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“Higher oil prices helped to push up the FTSE 100 by 0.2% to 7,522 with major index constituents Royal Dutch Shell and BP both rising on Monday. Brent crude jumped 2.2% to $63.87 per barrel following the weekend’s tensions between Iran and the UK. Other key risers on the UK market included mining and packaging companies. “All eyes will be on UK domestic stocks tomorrow when the Conservative Party leadership contest result is announced,” says Russ Mould, Investment Director at AJ Bell.
Metro Bank
“After an aggressive growth spree which saw Metro Bank set up shop on high streets across the UK, the bank is now in retreat. Just over a year ago it bought £523m worth of mortgage loans from Cerberus; it has now confirmed speculation that it is selling some loans, thought to be involving a deal with the same party.
“This is the latest sign of a company desperate to get itself back on track by injecting more capital into the business to put it on a stronger footing.
“Founder and Chairman Vernon Hill has previously talked about creating the first major high street bank in over 100 years in Britain from scratch. The journey turned chaotic last year and shareholders have seen significant value wiped off their investment in the bank.
“With a risk that all the negative publicity could hurt new customer acquisition numbers, not helped by the regulators investigating the bank over mis-categorising various loans, Mr Hill is unsurprisingly under considerable pressure to step down.
“Half year results due on 24 July are likely to include fighting talk from the chairman who seems reluctant to walk away.”
Ascential
“Acquisitions and disposals make media firm Ascential’s results a difficult read.
“There is, for example, a big difference between the adjusted and statutory profit numbers – most of which relates to M&A-related adjustments.
“Reassuringly cash conversion is still above 100% so investors can have some confidence this is not a case of using frequent deals to disguise a poor quality business.
“The company has been through a dramatic period of transition as it pivots away from events and exhibitions towards information services.
“Of the events it has retained, the jewel in the crown is the Cannes Lions advertising festival which regained its roar in June after the company hit the reset button. Overall the group’s numbers look fairly decent with organic growth close to double-digit levels.
“The strategic investment in analytics company Jumpshot, with a view to acquiring the business from current owner software firm Avast, is reflective of Ascential’s continuing appetite for deals, its ongoing metamorphosis into an information product-led business and of how the digital economy is becoming increasingly mainstream.”
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