BUSINESS LIVE: Rightmove ups guidance; Aviva buys Optiom; Revolution Beauty nears Minto settlement

Aviva plans to acquire vehicle replacement insurance company Optiom in a deal that will increase the FTSE 100 company’s presence in the Canadian market.

The insurance giant said the deal will be worth around £100 million and will expand its capital-light business, which accounts for more than half of its portfolio.

The deal, expected to close in the first quarter of next year, will boost Aviva Canada’s presence in the “profitable segment of the Canadian insurance market,” it added.

Rightmove’s revenue growth continues to exceed expectations as the portal’s annual average revenue per advertiser (ARPA) is boosted by new build listings.

The group said it now expects ARPA – a key metric for Rightmove – to be between £112 and £116 for the full year, up from its previous forecast of between £103 and £105.

This is expected to result in revenue growth of between 8 and 10 percent.

The FTSE 100 opened 0.2 percent lower, with heavyweight energy and mining shares leading the declines, as cautious investors brace for a barrage of economic data throughout the week.

Heavy energy stocks fell 0.8 percent, reflecting a decline in crude oil prices, while industrial metal miners lost 0.6 percent.

Investors are now waiting for UK mortgage data and inflation figures in the eurozone and the United States to be released later this week.

Among individual stocks, Entain is down 2.2 percent after Goldman Sachs downgraded the Ladbrokes owner’s shares from Buy to Sell.

Drug manufacturer AstraZeneca fell 0.6 percent after broker Jefferies lowered its price target for the share.

Rightmove is up 5.3 percent after Britain’s largest property portal increased its forecast for annual average revenue per advertiser.

Richard Hunter, head of markets at Interactive Investor:

‘With other global markets providing little guidance to Britain, the major indices again showed few signs of life as markets opened. The premier index fell, while oil prices fell due to OPEC’s uncertainty over the rescheduled and upcoming meeting putting some pressure on the majors, with BP and Shell weakening.

‘Broker downgrades to index heavyweights AstraZeneca and Entain also weighed, although there was some unconvincing strength across a number of retailers, likely due to some early reports of Black Friday activity, while Rightmove rose higher on improved guidance.

‘The FTSE100 has so far kept its head above water so far this year, although the 0.2% increase could evaporate very quickly.

‘The FTSE250 briefly entered positive territory during the open market, although buying interest was limited. The index remains 2% lower this year, after a relatively positive opening quarter.

“But as evidenced by a main index that has also proven unconvincing of late, it is a recognized part of investing life that builds trust slowly but breaks it down quickly.”

Revolution Beauty founder Adam Minto is in advanced talks to repay nearly £3 million to settle allegations that he breached his fiduciary duties to the company, according to reports Sky News.

Responding to what it called “press speculation,” the cosmetics group said: “As previously announced on June 20, 2023, the Group has announced possible legal proceedings against Mr. Minto regarding the events that led to a delay in the audit of the results of FY22 and the suspension of trading of the company’s shares on AIM.

‘Separately, and as previously announced on August 31, 2023, the Board of Directors is negotiating with Tom Allsworth, Medichem’s previous owner, to reach a revised agreement on the terms of the acquisition.

“Revolution Beauty remains in negotiations on both issues. There is no guarantee that agreements will be made. If agreements were reached, they would likely be treated as related party transactions and an appropriate announcement would be made at that time.”

The holding company of Apprentice star Lord Alan Sugar ended up in the red this year.

Amshold – the group through which Sugar manages its property investments – posted a loss of £29 million for the year to June 30. This compares with a £15.2 million pre-tax in 2022.

Aviva has agreed to acquire Canadian car replacement insurance group Optiom from Novacap and other minority shareholders for around £100 million.

The acquisition of Optiom expands Aviva’s low-capital operations, which make up more than half of the group’s portfolio, and increases Aviva Canada’s presence in a profitable segment of the country’s insurance market.

CEO of Aviva Canada Tracy Garrad said:

“The acquisition strengthens our offering and distribution capabilities in a very attractive segment of the Canadian insurance market.

“We know Optiom well through our existing relationship and are excited about what we can do together to better serve our brokers and clients.”

Rightmove has raised full-year revenue growth expectations as the property portal’s average revenue per advertiser continues to perform above expectations, thanks to increased listings.

This is despite a slowdown in the UK housing market, but Rightmove is benefiting from steady demand from housebuilders and agents looking for buyers and tenants.

“The majority of the (ARPA) growth has been driven by new home developers, who have expanded their use of our Native Search Listings and Advanced Development Listing products to sell their developments,” the company said in a statement.

Rightmove said the overall outlook for 2023 remained at least in line with its previous forecast, adding that both agent subscriptions and new-build home offers were stable over the past four months.

Wall Street bosses including Blackstone and Goldman Sachs have flown in to hear Rishi Sunak outline £29.5bn of new UK investment.

Last night the Prime Minister said some of the world’s top bosses have committed billions to new UK projects ahead of today’s Global Investment Summit.