SoftBank Group unveils stock split, rakes in higher-than-expected profit on tech bets

Aided by the soaring valuations of its tech investments, SoftBank’s operating profit for the year jumped 80.5 percent to 2.4 trillion yen. Above, a Softbank advertisement in Tokyo. (AP Photo)
Updated 09 May 2019

SoftBank Group unveils stock split, rakes in higher-than-expected profit on tech bets

  • The news comes at a time when SoftBank and its almost $100 billion Vision Fund stand at a possible inflection point with some of its big tech bets
  • The group is also considering listing the Saudi-backed Vision Fund, which has invested roughly $80 billion in around 80 tech firms

DUBAI: Japanese conglomerate SoftBank Group Corp. announced a stock split while keeping the per-share dividend unchanged for the year, effectively doubling its shareholder payout, as it also reported a better-than-expected annual profit.
The news comes at a time when SoftBank and its almost $100 billion Vision Fund stand at a possible inflection point with some of its big tech bets such as Uber Technologies heading to trading markets, in what investors and industry experts see as a test of SoftBank’s strategy.
The group is also considering listing the Saudi-backed Vision Fund, which has invested roughly $80 billion in around 80 tech firms, a source told Reuters last week.
A second Vision Fund will be announced soon, SoftBank Group founder and CEO Masayoshi Son said at a news conference on Thursday, adding it would be similar in size to the first fund with SoftBank likely to be the only investor initially.
The value of Vision Fund’s investments in 69 companies had risen to $72.3 billion by end-March, from their $60.1 billion acquisition cost, driven by gains at companies like Uber and Indian hotels startup OYO, SoftBank said on Thursday.
The fund’s stake in Uber, which debuts on Friday, grew 418 billion yen in value, while its share in OYO added 154 billion yen in value. Overall, the fair value rose for 29 firms and fell for 12 over the period, SoftBank said, with the rest unchanged.The value of its stake in Guardant Health, a Vision Fund portfolio company listed last year, grew 203 billion yen.
Aided by the soaring valuations of its tech investments, SoftBank Group’s operating profit for the year ended March jumped 80.5 percent to 2.4 trillion yen ($22 billion).
That was above a 2.1 trillion yen SmartEstimate that gives a greater weighting to top-rated analysts, Refinitiv data shows.
The tech and telecoms group said its common stock will be split at a two-for-one ratio on June 27, while its dividend will remain unchanged at 44 yen per share.
SoftBank’s transition away from telecoms toward tech investments accelerated with the 2.35 trillion yen listing of a third of its domestic telco SoftBank Corp. in December in what is Japan’s largest-ever initial public offering.
That provided the funds for a share buyback that has helped drive up SoftBank Group’s stock by nearly 60 percent this year. The shares closed up 0.7 percent ahead of the earnings.


London finance chief: Don’t be mislead by Brexit jobs trickle

Updated 4 min 7 sec ago

London finance chief: Don’t be mislead by Brexit jobs trickle

  • The city’s policy leader warned that heavy job losses to Europe are expected

LONDON: Britain’s vast financial services industry will lose more jobs to Europe over the coming years because of Brexit, the City of London’s policy chief told Reuters, warning people not to be duped by the low number of job moves to the continent so far.

The City of London, home to global foreign exchange, bonds and fund management operations and to more banks than any other financial center, faces upheaval as firms decide whether to shift jobs to continental Europe to keep serving customers there after Britain is scheduled to leave the EU in two weeks.

Catherine McGuinness, the political leader of the financial district’s municipal body, warned that the country’s biggest export sector and biggest source of corporate tax has no “God given right” to global pre-eminence in finance.

“The announced job moves at the moment are fairly low. We would expect those to go up,” McGuinness said in an interview in a room off the local government’s seat of power in the medieval Guildhall. “It’s not the end of the story. This is a moment of high risk for the City.”

Since Britain voted to leave the EU three years ago, London’s financial services industry has been jolted by the prospect of ending four decades of regulatory integration and losing access to the bloc in one fell swoop later this year.

McGuinness said business leaders have been frustrated by more three years of uncertainty and worries about some of the political momentum behind leaving with no deal.

“We need the government to stop messing about and get on with sorting out our long-term future on the basis that will allow us to strike up a harmonious relationship with our EU partners going forward,” she said.

Britain and the EU meet at a summit in Brussels on Thursday in a bid to agree a divorce settlement, otherwise Britain faces asking for an extension, or a disorderly no-deal departure.

“A disorderly Brexit would be a bad thing, and I don’t think anyone views an extension with enthusiasm. We don’t want to see cans kicked down the road,” McGuinness said.

But given that global banks have no loyalty to anyone, she urged the government to help the City continue recruiting from international talent, build adequate housing and transport, and keep banks competitive after the US cut taxes.

When asked whether she would rather Britain to leave the EU without a deal or a socialist government led by the opposition leader Jeremy Corbyn, McGuinness said it was a hard question to answer.

“A destructive exit would be a very bad thing,” she said. “A government of whatever complexion that did just look at the whole needs of the whole economy would be the better solution.”