Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Sage
Computer software providers Sage LON:SGE have this morning announced a trimming of their business following the disposal of a Brazilian operation. The plan was announced in full year results last November, but with the sale agreed following an auction process the numbers are now clear. The unit achieved revenues last year of £54m and profits of £2m, yet the deal is only worth £1m up front plus up to £9m in deferred considerations. The division made an £8m loss the previous year and there are strategic reasons for the disposal, but the multiple still seems low.
Avon Rubber
Avon Rubber LON:AVON, a company best known for its production of military grade gas masks (and parts for dairy milking machines…) may have been expected to fare well during last week’s market rout, but shares still lost ground. However this morning the company is confirming a new, $265m deal with the US Army for the provision of body armour. The deal is a result of Avon having acquired 3M’s ballistic protection business earlier in the year for $91m – a deal which already appears to be paying dividends.
Hiscox
A mixed bag for specialist insurer Hiscox LON:HSX this morning who have published full year results. Written premiums are rising and a series of large catastrophe events have impacted profits, but it’s not all bad news as investment returns have risen sharply. The company notes that the COVID19 outbreak may have some impact on claims for the coming year, although adds that exposure is ‘controlled’ here. The dividend is being increased by 3.5%.
