LONDON, Aug 10 (Reuters Breakingviews) - Aviva (AV.L) is finally firing on all cylinders. The near 13 billion pound UK general and life insurer boosted operating profit by 14% in the six months ending June 30 versus the same period last year, thanks in part to a pivot to higher value commercial insurance and a pull back from motor. Chief Executive Amanda Blanc, who has sold off assets and returned capital to shareholders, is now pledging a buyback. The company’s shares rose 9%.

Aviva’s valuation, however, is not factoring in these gains. After Wednesday’s share bounce, the insurer is valued on nine times its forward earnings. Its peers are valued on 13 times, according to data from Refinitiv. The fact Aviva operates in mature markets like Canada, the UK and Ireland doesn’t help. And rising inflation may scupper Blanc’s chances of slashing 750 million pounds worth of costs by 2024. The bigger issue, probably, is Aviva’s clunky model of combining general and life insurance,...

LONDON, Aug 10 (Reuters Breakingviews) - Whoever picks up Ferrovial’s (FER.MC) Heathrow baggage will need a thick skin. The Spanish infrastructure operator is considering a sale of its 25% stake in the UK’s biggest airport, according to Reuters. Potential buyers include private equity group Ardian and Saudi Arabia’s Public Investment Fund. With relations with airlines and the regulator at a low ebb, and irate passengers and mountains of suitcases clogging up its arrivals halls, it’s easy to see why the 20 billion euro Madrid-listed firm wants out. That may be reflected in the price.

At 13.4 times this year’s forecast EBITDA, the average trading multiple of listed airport operators Aena (AENA.MC) and Aeroports de Paris (ADP.PA), Heathrow as a business is worth just under 23 billion euros. But after deducting its net debt pile, the equity comes to just 5 billion euros, suggesting Ferrovial might expect 1.2 billion euros from any buyer. Given Heathrow’s never-ending...

Posted

Gautam Adani, the world’s fourth-richest man, is using his $220 bln empire to amass critical energy and infrastructure assets. Financial profligacy broke many of his Indian rivals. Opacity is a bigger concern for the billionaire becoming too big to fail, says Una Galani.

LONDON, Aug 10 (Reuters Breakingviews) - Aviva (AV.L) is finally firing on all cylinders. The near 13 billion pound UK general and life insurer boosted operating profit by 14% in the six months ending June 30 versus the same period last year, thanks in part to a pivot to higher value commercial insurance and a pull back from motor. Chief Executive Amanda Blanc, who has sold off assets and returned capital to shareholders, is now pledging a buyback. The company’s shares rose 9%.

Aviva’s valuation, however, is not factoring in these gains. After Wednesday’s share bounce, the insurer is valued on nine times its forward earnings. Its peers are valued on 13 times, according to data from Refinitiv. The fact Aviva operates in mature markets like Canada, the UK and Ireland doesn’t help. And rising inflation may scupper Blanc’s chances of slashing 750 million pounds worth of costs by 2024. The bigger issue, probably, is Aviva’s clunky model of combining general and life insurance,...

HONG KONG, Aug 10 (Reuters Breakingviews) - ByteDance can't seem to quit its unhealthy acquisition habit, and it’s not alone. The TikTok-owner has taken over a high-class women's hospital chain for $1.5 billion, Bloomberg reports. Peers like Alibaba (9988.HK) and Tencent (0700.HK) have made similar forays into healthcare, with underwhelming results. Amid falling valuations and Beijing's sustained pressure on technology companies, this relapse into off-piste dealmaking looks even more ill-advised.

The video-app owner's unlikely target is Beijing-based Amcare Healthcare, which specialises in fertility, obstetrics, gynaecology and paediatrics. Catering to mothers is politically savvy in one respect: China's plummeting birthrate is a rising concern among policymakers. The country's 1.4 billion population may start shrinking next year, per a July United Nations report.

But the sight of a viral app specialist buying a hospital chain raises eyebrows nevertheless. Bytedance...

LONDON, Aug 10 (Reuters Breakingviews) - Sugar is a quick fix to balancing salt and sour. Food delivery companies are similarly looking for ways to square their need for more customers with their investors’ need for profits. The secret ingredient could be selling their delivery technology as a service to retailers.

DoorDash (DASH.N), Uber Technologies (UBER.N) and Grubhub owner Just Eat Takeaway (TKWY.AS) are rapidly adjusting to the post-pandemic reality: fewer new customers are ordering takeaways, just as investors get hungrier for profits. Matching the rapid expansion of the last two years was always going to be a tall order. In the three months to June, revenue growth at $28 billion DoorDash, led by Tony Xu, was 30% year-on-year against 83% for the same period last year. Its gross profit margin shrank to 43% from 53% a year ago.

Reining in spending on marketing or hiring is a step towards profitability. Finding new sources of revenue, for instance by letting...

LONDON, Aug 10 (Reuters Breakingviews) - Whoever picks up Ferrovial’s (FER.MC) Heathrow baggage will need a thick skin. The Spanish infrastructure operator is considering a sale of its 25% stake in the UK’s biggest airport, according to Reuters. Potential buyers include private equity group Ardian and Saudi Arabia’s Public Investment Fund. With relations with airlines and the regulator at a low ebb, and irate passengers and mountains of suitcases clogging up its arrivals halls, it’s easy to see why the 20 billion euro Madrid-listed firm wants out. That may be reflected in the price.

At 13.4 times this year’s forecast EBITDA, the average trading multiple of listed airport operators Aena (AENA.MC) and Aeroports de Paris (ADP.PA), Heathrow as a business is worth just under 23 billion euros. But after deducting its net debt pile, the equity comes to just 5 billion euros, suggesting Ferrovial might expect 1.2 billion euros from any buyer. Given Heathrow’s never-ending...

Posted

Gautam Adani, the world’s fourth-richest man, is using his $220 bln empire to amass critical energy and infrastructure assets. Financial profligacy broke many of his Indian rivals. Opacity is a bigger concern for the billionaire becoming too big to fail, says Una Galani.

LONDON, Aug 10 (Reuters Breakingviews) - Sugar is a quick fix to balancing salt and sour. Food delivery companies are similarly looking for ways to square their need for more customers with their investors’ need for profits. The secret ingredient could be selling their delivery technology as a service to retailers.

DoorDash (DASH.N), Uber Technologies (UBER.N) and Grubhub owner Just Eat Takeaway (TKWY.AS) are rapidly adjusting to the post-pandemic reality: fewer new customers are ordering takeaways, just as investors get hungrier for profits. Matching the rapid expansion of the last two years was always going to be a tall order. In the three months to June, revenue growth at $28 billion DoorDash, led by Tony Xu, was 30% year-on-year against 83% for the same period last year. Its gross profit margin shrank to 43% from 53% a year ago.

Reining in spending on marketing or hiring is a step towards profitability. Finding new sources of revenue, for instance by letting...

Posted

Gautam Adani, the world’s fourth-richest man, is using his $220 bln empire to amass critical energy and infrastructure assets. Financial profligacy broke many of his Indian rivals. Opacity is a bigger concern for the billionaire becoming too big to fail, says Una Galani.

MUMBAI, Aug 9 (Reuters Breakingviews) - Gautam Adani is a different sort of Indian tycoon. The 60-year-old university dropout and son of a trader is a first-generation entrepreneur who has become the world’s fourth-richest man by building and buying critical energy and infrastructure assets at lightning speed. There is none of the obvious financial profligacy that broke many of his rivals in recent years, but other concerns cast a shadow over the billionaire who is starting to get too big to fail.

At some $220 billion, the combined market value of the Adani group’s seven publicly traded companies, all of which carry the industrialist’s name, has increased tenfold in three years. Gautam Adani leads as chairman and is flanked by his wife, brother, two sons and some nephews in various roles. The family’s power rests with large equity stakes of up to 75%, including in the flagship Adani Enterprises (ADEL.NS) which houses data centres, roads and airports and incubates new...

HONG KONG, Aug 10 (Reuters Breakingviews) - ByteDance can't seem to quit its unhealthy acquisition habit, and it’s not alone. The TikTok-owner has taken over a high-class women's hospital chain for $1.5 billion, Bloomberg reports. Peers like Alibaba (9988.HK) and Tencent (0700.HK) have made similar forays into healthcare, with underwhelming results. Amid falling valuations and Beijing's sustained pressure on technology companies, this relapse into off-piste dealmaking looks even more ill-advised.

The video-app owner's unlikely target is Beijing-based Amcare Healthcare, which specialises in fertility, obstetrics, gynaecology and paediatrics. Catering to mothers is politically savvy in one respect: China's plummeting birthrate is a rising concern among policymakers. The country's 1.4 billion population may start shrinking next year, per a July United Nations report.

But the sight of a viral app specialist buying a hospital chain raises eyebrows nevertheless. Bytedance...