit came in 19 per cent lower, however, as it wrote down the value of its EMEA arm by $179mn, citing “macroeconomic weakness in our European markets”. Basic earnings per share fell by 34 per cent.
Experian’s shares fell by 5 per cent in early trading as the company forecast growth would moderate to between 4-6 per cent this year, accompanied by a “modest” margin increase. MF
Read more: Bank fears weigh on Experian shares and FTSE 350 Review: Business services braced for slowdown
Keller digs deep for a better year
Groundworks contractor Keller (KLR) reported a “better than expected” start to the year, with its Suncoast business in the US continuing to perform well, despite the anticipated slowdown in residential markets. Its Asia, Middle East and Africa region, meanwhile, is in talks about a second works package at Saudi Arabia’s NEOM and it has made management changes at Austral – the Australian business unit at which a financial reporting fraud was uncovered in January.
Alongside recent contract wins, such as a $145mn deal to do the groundworks for a new electric vehicle plant in South Carolina, the company said it expects a full-year performance that is “at least” in line with expectations. House broker Liberum left its forecast unchanged but said “upside pressure is building”, with a second NEOM order potentially three-times the size of its initial £40mn deal. MF
Burford talks of caseload “turning point”
Litigation funder Burford Capital (BUR) has said its portfolio is at a “turning point” as more court cases near completion. Cash receipts are up 17 per cent year-on-year at $328mn, but the group reported an operating cash outflow of $466mn, as it ploughs more money into new lawsuits. JS
Read more: Burford portfolio at “turning point”
