Spread better IG Group is making a $1bn play to break the US options and futures market.
The company said with interim results that it had agreed to buy Tastytrade, a US online brokerage “and trading education platform” with over 105,000 active accounts. A total consideration of $1bn will be paid to Tastytrade’s shareholders, comprising $300m in cash and the issue of 61m new IG shares, the company said.
The “landmark transaction that expands and diversifies IG’s growth drivers through entry into the world’s largest listed derivatives market,” IG said. Buying Tastytrade “significantly increases the scale and relevance of IG’s existing US business through the acquisition of a fast-growing, high margin business that is well positioned to benefit from the structural growth in self-directed investing in the US listed options and futures market”.
Half-year results from IG showed net trading revenue up 67 per cent to £416.9m for the six months ending November. Profit before tax increased 129 per cent to £231.3m as active clients rose 55 per cent to 238,600.
Sage said it performed in line with expectations last quarter. The software maker said in a trading update that organic revenue growth for the three months ended December was up 1.4 per cent as subscriptions sales growth cushioned a planned reduction in licence sales and professional services revenue.
Daily Mail and General Trust reported a 20 per cent fall in group revenue for its fiscal first quarter to December. Sales via the publisher’s newspaper business fell 9 per cent as advertising revenue dropped 15 per cent, caused in part by a much reduced readership of the Metro commuter free-sheet. Circulation revenue fell 7 per cent on an underlying basis, or 2 per cent when its acquisition of the I newspaper in late 2019 is included in the figures.
Pets at Home posted total revenue growth for the December quarter of 18 per cent to £302m as the pet store benefited from essential retailer status through the UK’s second lockdown. Online sales were up 70.7 per cent and its vets business showed like-for-like growth of 17.8 per cent. The company maintained the raised earnings guidance it had given earlier this month.
Ibstock said it expects to report adjusted ebitda for 2020 “modestly above” the previous guidance of £50m given in October. A strong recovery in market conditions through the second half would result in revenues of around £315m for the full year, down by 23 per cent compared with 2019, with second half performance down by approximately 10 per cent year on year, the brick maker said.
Mattresses-by-mail company Eve Sleep said record trading through Black Friday and Boxing Day had trimmed ebitda losses from £10.9m in 2019 to £2m last year. Revenue was up 6 per cent to £25.2m. Recent trading has followed the same positive trends seen in recent months in spite of industry-wide shortages of raw materials, it said.
Video game maker Team17 said it has bought full ownership of Golf With Your Friends from a third-party developer for £12m. The company said 2020 results will be “ahead of the board’s expectations” with revenue and adjusted ebitda growth of around 34 per cent and 36 per cent respectively.
Hipgnosis, the deal-hungry music rights fund, said it had bought producer rights for albums by Metallica and Michael Bublé from their collaborator Bob Rock. The purchase, Hipgnosis’s fifth of 2021 so far, came as the company set out terms of its latest equity fundraising at 121p a share, a 1.2 per cent discount to Wednesday’s closing price.
Ladbrokes owner Entain has confirmed the appointment of Jette Nygaard-Andersen as chief executive to succeed Shay Segev, who will step down with immediate effect having resigned earlier this month. Ms Nygaard-Andersen joined Entain in 2019 as a non-executive director. News of the appointment came as Entain reported full-year net gaming revenue growth of 27 per cent and unchanged profitability guidance for the full year.
Beyond the Square Mile
United Airlines vowed to accelerate cost-cutting after its cash burn rose in the fourth quarter because of interest payments on its mounting debt and the costs of reducing staff. The carrier, the second US airline after Delta Air Lines to release results for 2020, posted a net loss of $1.9bn for the fourth quarter and $7.1bn for the whole year. Cash burn rose to $33m a day in the fourth quarter, up from $25m a day in the third quarter.
Elevated demand for paper towels, washing-up liquid and laundry detergent has lasted into the winter, giving Procter & Gamble another bump in sales and prompting the consumer goods bellwether to increase its annual forecasts once again. The household products group predicted that sales of brands including Ariel, Bounty, Tampax, Pampers and Head & Shoulders would remain strong even after the rollout of coronavirus vaccines.
Brazil’s stock market is gearing up for another rush of flotations in 2021, after an army of new investors helped spur the strongest year for initial public offerings in more than a decade. An iron ore miner, a crematorium operator and an online furniture seller are among a list of 41 companies that have announced their intention to debut on São Paulo’s B3 exchange.
Essential comment before you go
The financial system challenge for the Biden administration is not short term but the longer term problem of relinking bubbly markets to economic realities.
Burberry is currently trading at 18 times 2021’s operating profits versus 20 and 35 times for rivals Moncler and Prada. Even with its problems, at that price it feels like a punt worth taking.
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