Investment Column: Halifax brand name gives it that extra appeal
Wednesday 28 July 1999
Having handed back pounds 2.25bn to shareholders in the last 18 months - more than any other company in the world - chief executive Jim Crosby has at last decided to focus on the business.
Halifax's traditional mortgage and savings business is becoming increasingly competitive. In the first half of the year, group margins on both loans and savings narrowed, if less so than at Halifax's peers. As market leader, Halifax has the most to lose to Johnny-come-lately lenders. The worry is that borrowers are getting their calculators out to work out the best deals, instead of going blindly to established brands.
But Halifax's key asset differentiating it from its rivals is its brand. The proof of its strength is Halifax's scooping of one-third of all cash ISA balances. Now it is seeking to apply its strength in other retail financial activities, such as long-term savings. Recently established businesses now account for 35 per cent of group profits, up from 29 per cent last year. Meanwhile, it is being aggressive on costs, which should grow by less than 1 per cent this year.
Lehman Brothers expects full-year pre-tax profits of pounds 1.74bn and earnings of 51.3p this year, putting Halifax on a forward price-earnings ratio of 14. That's in line with the sector. But Halifax, with its brand's strength, should really command a premium.
The shares fell 13p yesterday to 698p, largely because of heavy buying the previous day in anticipation of good results. At less than 700p, Halifax is the choice play in an oversold sector. Buy.
- 1 Rihanna 'nude photos' claims emerge on 4Chan as hacking scandal continues
- 2 Frank Lampard equalises for Manchester City against Chelsea: how Twitter reacted
- 3 Stamford Hill council removes 'unacceptable' posters telling women which side of the road to walk down
- 4 Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
- 5 Hitler’s former food taster reveals the horrors of the Wolf’s Lair
350 skinny dippers brave Northumberland seas for record attempt at mass naked swim
Rihanna 'nude photos' claims emerge on 4Chan as hacking scandal continues
Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
Jennifer Lawrence leaked 4Chan sex video branded 'fake' by forum users
Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Scottish independence referendum: A nation divided against itself
Scotland could still declare independence – even without referendum, says Alex Salmond
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
Plebgate MP Andrew Mitchell called officer a 'little s**t', claim court documents 'exposing ex-Chief Whip's 'record of abusing police'
iJobs Money & Business
Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...
£80 - 100k + Bonus: Guru Careers: A COO / Chief Operating Officer is needed to...
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...