UK to Pursue Plans to Cut Corporate Fundraising Paperwork
The FCA said on Tuesday that listed companies can raise a further 75% of their equity capital without issuing a prospectus, lifting the threshold from 20%. The FCA estimated it will reduce costs for secondary sales by about £40 million ($53.7 million) per year.
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Yahoo
a few seconds ago
- Yahoo
CoreWeave IPO Investors Sitting on Big Gains Get Chance to Sell
(Bloomberg) -- CoreWeave Inc.'s March initial public offering has been a roaring success for anyone lucky enough to get in at the start. The stock more than quadrupled by mid-June. Even after a recent selloff, the shares are still up nearly 150%. The US-Canadian Road Safety Gap Is Getting Wider Festivals and Parades Are Canceled Amid US Immigration Anxiety To Head Off Severe Storm Surges, Nova Scotia Invests in 'Living Shorelines' Five Years After Black Lives Matter, Brussels' Colonial Statues Remain For Homeless Cyclists, Bikes Bring an Escape From the Streets The problem, though, is most of those early investors haven't been able to cash in. That changes Friday for holders of more than 80% of CoreWeave's Class A shares, with the IPO lockup expiring two days after its second earnings release as a public company. The stock plunged 33% in those two days, in part, analysts say, in anticipation of a flood of selling. 'It's a challenging, even confusing setup,' said Dave Mazza, chief executive officer at Roundhill Investments, which holds CoreWeave. 'It's reasonable to expect there could be significant selling, which is already weighing on shares. Over the long run, it opens up the stock to have greater float.' CoreWeave's shares available to trade currently stand at less than 15% of those outstanding, compared to an average of roughly 95% for stocks in the S&P 500 Index, according to data compiled by Bloomberg. CoreWeave stock fell as much as 4.8% in early trading Friday in New York, extending losses into a third consecutive day. The Livingston, New Jersey-based company has become a popular way to bet on soaring spending for AI computing and counts Microsoft Corp. as its biggest customer. The stock closed at a record market value of $88 billion in June, up from less than $20 billion in the wake of its debut. But the shares have slumped amid concerns about CoreWeave's money-losing operations as well as a proposed all-stock acquisition of data-center operator Core Scientific Inc. CoreWeave closed on Thursday with a market value of about $49 billion, down 46% from the June 20 peak. Analysts expect the end of the lockup to at best cap near-term advances in the shares, as early investors lock in some gains. At worst, they see the stock falling even further. D.A. Davidson's Gil Luria, who is one of the three analysts tracked by Bloomberg with a sell rating on the stock, sees downside of more than 60%, based on his $36 price target. One owner that probably won't be selling: Nvidia Corp. The company, which dominates the market for AI chips that it supplies to CoreWeave, has about a 6.5% stake after slightly boosting its holdings in the quarter that ended in June, according to data compiled by Bloomberg. The position is worth about $2.4 billion at current levels. For long-term investors, CoreWeave's business prospects still look promising with tech giants spending ever larger sums in a race for AI supremacy. In its second-quarter earnings report on Wednesday, CoreWeave raised its revenue forecast for 2025 to $5.15 billion to $5.35 billion, from $4.9 billion to $5.1 billion. But that was overshadowed by a wider-than-expected net loss in the quarter. CoreWeave plans to spend as much as $23 billion on capital expenses this year. Of course, even if early investors like hedge-funds Magnetar Capital and Coatue Management want to sell, they have an incentive not to unwind positions too quickly, which could send the stock into a downward spiral. And having more shares available to trade could also be a benefit in the long run, giving more investors the opportunity to snap up the stock, according to Citigroup analyst Tyler Radke. 'The upcoming lock-up may further pressure shares, but we believe buyers will emerge,' Radke wrote in a research note earlier this week. Top Tech Stories The Trump administration is in talks with Intel Corp. to have the US government take a stake in the beleaguered chipmaker, according to people familiar with the plan, in the latest sign of the White House's willingness to blur the lines between state and industry. In the first two weeks of August alone, Masayoshi Son has added $11 billion to his fortune as SoftBank Group Corp.'s artificial intelligence bets sent its shares to record highs. That's put Son's wealth firmly back on the upswing after years of turbulence. Meta Platforms Inc. is spending a fortune to assemble the brightest minds in artificial intelligence. Chief Executive Officer Mark Zuckerberg may want to note: Research suggests that packing a team with too much genius can backfire. Accenture Plc is buying Australian cybersecurity firm CyberCX, its largest acquisition to date in the sector that will boost operations in the Asia-Pacific region. Earnings Due Friday No major earnings expected --With assistance from Subrat Patnaik and David Watkins. (Updates stock moves after market open) Americans Are Getting Priced Out of Homeownership at Record Rates What Declining Cardboard Box Sales Tell Us About the US Economy Bessent on Tariffs, Deficits and Embracing Trump's Economic Plan Dubai's Housing Boom Is Stoking Fears of Another Crash Twitter's Ex-CEO Is Moving Past His Elon Musk Drama and Starting an AI Company ©2025 Bloomberg L.P. Sign in to access your portfolio
Yahoo
a few seconds ago
- Yahoo
ABF snaps up Hovis despite sales, profit pressures in UK bread
Associated British Foods (ABF) is to acquire the Hovis bread business from UK headquartered private-equity firm Endless. ABF confirmed the deal today (15 August), ending months of speculation over the UK-listed company's plans for its own bread division, Allied Bakeries, the Kingsmill and Sunblest brand owner put up for review in April. However, rather than opting to sell Allied Bakeries after ABF said in April that the division was facing a 'very challenging market', the London-listed company is combining it with Hovis to 'create a profitable UK bread business that is sustainable over the long term'. Those comments came from ABF's CEO George Weston, who added in a statement: 'Supporting the Hovis and Kingsmill brands with well-invested and efficient operations will also enable innovation and growth. 'This solution will create value for shareholders, provide greater choice for consumers and increase efficiencies for customers.' Financial terms for the transaction were not disclosed by ABF as it said it had 'reached an agreement to acquire Hovis', subject to regulatory approval. Endless bought the business in 2020. At the time, Hovis was 51%-owned by US investment firm The Gores Group and UK food company Premier Foods, the owner of the Mr Kipling cakes brand. Jefferies International estimated the deal value at £75m ($101.6m at today's exchange rate) in terms of what it deemed in 2020 as 'implied gross proceeds'. Endless provided a statement in response to Just Food's request for comment, noting the deal will need to be approved by the UK's Competition and Markets Authority (CMA). Aidan Robson, a managing partner of Endless, said: 'We are proud of the journey we've shared with Hovis to date, supporting this historic brand in a highly competitive and challenging market. The transaction with ABF represents an opportunity to create a platform for long-term sustainability in the bakery sector for the benefit of retailers and consumers. "While we work towards achieving CMA clearance of the transaction, our focus remains on Hovis to continue delivering exceptional products and service to its customers.' When ABF revealed the review of Allied Bakeries in April in its financial results briefing for the 24 weeks to 1 March, the Primark clothing stores owner said the bakery division had added to the group's operating losses amid 'lower' volumes and sales. ABF added more commentary today: 'Profitability at Allied Bakeries has been increasingly challenged in recent years by a decline in demand for pre-sliced, packaged bread and a loss of scale in Allied Bakeries' nationwide distribution network serving the major retailers with daily delivery of bread and bakery goods.' However, it added: 'The acquisition [Hovis] will combine the production and distribution activities of the two businesses, driving significant costs synergies and efficiencies… 'The combined business will be better placed to compete effectively and to establish a stable platform for product innovation in the segments of the UK bakery category that are growing as a result of changing consumer tastes and needs.' James Watson, a UK partner at consultancy Argon & Co., said: 'The Hovis-Kingsmill merger is a clear sign of the pressures facing the UK bakery sector. With inflation driving up costs and bread consumption in steady decline, consolidation was always a question of when, not if. 'The deal gives ABF a new market leader with 41% share, overtaking Warburtons' 34%. But behind the headline is a tough reality: both businesses have been making unsustainable losses. The real prize here is efficiency – rationalising overlapping bakery networks and cutting costs in procurement, logistics, and manufacturing.' ABF said the forward plans for the combined business include the 'improvement in existing products and expansion into new product ranges'. Allied Bakeries also produces the Allinson's bread and flours brand. The division of ABF also supplies UK retailers and supermarkets with private-label bread products. ABF does not break down the financial performance of Allied Bakeries or for other food brands within its grocery reporting unit, which includes Twinings tea and the Patak's and Blue Dragon sauces lines. Group results for the 24 weeks to 1 March showed a 2% decline in sales to £9.51bn, while adjusted operating profit dropped 12% to £835m. Profit before tax fell 21% to £692m with an EPS decrease of 8% to 83.6 pence. Shares in ABF were little changed at 2,270 pence in London today following the Hovis announcement. Watson at Argon added: 'Execution will be everything. Disrupting existing customer relationships now, while both brands are losing share, would risk compounding the problem. 'Longer term, the challenge is to stop managing decline and start building momentum. That means addressing structural issues in the bread market and responding faster to shifting consumer trends - whether that's health, speciality products, or premium lines.' "ABF snaps up Hovis despite sales, profit pressures in UK bread" was originally created and published by Just Food, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. 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Forbes
3 minutes ago
- Forbes
Korn Ferry: Industry Leader Bouncing Back
Volatility reminiscent of the meme stock phenomenon of 2021 recently grabbed headlines. Shares of department store Kohl's (KSS) surged nearly 90% before plunging more than 25% – all within the same day on July 22. Opendoor (OPEN) surged from $1/share to $5/share and back down to $2/share, all within a week. With so much happening at once, it's easy for investors to get swept up in the noise. These are the times when discipline and clarity matter most. Staying grounded in fundamentals, not chasing momentum or headlines, is essential. My mission is to equip investors with rigorous, transparent, and reliable research so they can cut through the chaos and make more confident, better-informed investment decisions. My latest Long Idea is a great example of the edge that superior fundamental research provides. This company is an industry leader, properly aligns executives' interests with shareholders' interests, provides high yield backed by ample cash flows, and its stock looks undervalued. I originally made Korn Ferry (KFY) a Long Idea in February 2020 and reiterated my bullish opinion on it in January 2021. Since my original report, the stock is up slightly less than the S&P 500 even as the business grew on both the top and bottom line. I'm here to remind investors that KFY remains cheap and still provides quality risk/reward. KFY offers favorable Risk/Reward based on the company's: What's Working Proprietary Intellectual Property and Dataset Provides an Edge Korn Ferry's key competitive advantage comes from its comprehensive people and pay dataset. The company leverages and monetizes its dataset throughout each of its business segments to offer a more comprehensive solution to clients at scale. Korn Ferry has expanded and improved its dataset at a rapid pace over the last five years. In fiscal 2Q20, the company's proprietary dataset included 4 billion individual data points, 69 million assessments, compensation data for 20 million people, and organizational benchmark data on 12,000 firms. As of fiscal 4Q25, and after the acquisition of both Salo and Trilogy International, the company's dataset includes 10+ billion individual data points, 108 million assessments, compensation data for 28 million people, and organizational benchmark data on 31,000 firms. As more firms recognize the importance of specialized high quality data, Korn Ferry's proprietary dataset has even more value. Diversified Industry Leader Korn Ferry's business is diversified both operationally and geographically. Korn Ferry operates five business segments in more than 50 countries: Forbes ranks Korn Ferry the #1 executive recruiting firm and the #4 professional recruiting firm in the U.S. in 2025. Fee Revenue Picking Back Up After a slowdown in the hiring and consulting industry over the last two years, Korn Ferry is returning to growth in recent quarters. Korn Ferry grew its 'new business', which represents new contracts, not changes in scope on existing contracts, 1% and 5% YoY on a constant currency basis in fiscal 3Q25 and fiscal 4Q25, respectively. In fiscal 4Q25, the company grew fee revenue YoY in four of its five operating segments. Overall, the company's total fee revenue grew 4% YoY on a constant currency basis in fiscal 4Q25. Additionally, Korn Ferry has a long track record of growing its fee revenue, which emphasizes the sustainability and cross selling capabilities of its platform. Korn Ferry's total fee revenue grew 10% and 9% compounded annually over the last 10 years and 20 years, respectively. Figure 1: Korn Ferry's Total Fee Revenue: Fiscal 2015 – Fiscal 2025 Further Growth Opportunities Abound Korn Ferry enjoys strong tailwinds from the growth in its industry. forecasts the overall HR & recruitment services market will grow 15% compounded annually from 2024 to 2034. More specifically, these segments of the market are projected to grow by the following rates: Figure 2: Global HR & Recruitment Services Market Forecast From 2024 Through 2034 Top- and Bottom-Line Growth Across Decades Korn Ferry has grown revenue and net operating profit after-tax (NOPAT) by 8% and 13% compounded annually since fiscal 1999, respectively. See Figure 3. More recently, the company improved its NOPAT margin from 8.6% in fiscal 2015 to 9.7% in fiscal 2025 while invested capital turns remained the same at 1.4 over the same time. Rising NOPAT margins drive Korn Ferry's return on invested capital (ROIC) from 12.3% in fiscal 2015 to 13.6% in fiscal 2025. Additionally, the company's Core Earnings, which is a cleaner and more accurate measure of a company's earnings, grew 11% compounded annually from $82 million in fiscal 2015 to $228 million in fiscal 2025. Figure 3: Korn Ferry's Revenue and NOPAT: Fiscal 1999 – Fiscal 2025 Industry Leading Profitability Korn Ferry is not only one of the top-ranked recruitment and consulting service providers, but it is also one of the most profitable. Per Figure 4, Korn Ferry has the second highest ROIC and NOPAT margin among publicly-traded peers listed in the company's most recent proxy statement, which include Robert Half International (RHI), Cushman & Wakefield (CWK), ManpowerGroup (MAN), FTI Consulting (FCN), and more. Figure 4: Korn Ferry's Profitability Vs. Peers: TTM Corporate Governance Aligns with Shareholders' Interests' Korn Ferry doesn't just advise clients how to build quality compensation and corporate governance, it applies those best practices to its own business as well. Specifically, Korn Ferry aligns its own executives' pay with ROIC, the performance metric that is directly correlated with creating true shareholder value. Korn Ferry outlines in its proxy statement that one of the most important metrics for its stockholders is 'the Company's ability to allocate and deploy capital effectively so that its return on invested capital exceeds the Company's cost of capital.' To ensure executives are held accountable to this key metric, Korn Ferry includes adjusted ROIC as one of four financial metrics used in determining executives' annual cash incentives. I think Korn Ferry could benefit further by removing some of the flawed metrics, such as adjusted EBITDA margin, from its compensation plan. However, as it stands, Korn Ferry's use of ROIC puts its executive compensation plan ahead of many others. Potential for 4.8% Yield Since fiscal 2020, Korn Ferry has paid over $240 million (7% of market cap) in cumulative dividends and has increased its quarterly dividends from $0.10/share in fiscal 1Q20 to $0.48/share in fiscal 4Q25. The company's current dividend, when annualized, provides a 2.6% yield. Korn Ferry also returns capital to shareholders through share repurchases. From fiscal 2020-2025, Korn Ferry repurchased $457 million of shares. During fiscal 2025 alone, the company repurchased $89 million of shares. The company has $94 million remaining under its current repurchase authorization. Should the company repurchase shares at its fiscal 2025 level in fiscal 2026, it would repurchase another $89 million of shares, which is 2.3% of the company's current market cap. When combined, the dividend and share repurchase yield could reach 4.9%. Strong Cash Flow Generation I believe Korn Ferry will be able to continue funding its dividends and share repurchases because of its large free cash flow (FCF) generation. From fiscal 2020 through fiscal 2025, Korn Ferry generated $1.1 billion in FCF, which equals 35% of the company's enterprise value. Over the same time, the company paid out $700 million in dividends and share purchases. Figure 5: Korn Ferry's Cumulative FCF: Fiscal 2020 – Fiscal 2025 Korn Ferry's repurchases have also meaningfully reduced its shares outstanding from 54.4 million in fiscal 2020 to 51.5 million in fiscal 2025. See Figure 6. Figure 6: Korn Ferry's Shares Outstanding: Fiscal 2020 – Fiscal 2025 Strong Balance Sheet to Weather Uncertainty In addition to strong profitability and cash flow generation, Korn Ferry also earns an Attractive overall Credit Rating. The company earns an Attractive-or-better rating in three of the five credit rating metrics. Even if economic conditions deteriorate, or the current economic downcycle persists longer than expected, the company's strong financial footing secures its operations for the foreseeable future. Figure 7: Korn Ferry's Credit Rating Details What's Not Working Tight Labor Market May Persist Longer Than Anticipated A tight labor market presents ongoing headwinds to recruitment services providers. Data from to the U.S. Bureau of Labor Statistics show that hiring, across nonfarm, private, and government roles, has been trending lower since the post covid surge in mid-2020. Slowed hiring means companies are less likely to need the services of recruitment service providers, such as Korn Ferry and its peers, as there are simply less roles to fill. However, Korn Ferry's focus on executive, C-suite, and roles with higher salaries provides some insulation to these trends, as these roles often require specialized experience and expertise that can be more difficult to find through general job postings. Case in point, Korn Ferry has grown its remaining fees under existing contracts from $1.5 billion in fiscal 4Q24 to $1.7 billion in fiscal 4Q25. Figure 8: Nonfarm, Private, and Government Hires: May 2010 – May 2025 The good news for investors is any potential downside to Korn Ferry's business is already priced into the current stock price, as I'll show below. Current Price Implies Limited Profit Growth At its current price of $74/share, KFY has a price-to-economic book value (PEBV) ratio of 1.0. This ratio means the market expects the company's profits to never grow again from fiscal 2025 levels. For context, Korn Ferry has grown NOPAT by 13% compounded annually since fiscal 1999 and 11% compounded annually since fiscal 2015. Below, I use my reverse discounted cash flow (DCF) model to analyze expectations for different stock price scenarios for KFY. In the first scenario, I quantify the expectations baked into the current price. If I assume: the stock would be worth $74/share today – equal to the current stock price. Shares Could Go 20%+ Higher at Consensus Growth Rates If I instead assume: the stock would be worth $89/share today – a 20% upside to the current price. In this scenario, Korn Ferry's NOPAT would grow 5% compounded annually through fiscal 2035, which is below its five-year CAGR of 6% and ten-year CAGR of 11%. Figure 9 compares Korn Ferry's historical NOPAT to the NOPAT implied in each of the above scenarios. Figure 9: Korn Ferry's Historical and Implied NOPAT: DCF Valuation Scenarios
