Scottish Mortgage (SMT), Vodafone (VOD), Redrow (RDW), Barratt Developments (BDEV), AG Barr (BAG), Bodycote (BOY), Air Astana (AIRA) and Kazatomprom (KAP)
Future trends fund Scottish Mortgage (SMT) will make at least £1bn available for buybacks over two years as the board pledges "concerted action" to deal with the trust's wide share price discount.
The board said Scottish Mortgage's portfolio companies had adapted to a world of higher interest rates, and had more than doubled their free cash flow over the past year. "Against this backdrop and having further strengthened the company's balance sheet, the board now intends to take more concerted action to address the discount to net asset value at which the company's shares continue to trade," it said. The shares are on a discount of around 15 per cent.
The buybacks, which amount to around 9 per cent of the trust's market capitalisaton, have met mixed reactions, with some analysts arguing they could boost sentiment but others asking if capital should be used for investments. DB
Read more: Scottish Mortgage's Tom Slater on performance woes, AI and China
Vodafone cuts divi after €8bn Italy sale
Slimming down conglomerates such as Vodafone (VOD) is meant to improve the lot of shareholders. But the telco, after signing a binding agreement to sell its Italian business to Swisscom for €8bn (£6.8bn), has also announced a 50 per cent dividend cut in the next financial year. “Following the right-sizing of the portfolio as a result of the [Italy] transaction and the sale of Vodafone Spain, the board has determined to adopt a new rebased dividend from FY25 onwards,” Vodafone said. This will result in a 4.5¢ total dividend next year, down from 9¢ in the 2024 financial year. It added: “the new dividend has been set at a sustainable level, which ensures appropriate cash flow cover and sufficient flexibility to invest in the business for growth.”
This is not a total let down for investors, however. Between the Italian and Spanish proceeds, €4bn will be used for stock buybacks. The Spanish portion is confirmed while the telco said it “anticipates the opportunity” to put €2bn from the Italian sale into repurchases. Vodafone shares were up 4.5 per cent on the news. AH
AG Barr plans job cuts
AG Barr (BAG) announced yesterday afternoon that it could cut around 200 jobs as part of a business reorganisation. The Irn-Bru maker is going to consult on moving the delivery of its core soft drinks from a direct to store model to “an enlarged and enhanced field sales operation with brands directly supplied through existing wholesale channels”. It is also looking at fully integrating the Boost Drinks business, which it acquired in 2022, into the soft drinks unit which it said would prevent duplicated work. CA
Pilot pay holds back Air Astana
Air Astana (AIRA) reported a 14 per cent slide in pre-tax profit to $87.1mn (£68.3mn) despite revenue climbing by 14 per cent to $1.17bn. Operating expenses rose by 17.5 per cent, with employee and crew costs increasing by 30 per cent due to higher pilot salaries. Chief executive Peter Foster said the airline is “scaling its operations across both the full-service and low-cost carrier markets to gain market share”.
The company floated in London and Kazakhstan last month. Its London-listed Global Depository Receipts trade at $9 a share, below their offer price of $9.50. MF
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Russian uranium processing to continue: Kazatomprom
As the world’s top producer of uranium and key trading partner of Russia, Kazatomprom (KAP) has to balance its buyers in the west with its friends just across the border. The company said on Friday its exports of uranium to Russia to be enriched would continue.
US Congress could block Russian imports of enriched uranium, with a bill soon to arrive in the Senate proposing a ban from 2028 onwards. “Increased attention is being paid to this issue, and risks and plans associated with compliance with sanctions regimes are being analysed,” Kazatomprom said. “There are [currently] no restrictions on the group's activities related to the supply of the group's products to end customers,” the company added.
The spot uranium price almost doubled last year as a result of years of low supply and speculators buying up yellow cake. Kazatomprom reported a 49-per-cent higher operating profit for 2023, at 432bn tenge (£750mn). AH
