The fall in the share price offers a significantly more attractive entry point if the long-term fundamental story remains intact. That will depend on the reputational damage to the firm and its ability to win new affinity partners outside the UK, but management’s quick and decisive action should help.
ANDY BROWN | PANMURE GORDON
This is not good news for the share price. The review is internally driven and remedial action is in place; we expect market sentiment to remain cautious for some time. We would also be concerned about the impact this has on its overseas potential, as questions may be asked by international regulators.
MARK FLEETWOOD | BREWIN DOLPHIN
We do not believe that the business model is broken and numerous attractions remain, although it is likely to take time to restore confidence and rebuild the rating. Whether the FSA will look to take any action also remains to be seen. This development could present an interesting buying opportunity.