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?
Image source: Getty Images
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.
