Ferguson and St Ives / Kin and Carta

“Just as one market issue gets solved, with progress towards a new trade deal between the US, Mexico and Canada, so President Trump reopens old wounds with China and the EU. This led to weakness in Asian markets overnight and, combined with ongoing ructions over Italy, means the FTSE 100 is falling despite a weaker pound. “The negative correlation between sterling and the FTSE has been much in evidence in recent years, particularly in the wake of the Brexit vote in June 2016, and it recently helped the index to its best level in a month. “A lower pound helps increase the relative value of overseas earnings which account for around 70% of the total generated by FTSE 100 constituents,” says AJ Bell Investment Director Russ Mould.

Ferguson

“The plumbing and heating products business formerly known as Wolseley continues to make positive steps in the US, its core market. Full year results are ahead of expectations, shareholders are getting a very generous hike in the dividend and the balance sheet looks fairly strong.

“So why has the share price fallen on the news? A slowdown in trading in September versus August is certainly to blame, so too comments about the UK being a tough market.

“One month is far too short a period to start worrying about something wrong in the business and the UK accounts for a mere 5% of group profit. Yes, US construction sector momentum has been slowing of late, but Ferguson’s chief executive John Martin says his business continues to do well and, importantly, gain market share.

“Ferguson would be better off selling its UK operations so management can focus on North America without any distractions. It has already sold its Nordics business and is in the process of selling its Central European operations, so a UK disposal would be the natural next step.”

St Ives / Kin and Carta

“What was St Ives thinking when it decided to be called Kin and Carta?

“There are normally four reasons as to why a company would change its name. The first is when it has made a big acquisition which subsequently accounts for the bulk of the enlarged group’s earnings, so it makes sense to adopt their name.

“The second is when management are trying to sweep aside a colourful history and negative association with their brand name.

“The third is when the nature of the business has changed so much that the brand is linked with a business activity no longer being pursued.

“The fourth is when a new chief executive wants to shake things up and modernise the business.

“St Ives certainly falls into the latter two categories with its name change to Kin and Carta. Most people associate the St Ives name with printing activities; the company has disposed of its legacy print operations and is now focused on marketing services. Therefore a name change seems acceptable. “Unfortunately the choice of new name is somewhat questionable, leaving it a laughing stock on social media with investors cackling at the company and its reasoning.

“Recently-appointed CEO J Schwan says Kin and Carta means family and map – connecting clients and helping them navigate the digital world, while ‘plotting a clear path to growth for our people and our shareholders’. This is incredibly cringeworthy and something you would expect from a naff TV show about the world of business.

“It’s not the best start, credibility-wise, for the new CEO given that shareholders are still nursing the bruises of numerous profit warnings over the past few years.”

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