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Burford Capital, Rolls-Royce and Glencore

A selection of updates from the IC Companies team
August 8, 2019

There has been plenty for investors to digest over the past week, not least of which the precipitous decline of Burford Capital’s (BUR) market value in the wake of a report from short-seller Muddy Waters accusing the litigation financier of playing fast and loose with its financial metrics. Click to get the lowdown from Alex Newman.

Alex has also been reviewing half-year returns for Legal & General (LGEN), something of a trailblazer in the global pension risk transfer market. This time around saw an increase in the quarterly pay-rate and a slight deterioration in its solvency II ratio. Click here to read Alex’s view on our income-themed call.

The embattled Trent 1000 engine programme is dominating the narrative where Rolls-Royce (RR.) is concerned, with the group anticipating the full-year impact to now sit around £450m-£500m, before falling by £50m-£100m in 2020. Of course, there are plenty of other issues to take on board, not least of which supply chain preparation as Brexit looms into view. Click here to get Alex Janiaud’s assessment of the group’s interim figures.

Brexit considerations are also to the fore where Hill & Smith (HILS) is concerned, although shareholders would probably have been more preoccupied with the reasons for a one-fifth hike in half-year earnings. Alex Janiaud reckons that the group’s “niche infrastructure offering and its rate of its US growth gives us cause for optimism”. Click here for the full appraisal.

The Glencore (GLEN) business model – the role of the commodity trader - has always been open to debate. But whatever insulation is provided by its trading activities isn’t immediately obvious in half-year figures which detail an 86 per cent drop in pre-tax profit on flat turnover. Natural resource companies, no matter what their size, are always in thrall to an underlying asset price. Click here to get Alex Hamer’s view on the interims.