International Distribution Services (IDS), Peel Hunt (PEEL), Rightmove (RMV), Financials Acquisition Corp (FNWR), British Land (BLND) and Jadestone Energy (JSE)
The communications regulator Ofcom has fined Royal Mail £5.6mn for failing to meet its delivery targets, in a further blow to parent company International Distributions Services (IDS).
Under Ofcom rules, Royal Mail is required to deliver 93 per cent of first class mail within one working day and 98.5 per cent of second class mail within three working days. However, in 2022-2023, only 73.7 per cent of first class mail and 90.7 per cent of second class mail arrived on time.
“Clearly, the pandemic had a significant impact on Royal Mail’s operations in previous years,” said Ian Strawhorne, Ofcom’s director of enforcement. “But we warned the company it could no longer use that as an excuse, and it just hasn’t got things back on track since.”
IDS said last year was “uniquely challenging” for Royal Mail due to 18 days of strike action. In the 12 months to March 2023, Royal Mail reported an operating loss of over £1bn and is expected to remain loss-making this year. IDS is due to publish its interim results on Thursday. JS
Read more: Royal Mail: is it time to be optimistic?
Peel Hunt pitches British-only Isa allowances
Investment bank Peel Hunt (PEEL) is understandably worried about the UK equity market – its earnings are directly linked to floats, raises and deals taking place. In the second of two pieces of research on reinvigorating the London Stock Exchange, analyst Charles Hall has outlined a plan to push more investor cash into local companies.
The first note, from the end of October, called for tax cuts on UK-focused investments. Hall now says applying the £20,000 tax-free investment allowance through a ‘British Isa’, or BRISA, would “reverse the long-standing withdrawal of funds from the UK market and turbocharge the UK public markets”. This could either add £10,000 to the Isa allowance specifically for local investments, Hall said. Even more radically the existing stocks and shares Isas could be converted to the BRISA, he said.
Office for National Statistics data cited by Hall does show that 38 per cent of all Isa holdings by value are in cash, so there is some dry powder in this sector. Of the stocks and shares equity holdings, the equal-largest allocations are UK Allcap and global equities, at 28 per cent apiece. AH
Finsac cancels LIU Lloyd’s market funding bid
The attractions of the Lloyd’s insurance market seem to be relative after the long-trailed combination between special acquisitions vehicle Financials Acquisition Corp (FNWR) and London Innovations Underwriters (LIU) was cancelled after the issue failed to attract enough interest to raise the minimum amount required. The company cited turbulence in the credit markets for the failure to gather enough funds. Finsac will now wind itself down as a cash shell and return cash to shareholders. LIU said it will keep its options open. JH
Jadestone Energy’s Malaysia project delivers well(s)
Some positive news for Jadestone Energy (JSE) shareholders – the company has had success with its infill drilling campaign in Malaysia, meaning it has narrowed guidance for the full year to the top of the production range of 12,600 – 13,700 barrels of oil equivalent per day (boepd). The company has drilled four wells in recent months and the three that are established are running at almost double the gross expected production rate of 3,500boepd.
Jadestone’s share price has remained weak even after it brought the Montara asset back online. Year-to-date it is down 62 per cent. Broker Peel Hunt has kept its 2023 forecasts although said it was a “strong update”. Its EPS forecast for the year is -18.5¢, compared to 4.4¢ last year. AH
