Insights

Why is the Virgin Money UK (ASX:VUK) share price down 11% today?

Virgin Money shares are falling off a cliff today. We take a closer look
The post Why is the Virgin Money UK (ASX:VUK) share price down 11% today? appeared first on The Motley Fool Australia. –

The S&P/ASX 200 Index (ASX: XJO) is well on the way to ending the week on a strong note. The ASX 200 is presently up a healthy 0.54% to 7,467 points. But one ASX 200 share isn’t joining the party this Friday. That would be the Virgin Money UK (ASX: VUK) share price.

Virgin Money UK shares are, at the time of writing, down a nasty 11.27% to $3.15 a share. That puts this quasi-ASX bank at an 8-month share price low, seeing as the company was last at these levels way back in February.

So what’s gone so wrong for Virgin Money today?

Virgin Money UK share price slumps on FY21 update

Well, this steep share price drop seems to be the result of a trading update the bank released yesterday evening after the market closed.

This update provided some guidance on what Virgin Money expects the company to deliver for its FY21 earnings results.

Virgin Money told investors that its statutory profit before tax is expected to be 417 million British pounds. Underlying profits before tax are expected to grow to 801 million pounds, up 546% from the 124 million pounds of the previous period. the company says this improvement is due to “strong financial momentum and improved macro outlook”.

Meanwhile, the bank’s income grew by 2% to 1.57 billion pounds, mainly helped by higher net interest income.

Virgin Money UK also announced a 1 pence per share dividend (final amount to be determined for the ASX shares) for investors, subject to the finalisation of FY21’s results, as well as shareholder approval.

Here’s some of what management had to say of these numbers:

Our strategy has continued to deliver improved financial momentum throughout the year, with support from an improved economic backdrop. Underlying profit is expected to be stronger at [801 million pounds, against 2020’s 124 million pounds] and the Group expects to return to statutory profit in FY21, delivering [417 million pounds] of PBT [profits before tax].

So why are Virgin Money UK shares falling so much today? Perhaps the most likely explanation is that investors were expecting more. Especially seeing that the United Kingdom relaxed most of their COVID-related restrictions back in June.

At the current Virgin Money UK share price, this bank has a market capitalisation of $5.11 billion.

The post Why is the Virgin Money UK (ASX:VUK) share price down 11% today? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Virgin Money UK right now?

Before you consider Virgin Money UK, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Virgin Money UK wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Here are the top 10 ASX shares today

Here are the 3 most heavily traded ASX 200 shares this Friday

Why Afterpay, Clinuvel, Inghams, and Virgin Money UK shares are tumbling

Which tech shares are dragging down the ASX 200 on Friday?

ASX 200 (ASX:XJO) midday update: REA and News Corp impress, Link receives takeover offer

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!