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magazineRecruiters, insurers and the week’s other big news
Recruitment firms were heavily under the cosh on 8 October with Robert Walters (RWA) and Michael Page (PAGE) falling by nearly 10% apiece as they cut earnings guidance.
Both companies attributed their struggles to political and economic uncertainty. PageGroup lowered its operating profit guidance for the full year to a range of £140m to £150m against market expectations of £150m to £160m, saying it has ‘limited forward visibility’ in its business. Robert Walters lowered its guidance for full year pre-tax profit to flat on last year instead of earlier expectations for a 6% increase.
INSURANCE WOES
Another sector under pressure was non-life insurance following the publication of an interim report on the industry’s pricing practices by the Financial Conduct Authority (FCA).
Hastings (HSTG), Direct Line (DLG) and Admiral (ADM) all saw their shares fall on 4 October as the FCA signalled it would take action to stop customers effectively being penalised for staying loyal.
The full FCA proposals aren’t expected until the first quarter of 2020 and the impact of any changes is yet to filter into forecasts but broker Canaccord Genuity believes Direct Line could be affected the most.
CEO CHANGES
Amid a growing exodus of FTSE 100 chief executives, Alison Cooper from tobacco firm Imperial Brands (IMB) and Bob Dudley from oil producer BP (BP.) have become the latest to hand in their notice.
Dudley will retire in 2020 having helped rehabilitate the oil major in the wake of the Gulf of Mexico oil spill. He arguably left on better terms than Cooper whose exit came just a week after a major profit warning from the company which suggested its strategy of looking to vaping to replace declining sales of traditional tobacco products could be in trouble.
Building products firm SIG (SHI) issued its own profit alert on 7 October amid a weak construction market. The company is taking action, agreeing to sell its air handling division to France Air Management for €222.7m (£198.3m) including debt. Separately, it has also agreed to sell its building solutions unit to Ireland’s Kingspan (KGP) for £37.5m.
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