Regulations and Law

Halma (HLMA) and Return on Capital

Recently, I talked about Diploma (DPLM) and their calculation of adjusted return on capital. This morning Halma (HLMA) published their half year results and they also have a strong emphasis on return on capital, but in this case they call it “ROTIC” (Return On Total Invested Capital). This was down slightly at 13.4% and they define it as Adjusted Profit After Tax divided by Total Invested Capital. The latter is shareholders funds, plus retirement benefit obligations, less deferred tax assets, plus ...

Round up on recent FRC and FCA developments

Our event at the FRC on 21 November, when the FRC will explain what they do and listen to members’ feedback, is a sellout and we are now operating a waiting list. Below is a roundup of recent FRC and FCA developments, to inform attendees and help guide questioning. FRC says corporate reporting could still be improved In its annual review of corporate reporting, the FRC said disclosures by large listed UK companies are generally good but detailed explanations and clarity could still ...

Confessions of a Tax Avoider

There have been extensive reports in the press about revelations contained in the so-called "Paradise Papers". One of the most intriguing of these has been the accusation of tax avoidance levelled at the Duchy of Lancaster, part of the Queen's private estate. I was therefore interested to read the details contained in this article in the Financial Times... and from it, I learnt that I am a tax avoider too! Before moving on to the specific issue, I will just point out ...

Lloyds Case Impressions, Ideagen AGM and Return on Capital

Yesterday I attended the Annual General Meeting of Ideagen (IDEA) at 12.00 noon in the City of London – see below – and afterwards spent an hour in the High Court listening to one of the witnesses being cross-examined in the Lloyds Banking Group case. What follows is just an impression of the scene because the whole case is running for months so in no way can this be considered a comprehensive report. I have covered some more details of the ...

ADVFN Results and More on Lloyds

ADVFN Plc (AFN) published their results for the year to June yesterday. I have a very small holding in the company (acquired for reasons I won’t go into). ADVFN are information providers on the stock market, primarily to private investors. Many people monitor their bulletin boards although like many such boards frequented by private investors, they are somewhat of a curate’s egg so far as serious or sophisticated investors are concerned. But they certainly have a large following – they say they ...

Lloyds Litigation, Collective Redress, and CLIG AGM

I went to the High Court in London this morning to hear the grilling of witnesses in the case brought by shareholders over the acquisition of HBOS by Lloyds. But I was disappointed to find when I got there that the first session was to be held in private – presumably the judge wants to discuss some legal issues with counsel for both sides. So I went to the AGM of City of London Investment Group (CLIG) instead where I hold ...

Rbs Snub to Chris Philp MP and Next Steps

Gavin Palmer was at the Tory Party Conference and in discussion with Chris Philp, MP, where it emerged that Chris had written three times to RBS asking Sir Howard Davies, RBS Chairman why they were objecting to our shareholder resolution for a Shareholder Committee. Regular readers will be aware that it was Chris who wrote an excellent paper covering Shareholder Committees in September 2016 which received wide publicity. See http://highpaycentre.org/files/HPC_42_WEB_amend_-_Restoring_Responsible_Ownership.pdf Despite Chris’ best efforts, RBS rebuffed his questions and refused to share their legal ...

HBOS and Lloyds Legal Case

This week sees the start of the legal case in the High Court by investors in the Lloyds TSB over the acquisition of HBOS – opening submissions are on Wednesday and it’s scheduled to run through to March next year. Anyone can attend these hearings of course but I think it will take a very patient person to sit through all of it. I have submitted written evidence on behalf of the litigants (represented by Harcus Sinclair) but it seems I ...

Guidance for UK Boards on Stakeholders

Review and commentary by Cliff Weight ICSA: The Governance Institute and The Investment Association (IA) have launched guidance to help UK company boards ensure they understand and weigh up the interests of their stakeholders when making strategic decisions. Commentary: My view is • They have recommended 10 principles. Principle number 9 is important -“The board should report to its shareholders on how it has taken the impact on key stakeholders into account when making decisions.” - The Government will introduce legislation to this effect ...

Dual class share structures: threat or opportunity?

I was interested to read this article in the FT today. It reports that the Hong Kong stock exchange is once more contemplating whether to permit listed companies to have dual class share structures. The exchange has considered this topic several times previously and has historically rejected it and not permitted such structures. In the UK, there isn't an absolute ban but the practice is deprecated and very few companies have such structures, Schroders (SDR/SDRC) being a notable exception. OTOH in ...