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“The FTSE 100 is doing its best to get back through the psychologically-important 7,000 level as the new trading week kicks off. “Oil producers, pharmaceuticals and tobacco stocks are powering an advance in the blue-chip index, although a negative performance across markets in mainland Europe may weigh on investor sentiment as the day progresses. “Key events to drive markets up or down this week include the US fourth quarter earnings season getting in full swing on Tuesday, plus interest rate decisions from the Bank of Japan and European Central Bank on Wednesday and Thursday respectively,” says Russ Mould, Investment Director at AJ Bell.
Just Eat
“The departure of Peter Plumb as chief executive of Just Eat after less than a year and a half in the job is the latest hiccup for the previous stock market darling.
“At first glance, remarks from Plumb that now is the right time for him to step aside seem a bit odd given the short amount of time he’s been in the role. However, his departure isn’t a surprise given how the company’s share price had lost upward momentum under his tenure, plus the business had come under attack from activist investor Cat Rock.
“The latter implied the company was being too slow and unambitious. Cat Rock said the board had set goals that were ‘unjustifiably low and too easily achieved’.
“A new chief executive is often given time to bed into the role, get to know the business and work out their future strategy. But at some point they have to prove to the board and to shareholders that they can motivate staff and achieve the goals set out in their strategy. They are meant to be energetic, engaging and inspiring as leaders, not simply following the status quo.
“Cat Rock had complained that Plumb had been in the job for more than a year and that shareholders were still waiting for Just Eat to announce appropriate financial goals and for the board to hold management accountable with a properly aligned remuneration package.
“Although there is no reference to the activist investor in Plumb’s departure announcement, one can certainly speculate the events are linked.”
William Hill
“Sympathy is likely to be thin on the ground but the latest update from William Hill shows it is not easy being a bookmaker in the UK.
“Confirmation that profit fell in 2018 should not be a major shock give the regulatory challenges faced by the company, perhaps most notably with the cut in maximum stakes on fixed odds betting terminals. This will necessitate a big restructuring of the company’s high street business in 2019.
“Key to its hopes of returning to a sustainable growth path are its efforts to expand in the US, where the rules are generally being loosened, rather than tightened as they are in the UK. It is no surprise to see investment being poured into this expansion.
“An increase in its digital footprint is another way the company is looking to respond to the challenges facing the industry, with the deal to acquire Swedish online gambling site Mr Green close to completion.
“The ‘nobody harmed’ corporate initiative launched last year may be an attempt to pre-empt further regulation but is likely to be met with a good degree of scepticism.”
These articles are for information purposes only and are not a personal recommendation or advice.