Aviva's sale of its USA unit means that the programme of sales of non-core businesses, or those that needed more capital than Aviva was prepared to commit, is now largely over. The US disposal allows internal debt to continue to reduce and boosts the key internal surplus capital ratio the difference between the amount required to run the business and the amount of capital available to about 180%, which would be regarded as comfortable elsewhere in the sector. The second part of the restructuring put in place by John MacFarlane, the Chairman, on the departure of Andrew Mossas chief executive is a more boring grind on efficiencies, margins and cash-flow and a focus on areas of growth.
In parallel, this year's dividend cut allows the new Chief Executive, Mark Wilson, to start to rebuild payments again on a more comfortable level of cover. If the cut is implemented as forecast, investors will get a payment of 14.6p, putting the shares, up 5.5p at 413p, on a forward yield of 3.5%. The eventual payment may be more generous. The shares
have done well this year despite that dividend cut but with the support of that yield they look to have farther to go longer term, The Times's Tempus says.
Ted Baker, the FTSE 250 clothing brand, yesterday announced a 50% leap in first half profits. Given that the company's earnings are still very heavily weighted towards the second half the later means it is well on track to meet analysts' estimates for the full year. No surprise then that it rewarded shareholders with a 20% increase in the interim dividend. As well, the company's current inventory levels - £75.8m at the half year - are £16.9m higher than at the same stage last year. This is in line with increased trading volumes, but it underlines the retailer's confidence.
As well, the company is starting to branch out towards China and the US, although for now it remains a largely UK and Europe -focused operation. "The only problem here is the rating, the shares trade on a 2014 forecast multiple of 29 times, falling to 25 times next year. Ted Baker is a good company with much to like except the share price, hold," The Daily Telegraph's Questor team says.
Gemfields exemplifies the sort of unexpected political risk facing many natural resources companies. Its main asset is a mine in Zambia producing a fifth of the world's emeralds. These have always been auctioned there, in Singapore and India, to maximise potential customers. The Zambian Government has decided that all auctions must now take place on its soil. As a result, one of the three events was pushed into the current financial year, as was the first ruby auction planned in neighbouring Mozambique.
The auction, held in July, was a success and earnings will recover this year, but it does mean one lost auction. Talks continue with the authorities. Gemfields is lessening its reliance on emeralds by seeking sapphires and other gems elsewhere. It also completed the purchase of the luxury brand Fabergé earlier this year. This was an odd deal from the company's biggest shareholder, the former BHP Billiton head Brian Gilbertson but the issue of shares worth $90 million did at least raise their availability. Gemfields shares have come back from 34½p at the start of the year and fell another 1¾p to 24¼p. Interesting, but still speculative, Tempus says.
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