MARKET REPORT: Virgin Money shares soar 7% as another 400 staff face the axe in ruthless cost-cutting drive
Shares in Virgin Money rose by nearly 7 per cent yesterday as the High Street lender pressed ahead with ruthless cost savings, including a reduction of hundreds of jobs.
Following its merger with Clydesdale and Yorkshire Bank in 2018, Virgin had said that it planned to get rid of 16 per cent of full-time roles.
That equated at the time to roughly 1,500 of 9,500 jobs, with the bank cutting more than 600 since then.
Cost savings: Following its merger with Clydesdale and Yorkshire Bank in 2018, Virgin had said that it planned to get rid of 16 per cent of full-time roles
And yesterday the lender said it was moving ahead with the latest round of cuts, which could see another 400 jobs cut.
Bosses said the move would make the bank ‘fit for the future’, with even more job losses expected further down the line.
Virgin said: ‘The group aims to deliver a significantly more efficient and sustainable business and has a programme to reduce operating costs, which includes a reduction in headcount.
‘These changes are designed to simplify structures, reduce duplication and clarify accountabilities.’
Stock Watch – Oncimmune
Oncimmune yesterday won funding from the Government to develop a ‘comprehensive diagnostic tool’ for Covid-19, to predict how patients respond to the virus and the effectiveness of vaccines and treatment.
Chief executive Dr Adam Hill said it will also help pharmaceutical companies develop medicines and a vaccine.
Business Secretary Alok Sharma, said it ‘will ensure the best therapeutic approaches can be offered’. Shares rose 6.2 per cent, or 9p, to 153.5p.
The lender axed 300 jobs in September last year and 300 in July, and shut 52 branches.
Firms across the UK financial sector have ramped up cost-cutting in recent weeks, with rival lender TSB – part of Spain’s Sabadell – also shutting 164 branches and laying off 900 roles.
Banking giant HSBC and insurer LV are making deep cuts as well.
After the announcement, Virgin’s shares rose 6.8 per cent, or 5.16p, to 80.86p.
It came as the FTSE 100 was virtually flat, up 7 points to 5949.94, with investors seemingly spooked by warnings that the EU was preparing to take a harder line in Brexit talks.
That also sent the pound falling against the dollar, with sterling down by 0.5 per cent at one stage.
There was a bit more cheer surrounding house builders, however, after a closely-watched survey revealed a sharp rise in construction activity last month.
From August to September the Construction Purchasing Managers’ Index (PMI) ticked up from 54.6 to 56.8, according to data firm IHS Markit.
Anything above 50 indicates growth, with respondents saying new orders had risen for the fourth month in a row after coronavirus restrictions were eased.
The positive news sent shares in UK house builders on the rise, with Persimmon up 2.6 per cent, or 68p, to 2665p. Barratt Developments rose too, by 2.7 per cent, or 14p, to 525.4p, and Taylor Wimpey climbed by 2.9 per cent, or 3.2p, to 114p.
Elsewhere, the FTSE 250 index of mid-sized firms rose by 1.2 per cent, or 214.35 points, to 17,797.44. Watches of Switzerland soared after it reported bumper sales since lockdown was lifted.
Britain’s biggest retailer of Rolex, Cartier and Omega watches, said revenues jumped by a fifth in the ten weeks to October 4, with a 50 per cent sales rise online.
UK shoppers more than made up for the collapse in international tourists. Airport business now accounts for 9.2 per cent of sales – down from a third a year ago. Shares rose 25.9 per cent, or 86.5p, to 420p.
Inspiration Healthcare Group was cheered by investors for declaring its first dividend.
The move came after the company, which has been supplying ventilators to the NHS during the Covid-19 crisis, said revenues had jumped from £8.1million to £14.2million in the six months to July 31.
Its profits also rose from £483,000 to £1.1million during the period.
Inspiration declared an initial divi of 0.2p per share – worth £136,000 overall – for the first half, payable on December 29. Shares climbed by 4 per cent, or 2.5p, to 64.5p.