Shares Magazine - May 24, 2018

BIG NEWS

8 | SHARES | 24 May 2018

T

he shock departure of senior management at

KCOM (KCOM) has started tongues wagging

that a break-up of the group is on the cards.

ŚŝĞĨĮŶĂŶĐĞŽĸĐĞƌ:ĂŶĞŝŬŵĂŶƌĞƐŝŐŶĞĚŽŶ

ϭϳDĂLJ͕ŚŽƚŽŶƚŚĞŚĞĞůƐŽĨĐŚŝĞĨĞdžĞĐƵƟǀĞŝůů

,ĂůďĞƌƚ͛ƐĚĞĐŝƐŝŽŶƚŽƐƚĂŶĚĚŽǁŶĂŌĞƌĂŶϭϭͲLJĞĂƌ

ƌƵŶǁŝƚŚƚŚĞĐŽŵƉĂŶLJ͘ŽƚŚĂƌĞƐƚĂLJŝŶŐŽŶƵŶƟů

replacements are found.

These announcements caught the market by

ƐƵƌƉƌŝƐĞ͕ĐŽŵŝŶŐũƵƐƚǁĞĞŬƐĂŌĞƌ<KD͛ƐĐĂƉŝƚĂů

ŵĂƌŬĞƚƐĞĚƵĐĂƟŽŶĚĂLJĨŽƌĂŶĂůLJƐƚƐĂŶĚŝŶǀĞƐƚŽƌƐ͘

It is believed that no hint of the impending

departures was given at the event on 1 February.

^ƉĞĐƵůĂƟŽŶŝƐŶŽǁĐŝƌĐůŝŶŐƚŚĂƚĂŵĂŶĂŐĞŵĞŶƚ

overhaul has taken place designed to arrest years

ŽĨƉŽŽƌĮŶĂŶĐŝĂůƉĞƌĨŽƌŵĂŶĐĞĂŶĚĂƐŚĂƌĞƉƌŝĐĞ

ƚŚĂƚŚĂƐƐƚĂŐŶĂƚĞĚĨŽƌĮǀĞLJĞĂƌƐ͘

<KDŝƐĂŵŝƐŚŵĂƐŚŽĨĐŽŵŵƵŶŝĐĂƟŽŶŶĞƚǁŽƌŬ͕

ŝŶĨƌĂƐƚƌƵĐƚƵƌĞƐĞƌǀŝĐĞĂŶĚĞŶƚĞƌƉƌŝƐĞƐŽŌǁĂƌĞ

ďƵƐŝŶĞƐƐĞƐ͘/ƚŝƐďĞƐƚͲŬŶŽǁŶĨŽƌƌƵŶŶŝŶŐƚŚĞ,Ƶůů

Shock management

departures could pave

way for KCOM break-up

Years of poor financials and stagnant share price spark rethink

ĂŶĚĂƐƚzŽƌŬƐŚŝƌĞĐŽŵŵƵŶŝĐĂƟŽŶƐŶĞƚǁŽƌŬƚŚĂƚ

provides calls and broadband internet to around

ϮϬϬ͕ϬϬϬůŽĐĂůƌĞƐŝĚĞŶƚƐĂŶĚďƵƐŝŶĞƐƐĞƐ͘

This part of the business provides the meat of

<KD͛ƐƉƌŽĮƚĂŶĚĐĂƐŚŇŽǁ͘dƌĂŶƐŝƟŽŶŝŶŐŵŽƌĞ

ĐƵƐƚŽŵĞƌƐƚŽŝƚƐĮďƌĞͲƚŽͲƚŚĞͲƉƌĞŵŝƐĞƐŶĞƚǁŽƌŬĐŽƵůĚ

drive incremental price increases if customers up

ƚŚĞŝƌďƌŽĂĚďĂŶĚĚĂƚĂƵƐĂŐĞ͕ƉŽƚĞŶƟĂůůLJĐƌĞĂƟŶŐĐŽƐƚ

ƐĂǀŝŶŐƐďLJƐǁŝƚĐŚŝŶŐŽīƚŚĞĐŽƉƉĞƌĐŽŶŶĞĐƟŽŶƐ͘

&ŽƌLJĞĂƌƐ<KDŚĂƐƌĞƚĂŝŶĞĚƚŚĞĨĂŝƚŚŽĨŝŶĐŽŵĞ

ŝŶǀĞƐƚŽƌƐƚŚĂŶŬƐƚŽƚŚĞƌĞůŝĂďůĞĐĂƐŚŇŽǁƐĨƌŽŵ

ŝƚƐ,ƵůůĂŶĚĂƐƚzŽƌŬƐŚŝƌĞŶĞƚǁŽƌŬƉƌŽǀŝĚŝŶŐƚŚĞ

ďĂĐŬŝŶŐĨŽƌĂƩƌĂĐƟǀĞĚŝǀŝĚĞŶĚƐĞǀĞŶŝŶƚŚĞĨĂĐĞŽĨ

pension scheme funding requirements.

But dividend growth is coming under increasing

ƚŚƌĞĂƚĂŵŝĚĂƩĞŵƉƚƐƚŽŐƌŽǁŝƚƐĞŶƚĞƌƉƌŝƐĞĂŶĚ

ƐĞƌǀŝĐĞďƵƐŝŶĞƐƐĞƐ͘KŋŽĂĚŝŶŐƚŚŽƐĞƉĂƌƚƐƚŽ

ĐŽŶĐĞŶƚƌĂƚĞŽŶŝƚƐ,ƵůůĂŶĚĂƐƚzŽƌŬƐŚŝƌĞŶĞƚǁŽƌŬ

ĐŽƵůĚƚŚĞƌĞĨŽƌĞŵĂŬĞƐĞŶƐĞ͕ƉŽƚĞŶƟĂůůLJĞĂƐŝŶŐĐĂƐŚ

pressures and releasing value for shareholders. (SF)

t>d,DE'Z Brewin

Dolphin (BRW) is forecast by

analysts to increase pre-tax

ƉƌŽĮƚďLJŶĞĂƌůLJϭϮйƚŚŝƐLJĞĂƌ

ƚŽάϳΘ͘ϭŵĂŶĚďLJĂĨƵƌƚŚĞƌ

ϭϯйŝŶϮϬϭεƚŽάΘΘ͘Ϯŵ͘

The company is on a roll,

judging by its latest half year

results which showed net new

ŝŶŇŽǁƐŝŶĚŝƐĐƌĞƟŽŶĂƌLJĨƵŶĚƐ

under management growing at

an annualised rate of 7.7%.

dŚĞάϭďŶǁĞĂůƚŚŵĂŶĂŐĞƌ

ŝƐďƵƐLJĐŽŶƐŽůŝĚĂƟŶŐĂŚŝŐŚůLJ

fragmented market having

ďŽƵŐŚƚƚŚĞĮŶĂŶĐŝĂůƉůĂŶŶŝŶŐ

and investment assets of

ƵŶĚĞĞͲďĂƐĞĚůĂƌŬdŚŽŵƐŽŶ

MortgageFinders earlier

this week.

dŚĞŵŽǀĞǁŝůůĂĚĚϭρϬ

new clients to Brewin Dophin

and is part of the company’s

ĂŝŵƚŽďƌŽĂĚĞŶŝƚƐĮŶĂŶĐŝĂů

planning and investment

management arm.

Shares in the business have

been rallying since summer

ϮϬϭς͕ƌŝƐŝŶŐďLJŶĞĂƌůLJΘϬй

ƚŽϯΘςƉ͘;^Ϳ

Shares in Brewin Dolphin up by nearly 80%

in two years

The wealth manager is expected to keep growing earnings at an impressive rate