Balfour Beatty boss cashes in

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Two years ago, Balfour Beatty chief executive, Leo Quinn, told the Financial Times the UK was set to embark on “10 years of infrastructure growth”, fuelled by £650bn in proposed government investment in new rail links, nuclear power stations and upgrades for towns across the country as part of the Boris Johnson administration’s “levelling up” agenda.

Things don’t look quite as bright now, though. Later that year, after both Johnson and his successor Liz Truss were dethroned, chancellor Jeremy Hunt capped spending in cash terms as double-digit inflation raged and prime minister Rishi Sunak then pulled the plug on the northern leg of rail link HS2. The National Infrastructure Commission’s chair, John Armitt, warned last week that the country faces “a make-or-break time” for infrastructure investment, stating that a failure to speed up delivery over the next five years risked constraining economic growth. 

Intercity and intracity transport were seen as a key chokepoint, with Armitt saying that “more detail is needed on the scope, the cost, the benefits and the schedules” for projects like the Midland Rail Hub and Northern Powerhouse Rail that Sunak pledged to fund with money saved by abandoning the second phase of HS2. 

For contractors such as Balfour Beatty, the short-term prospects still look good. It is working on phase 1 of HS2, which has five to 10 more years to run. And there was nothing in its £16.5bn order book linked to HS2 that it needed to remove. 

Indeed, its share price has so far held up well, climbing by 48 per cent over the two-year period. Quinn, who was appointed as chief executive to lead a turnaround of the business almost a decade ago, has taken some of his chips off the table, cashing in more than £730,000-worth last week.

Fintel sellers make way for fresh buyers

Fintel, the Aim-listed provider of software products to financial intermediaries, has recently been back on the buyout trail.

The company had largely put acquisitions on hold following its 2019 purchase of Defaqto — a ratings site for financial products. The deal itself was not the issue, more the fact that prices in the sector rose to levels that proved “prohibitive to shareholder value creation”. 

It completed four deals last year, though, and has gone on to agree four more deals since the start of this year. This stake-building means Fintel has blown through its spare cash. From sitting on net cash of £12.8mn at the start of last year, it had £400,000 of net debt as of April 30. It still has plenty of firepower to do more deals, though — with £69mn of headroom available on an £80mn revolving credit line. It is also highly cash-generative — two-thirds of last year’s core revenue of £56.6mn came from customers who subscribe to its software packages. 

Investors also seem to like the deals it has done, with the company’s share price rising by 48 per cent over the past 12 months. Indeed, more buyers seem keen to get in on the action. Former chair Ken Davy sold more than 3mn shares at 300p on 10 May, earning over £9.3mn. Joint chief executives Neil Stevens and Matt Timmins also sold £913,500 and £630,000-worth of shares, respectively. 

The company said the sales “provide the liquidity required to satisfy the demand from both new and existing investors”. On the same day as Davy’s sale was announced, fund manager Octopus Investments declared it had taken a 3.64 per cent stake in Fintel.

The company also pointed out that the selling directors “retain substantial holdings” in the business, with Davy still owning 23.8 per cent of the shares, Timmins 3.57 per cent and Stevens 3.39 per cent.