Companies roundup: HSBC’s CEO and $3bn buyback & Whitbread

HSBC (HSBA) will begin the search for a new chief executive after current incumbent Noel Quinn announced that he will step down and retire after five years in the job. Mr Quinn cited a better balance between work and his personal life for the decision. The announcement, which came alongside the bank’s first quarter trading update, marks the formal ending of a career that started in the institution as part of the old Midland Bank in 1987. It also means that chairman Mark Tucker will need to choose his third chief executive since taking up the post in 2017.

Unsurprisingly, the news almost completely overshadowed the bank’s first quarter trading update, which actually showed decent progress with first quarter pre-tax profits coming in at $12.7bn, just ahead of consensus forecasts.

The bank also announced a new share buyback scheme of $3bn as Quinn’s parting gift to shareholders. His reign had been marked by strife with some of its largest shareholders over whether the bank should remain headquartered in the UK instead of moving entirely to Asia, with only China’s shaky property market and increasing belligerence silencing the doubters. JH

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Whitbread boosts dividend and unveils new plan

Whitbread (WTB) raised its full year dividend by 31 per cent and announced a further £150mn share buyback in its annual results, as the Premier Inn owner set out a new plan to rejuvenate its underperforming food and beverage (F&B) arm. 

Around 1,500 jobs will be cut as part of the ‘accelerating growth plan’, which will result in the sale of 126 restaurants and the conversion of 112 restaurants into hotel rooms. Management hopes the fresh strategy "will deliver a step change in our margins and returns". 

For the year to 29 February, revenue rose 13 per cent to £2.96bn and pre-tax profit was up 21 per cent to £452mn. The share price reaction was muted on a mixed current trading statement, as both Premier Inn UK and F&B revenue fell at the start of the new financial year. CA

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Hargreaves Lansdown scores well

Hargreaves Lansdown (HL.) put out a surprisingly positive third quarter trading update as the share and fund platform seemed to overcome a narrowing of net margins on cash, offsetting this with higher volumes of net new business worth £1.6bn. The quarter is a traditionally brisk one for HL as investors make use of their SIPP and ISA limits prior to the end of the tax year. Consequently, client cash balances increased during the quarter to £12.4 bn (2023 Q3: £13.5bn) as investors put resources aside in tax-efficient wrappers.The market responded by bidding up the shares by more than 6 per cent. 

Quarterly revenue increased by £22mn on the previous year to £200mn as the benefits from increased dealing volumes and higher platform revenue from higher assets under administration fed through. There were positive signs that investors are starting to return to the equities market, with share dealing volumes averaging 794,000 per month in the quarter, compared with 770,000 at this point in 2023. Overseas shares now represent nearly a quarter of total share deals as the US becomes a prime investment market for UK investors. JH

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Card Factory reinstates dividend

Card Factory (CARD) shares rose by 7 per cent in early trading after the greeting card retailer resumed dividend payments with a 4.5p per share recommended payout on the back of annual revenue and profit progress. For the year to 31 January, revenue rose 10 per cent to £511mn and pre-tax profits climbed by a quarter to £65.6mn. The company opened 26 new stores in the year, as price increases and “stable transaction volumes” underpinned organic growth of 7.6 per cent. CA