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

Aviva is set to buy vehicle replacement insurance business Optiom in a deal that will boost the FTSE 100 firm’s presence in the Canadian market.

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

The deal, which is expected to be completed 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 has continued to surpass expectations as the portal’s annual average revenue per advertiser (ARPA) is boosted by listings of new homes developments.

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

This is expected to drive revenue growth of between 8 per cent and 10 per cent.

The FTSE 100 has opened 0.2 per cent lower, with heavyweight energy and mining stocks leading declines, while cautious investors brace for a barrage of economic data throughout the week.

Heavyweight energy stocks are down 0.8 per cent, tracking a fall in crude oil prices, while industrial metal miners have lost 0.6 per cent.

Investors are now awaiting the UK mortgage data and the inflation prints across the eurozone and in the United States due later in the week.

Among individual stocks, Entain is down 2.2 per cent after Goldman Sachs downgraded the Ladbrokes-owner’s stock to Sell from Buy.

Drugmaker AstraZeneca has dipped 0.6 per cent after brokerage Jefferies lowered its price target on the stock.

Rightmove has jumped 5.3 per cent after UK’s largest property portal lifted its forecast for annual average revenue per advertiser.

Richard Hunter, head of markets at Interactive Investor:

‘With other global markets giving the UK little to go on, the main indices again showed few signs of life in opening exchanges. The premier index drifted lower, with an oil price which has drifted given OPEC uncertainty over the rearranged and upcoming meeting putting some pressure on the majors, with BP and Shell weaker.

‘Broker downgrades to index heavyweight AstraZeneca as well as Entain also weighed, although there was some unconvincing strength across a couple of the retailers, likely on the back of some early reports on Black Friday activity, while Rightmove spiked higher on improved guidance.

‘The FTSE100 is still keeping its head above water so far this year – just – although the 0.2% rise could evaporate very quickly.

‘The FTSE250 briefly ventured into positive territory at the open although buying interest was limited. The index remains down by 2% in the year to date after a relatively positive opening quarter.

‘However, as seen by a main index which has also been unconvincing of late, it is a recognised part of investment life that confidence is slow to build but quick to shatter.’

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

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

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

‘Revolution Beauty remains in negotiation on both these issues. There is no guarantee that agreements will be reached. Should agreements be reached, they would likely be treated as related party transactions and an appropriate announcement made at that time.’

The Apprentice star Lord Alan Sugar’s holding company fell into the red this year.

Amshold – the group through which Sugar holds his property investments – clocked a £29m loss for the year to June 30. This compared with a £15.2m pre-tax in 2022.

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

The acquisition of Optiom expands Aviva’s capital-light businesses, which make up over half of the group’s portfolio, and grows 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 highly 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 customers.’

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

It comes despite a slowdown in the UK housing market but Rightmove is benefiting from steady demand from homebuilders and agents looking for buyers and renters.

‘The majority of the (ARPA) growth has been driven by new homes developers, who have extended their usage of our Native Search Adverts and Advanced Development Listing products to sell their developments,’ the company said in a statement.

Rightmove said its overall 2023 outlook remained at least in line with its previous forecast, adding that both estate agent subscriptions and new homes development listings were stable in the last four months or so.

Wall Street bosses including Blackstone and Goldman Sachs have flown in to hear Rishi Sunak set out £29.5billion in new UK investments.

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