New CFO at St James’s Place, Virgin margins hit

Wealth manager St James’s Place has had a difficult 12 months

St James’s Place shares more than halved in the past 12 months but it will be hoping for some stability after announcing the appointment of Caroline Waddington as chief financial officer.

She will move from Credit Suisse’s UK operations, replacing Craig Gentle who will be retiring from the business after six years.

The new CFO will need to settle investors’ nerves after the wealth manager was forced to overhaul the fees it charges its clients. In February it revealed it was setting aside £426 million for potential complaints. The hefty provision pushed the company into a pre-tax loss for 2023 and forced it to axe its dividend.

Crest Nicholson

House builder Crest Nicholson said operating profit fell sharply in the first half of the year as the firm continues to be battered by challenges in the property sector. 

The board of the FTSE 250 firm posted a 71.9% slide in operating profit to £6.2m, while revenue over the six months to April was down 8.9% to £257m. 

Crest Nicholson said it was still feeling the pinch from a tough market, with volatile mortgage rates and low consumer confidence having eaten into property builders’ bottom line in the last 18 months.

Virgin Money

Virgin Money investors have shrugged off its warning that interest rates will eat away at margins this year, with shares barely moving ahead of it being swallowed up by Nationwide. 

Net interest margin, a key metric for banks, is predicted to fall in the second half of 2024 as it feels the effect of interest rate cuts and growing competition, the company said in its interim results.

Despite the warning, shares in Virgin Money held flat in early trading at 214p.

The building society has offered 220p per share or around £2.9 billion for the FTSE 250 bank, and the deal has been approved by shareholders. However, it is facing an investigation by the Competition and Markets Authority. 

In the first six months, pre-tax profits rose 18% to £279 million compared to 2023’s £236m, while total customer lending lifted by 0.3% to £72.7 billion. 

Chief executive David Duffy said: “While we expect there to be headwinds through the second half of the year, we remain well placed to deliver growth in our target segments.”

Yesterday’s round-up

The US Federal Reserve said it expects to make only one rate cut this year, despite data showing that inflation has fallen faster than expected.

Officials kept borrowing costs at a 23-year high of 5.3% yesterday and pushed back the start of rate cuts to possibly as late as December this year.

The decision came after official data showed that US inflation fell by more than expected last month.

Shares in insurance and asset management group Legal & General fell 13.25p, or 5.5%, to settle at a four-month low of 229.75p as plans for a sweeping overhaul of the business failed to win over investors.

Mexican billionaire and Latin America’s richest man Carlos Slim revealed he has bought a 3% stake in telecom giant BT for around £400 million.

A spokesperson at Slim’s Grupo Carso claimed the move was a “financial investment, like many the group makes”.

The FTSE 100 stemmed recent losses as investors took damp UK economic data as a sign that inflation is continuing to slow. The index rose 67.67 points to 8,215.48.

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