What to Watch: Another FTSE 100 CEO quits, Just Eat on track, and Funding Circle sees improvement
Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:
Another FTSE 100 CEO quits
The chief executive of medical device maker Smith & Nephew (SN.L) has become the 19th FTSE 100 CEO to announce their departure this year.
Namal Nawana will leave Smith & Nephew “by mutual agreement” on 31 October, the company said Monday. Roland Diggelmann, the former head of Roche Diagnostics, will replace Nawana as CEO.
Shares in Smith & Nephew (SN.L) fell by 5.1%.
Nawana’s exit comes less than 18 months after her joined as CEO and follows a disagreement over executive pay, according to the Financial Times. Smith & Nephew had considered moving its listing to the US where attitudes to CEO pay are laxer in a bid to boost Nawana’s compensation.
Smith & Nephew chairman Roberto Quarta said Nawana had “substantially transformed the business with a new strategy, purpose and culture, and renewed commitment to innovation, returning it to an improved growth trajectory.”
“There is clear momentum behind our strategy laid out last year, underlined by the company's performance generated by our team during 2019,” Nawana said.
Nawana is the latest in a growing list of FTSE 100 CEOs to announce their departure this year. His resignation means 2018 has now eclipsed 2013’s tally of 18 FTSE 100 CEO changes. The average since 2000 is 12.
Just Eat on track
Shares in takeaway platform Just Eat (JE.L) dropped on Monday as the company warned of “softer consumer spending”.
Shares declined 5.6% as the company said it was seeing “slower growth in our marketplace business, on the back of a broadly softer consumer spending backdrop and changing consumer preferences.”
The slump came despite strong growth in both revenues and orders, boosted by Just Eat’s push into delivery rather than simply linking customers to restaurants. Third quarter revenue rose 25% to £248m and order rose by 16% to 62m.
“The winning platform for food delivery will offer customers the broadest range, underlining the importance of our move to the hybrid business model and continuing investments in key markets,” interim CEO Peter Duffy said, adding that Just Eat is on track to meet full-year targets.
Funding Circle sees improvement
Shares in under-pressure Funding Circle (FCH.L) jumped higher, after the peer-to-peer lender reported an improvement in projected returns for the year.
Funding Circle, which matches lenders with borrowers and takes a cut, said loans under management in the third quarter rose by 31% on last year to £3.7bn. The number of loans arranged so far this year is 9% higher than it was at this time in 2018.
“In the third quarter, loans under management reached £3.7bn and projected returns for 2019 continued to show an improvement over recent years,” CEO Samir Desai said.
“In what remains an uncertain economic environment we continue to manage the business prudently, which we are confident is the right course of action for the long-term growth and development of our business."
Shares rose 7.8%. Funding Circle has seen its share price crash this year after cutting growth forecasts in July and amid problems with its secondary market for selling on loan investments.
Wirecard calls in auditors
German payments firm Wirecard (WDI.DE) on Monday said that it had hired KPMG to conduct an independent audit of its finances in the wake of allegations that it fraudulently inflated sales figures and profits.
The fintech giant has been the subject of a series of articles in the Financial Times, which have called into question its accounting methods.
The newspaper last week published a report based on internal spreadsheets and correspondence that appeared to show that around €4.2bn in payments routed through a Dubai intermediary company produced more profit than €62bn in transactions routed elsewhere.
While Wirecard has denied “allegations of impropriety”, the company has not disputed the authenticity of the documents published by the Financial Times. Shares in the company fell by more than 20% after the report.
Wirecard said that KPMG’s audit will begin “immediately” and that the accounting firm would “receive unrestricted access to all information on all levels of the group.”
Property billionaire eyes Covent Garden takeover
The property tycoon Nick Candy has confirmed a potential takeover bid for Covent Garden owner Capital & Countries (CAPC.L).
The businessman’s investment company Candy Ventures confirmed on Monday it was part of a consortium “in the early stages of considering a possible cash offer” for the whole of London-listed Capco.
Capco is one of London’s biggest property companies, owning central London’s popular Covent Garden district and a major redevelopment site in Earls Court in west London.
It came after speculation in the Sunday Times that Candy was eyeing a bid alongside Saudi Arabia’s public investment fund.
Candy is behind the luxury and controversial One Hyde Park development in Knightsbridge, which was reported to be one of the most expensive residential developments in the world when it was unveiled in 2011.
Pound, UK stocks bounce on Brexit
UK assets rallied on Monday, after Prime Minister Boris Johnson was forced to write to the EU requesting a Brexit extension.
The pound initially opened in the red but was trading slightly higher against the dollar and euro at close to 9.25am UK time. The recovery for the pound hurt the FTSE 100 (^FTSE), which had been half a percent higher at the open but was flat by 9.25am.
UK-exposed stocks — such as financials and house builders — rallied strongly, however. British Gas-owner Centrica (CNA.L) was up 3.8%, house builder Taylor Wimpey (TW.L) was up 3%, and Royal Bank of Scotland (RBS.L) was up 3%.
European stocks were mixed. France’s CAC 40 (^FCHI) was flat, Germany’s DAX (^GDAXI) was up by 0.6%, and the Euronext 100 (^N100) was flat.
Overnight in Asia, Japan’s Nikkei (^N225) closed up by 0.2%, while the Hong Kong Hang Seng Index (^HSI) and China’s Shanghai Composite (000001.SS) were both flat.
What to expect in the US
US stocks future are pointing to a higher open later today. S&P500 futures (ES=F) were up by 0.2%, Dow Jones futures (YM=F) were up by 0.1%, and Nasdaq futures (NQ=F) were up by 0.3%.
Companies reporting in the US later today include:
Halliburton (HAL)
