Altice UK, an investment vehicle wholly owned by Israeli-French billionaire Patrick Drahi, has increased its stake in BT (BT.A) to 24.5 per cent of the telecoms group’s issued share capital. Drahi initially purchased a 12 per cent stake in the company in 2021, and upped it to 18 per cent later that year.
In a statement to the London Stock Exchange, Altice confirmed it had no plans to make a full offer for BT. Shares in the company are down more than 3 per cent over the past month, largely due to last week’s lacklustre set of results. However, they rose in early trading following Altice’s announcement. JJ
Hargreaves Lansdown ‘concerned’ over Lindsell Train’s risk management
Investment platform Hargreaves Lansdown has criticised asset manager Lindsell Train, arguing that its risk management and investment oversight processes are not as robust as they should be.
In a note published on its website, the platform’s head of investment analysis and research Emma Wall said there were “concerns around the capabilities and resources Lindsell Train has in place to provide effective challenge to investment teams”. Engaging with the firm did not result in satisfactory progress, she added.
Lindsell Train manages open-ended funds for UK equity, global equity, Japanese equity and North American equity, as well as investment trusts Finsbury Growth & Income Trust (FGT) and Lindsell Train Investment Trust (LTI).
Two of the firm’s funds used to be in a previous version of the platform’s shortlist of best buy funds, but have since been removed to avoid a potential conflict of interest, given that Lindsell Train owns a significant number of shares in Hargreaves Lansdown.
The manager pushed back against the criticism. A spokesperson for Lindsell Train described the firm’s approach to investment risk as a focus on avoiding losing permanent capital for investors, mitigated by investing in high-quality companies and monitoring other aspects of risks such as portfolio concentration and liquidity. VC
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Pennon shares down on watchdog probe
Water sector regulator Ofwat has announced an investigation into Pennon Group (PNN), the owner of South West Water, over leakage incidents reported in its annual results. England’s water companies are under increasing scrutiny as public anger over the so-called sewage scandal grows. During periods of heavy rainfall, water firms are allowed to use overflow valves to prevent sewage from spilling into homes and businesses. But these valves are only meant to be used in exceptional circumstances – not the hundreds of times a day that environment agency data shows they are.
In a statement, Pennon said it would “work openly and constructively with Ofwat” throughout the investigation. Its shares were down 3 per cent in early trading. The country’s other listed water companies, United Utilities (UU.) and Severn Trent (SVT), also saw their share prices dip as the market opened. JJ
Industrial slowdown hits RS Group
Shares in distributor RS Group (RS1) fell by a further 3 per cent in early trading on Wednesday despite delivering what UBS analysts described as “solid profits” in the 12 months to 31 March.
The company delivered an adjusted operating profit of £402mn, which was 4 per cent higher than consensus estimates and 26 per cent above the prior-year figure. Revenue also grew by 17 per cent to £2.98bn, helped in part by a 5 per cent currency tailwind.
However, markets were less impressed with the outlook, with the company stating that trading in the first seven weeks of the new financial year had been slower, reflecting a slowdown in industrial growth and “aggressive competition” in electronics. Although the company said it was “comfortable” with the current consensus forecasts, the markdown in its shares means they have fallen by 8 per cent since the start of the year. MF
AEW appointed as Home Reit investment adviser
AEW has been appointed investment adviser of the suspended Home Reit (HOME) as the crisis-stricken homeless accommodation landlord attempts to recover its collapsed rent roll and confirmed a fire-sale of its assets. AEW, the parent of UK-based real estate investment trust AEW UK (AEWU), will take over from Alvarium, which oversaw Home’s controversial business model of offering long leases to inexperienced and interconnected homeless accommodation providers from the beginning. Home praised AEW for its “expertise both in property, including managing residential for rent, and in managing listed funds”.
Home also confirmed that its valuer Knight Frank had given it six months’ notice. Valuation was at the centre of the short-selling argument which preceded Home’s share price collapse. ML
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Assura and Big Yellow: rent up, valuation down
Real estate investment trusts (Reits) Assura (AGR) and Big Yellow (BYG) both recorded hefty valuation hits, thanks to last year’s interest rate hike, but an uptick in net rent in their results for the year to 31 March. GP surgeries developer Assura swung to a £119mn loss thanks to a bruising £215mn devaluation of its assets, but net rental income rose by 9 per cent as it upped rents and grew its portfolio.
Meanwhile, self-storage landlord and operator Big Yellow saw its pre-tax profit crater by 89 per cent thanks to a valuation hit, but net rent per sq ft was up 9 per cent thanks to continued demand for storage space. ML
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Victorian Plumbing’s pre-tax profit surges
Victorian Plumbing (VIC) reported a doubling of first-half pre-tax profits, although the online bathroom product retailer still operates off a low margin. While profit before tax jumped to £5.6mn from £2.7mn, this was generated from £147mn in sales. The company pointed to a marginal improvement in its gross margin, which increased by two percentage points to 46 per cent, although it acknowledged that costs had increased across the board – particularly property and people costs, which rose by 61 per cent and 18 per cent, respectively. ML
