Link tumbles to big loss on UK strife

Link listed on the ASX in 2015 with an issue price of $6.37, but its shares have since lost two thirds of their value. The stock made small gains on Friday to hover around $2.20.

It foreshadowed that its in-specie distribution to shareholders from its stake in electronic conveyancing group PEXA, which occurred in early January, would result in a one-off gain of $322 million in the full-year results.

The UK business, Link Fund Solutions (LFS), has been a nightmare for the company following the high-profile collapse of the $6 billion Woodford investment fund in 2019. Link announced on February 20 it was in exclusive talks with Irish company Waystone Group to buy that business.

A second leg to Link’s UK troubles is also coming to an end with the company in “advanced discussions” with the Financial Conduct Authority (FCA), to settle an investigation over the conduct of LFS in the collapse of the Woodford investment fund.

Link booked an impairment charge of $449 million on LFS, and said it would likely receive no net proceeds from the sale of the business to Waystone.

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Link said in October it was looking to sell the UK business whose liabilities of as much as $600 million from the collapse of the fund prompted Canadian group Dye & Durham to pull its $2.5 billion takeover offer for Link in late September.

The Woodford fund, which had been run by star stockpicker Neil Woodford, had £3.7 billion ($6 billion) in funds, but collapsed after a flood of redemption requests.

Investors scrambled to exit as the value of the fund plunged amid allegations that some investments were too risky and illiquid. LFS froze the Woodford Equity Income Fund on June 3, 2019.

Mr Woodford, once referred to as the “Oracle of Oxford” after a 25-year career as a fund manager with Invesco Perpetual, had a big following among retail investors when he went out on his own in 2014.