The €2.5m purchase of KK Media, a German seller of phone contracts, is not going to set the world alight, but it does at least show that Casey has confidence in the business.
Christmas tends to be a crucial time for anybody in the mobile phone trade, and the company really needs to hit its numbers for the season. Given its two profit warnings in a short public life, Getmobile cannot afford any more slips.
Acquiring a business so close to peak buying seasons can be inspired, or risky, depending on performance. The stock is still way off its flotation price; any little leg-up for holders will be appreciated.
Lending lurch
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THE UK mortgage market has always been cut-throat, but last week provided fresh signs of just how bloody it could get for the smaller specialist lenders.
In the mid-to-late 1990s specialist firms such as Kensington Group largely had the so-called sub-prime market — lending to people with patchy credit records — to themselves. The big and ugly mortgage players steered clear.
Unsurprisingly, the specialists made hay. Margins were fat and profits were juicy. While margins on mainstream mortgages can be wafer thin at 1%, the returns on sub-prime are double if not treble this. So, it was inevitable that the big boys would look to muscle in — HBOS and Nationwide, a building society, are now sub-prime players. But the more striking trend has been the emergence of the investment banks. Merrill Lynch and Lehman Brothers have been expanding aggressively in the sector. All this means that the market is becoming more about scale than nimble specialists.
Shares in Kensington, which is a good company and has a strong track record of handling riskier lending, dived by 15.5% in three days last week after it warned that competition meant profits would be at the lower end of the City’s forecasts. It may be past its prime.