How to deal with the “Claude crash”: Relx should keep buying back shares, then buy more | Nils Pratley
As the FTSE 100 index bobs along close to all-time highs, it is easy to miss the quiet share price crash in one corner of the market,It’s got a name – the “Claude crash”, referencing the plug-in legal products added by the AI firm Anthropic to its Claude Cowork office assistant,This launch, or so you would think from the panicked stock market reaction in the past few weeks, marks the moment when the AI revolution rips chunks out of some of the UK’s biggest public companies – those in the dull but successful “data” game, including Relx, the London Stock Exchange Group, Experian, Sage and Informa,Relx, the former Reed Elsevier, whose brands include the Lancet and LexisNexis, is the most intriguing in that list,The company’s description of itself contains at least five words to provoke a yawn – “a global provider of information-based analytics and decision tools for professional and business customers” – but the pre-Claude share price was a thing of wonder.
It was £5 in 2012 and £41 in May last year, at which point Relx was worth £70bn-ish and was the fifth-largest company in the FTSE 100 index.And now? The shares have halved from their highs and the biggest falls have come since Claude’s supposedly terror-inducing plug-ins appeared.The market has flipped from seeing Relx as an AI winner – because it is using AI to boost existing products – to fearing its beautiful 34% profit margin will implode.What does the company itself think? Well, Thursday’s full-year results were not titled “the stock market’s gone mad”, because that’s not Relx’s style.But the numbers and statement oozed confidence: revenues up 7% to £9.
6bn and operating profits up 9% to £3.3bn; a forecast of “another year of strong growth in 2026”; a dividend raised 7%; and a bigger share buyback of £2.25bn.Chief executive Erik Engström also offered a coherent argument for why the evolution of AI would “remain a key driver of customer value and growth in our business for many years to come”.Short version: AI tools are not new; the recent launches that have caused the fuss are “workflow” products for storing, sorting and reviewing documents for specific projects; Relx mostly fishes in the smaller market for must-have information that is comprehensive and can be relied upon in court.
Some of Relx’s data may be public, some may have been public in the past but no longer is so; some is hard to find; some is licensed; some is proprietary; it all comes with “judgments, inferences and interpretations gathered over decades” that are useful to scientists, lawyers, insurance and City professionals and risk assessors; and AI may assist in that value-adding process, or just make the stuff easier for customers to use,His other big point is that Relx is free to do limited licensing deals with AI companies if it wishes, and can continue to launch its own “workflow” products, but it is never going to surrender its impossible-to-replicate proprietary information because that’s where the value in its business lies,It was good for a 2% bounce in the share price, which is better than nothing, but still suggests market worries about where the AI evolution goes next, and whether Relx’s “competitive moat”, as the analysts say, is as deep as advertised,The issue, in part, is fear of the unknown,But Relx’s tactical response should be obvious.
If it thinks growth can be relied upon “for many years to come”, as Engström says, and, if the shares are available at half the price of a year ago, just keep the buybacks rolling.This year’s £2.25bn version, up from £1.5bn, equates to 6% of the entire equity base.If it keeps up that pace for a few years, it will get a serious boost to earnings per share – assuming, of course, that the projections for the business itself really are solid.
Bigger buybacks, reportedly, are also the activist investor Elliott Management’s prescription at LSEG, where the AI worries and counter-arguments are similar.If you are truly confident, it is the right thing to do.
Cocktails and crepes in bed? Ravinder Bhogal’s recipes for Valentine’s Day breakfast
Give me breakfast in bed over a bunch of limp supermarket roses any day. Nothing says “I love you” more genuinely than a decadent tray of delicious things to savour between the sheets. Because V-Day falls on a weekend this year, you can do better than just buttered toast and an unbidden cup of tea. Whether it’s sweet or savoury (or even a cheeky cocktail), I’ve got you!These French crepes are given the Midas touch with a pinch of saffron. Use your favourite fish – mackerel and salmon also work well here
‘Boy kibble’: why are young men turning to dog food for meal inspiration?
The dried food, traditionally for pets, has become an unlikely influence for meal preppers. Some commenters have even claimed the trend could be an antidote to toxic masculinity Name: Boy kibble.Age: It’s new.Appearance: Like a dog’s dinner.Isn’t that what kibble is? Traditionally, yes, kibble is dried food for pets in pellet form, made of grains, vegetables and meat
Frothing over: the coffee foams and ‘indulgent’ drinks keeping Australian cafes afloat
Cold brews and matcha lattes with airy, dessert-like layers are everywhere. What’s driving the trend for blockbuster toppings?Get our weekend culture and lifestyle emailCoffee brimming with lemon myrtle cream. Matcha banked with strawberry-lychee foam. Cold brew with choc-orange froth thick enough to stuff a pillow. Every caffeinated drink I’ve ordered in Sydney recently has the appearance of a generously frosted cake
What is fibremaxxing – and how much is too much? | Kitchen aide
Why is everyone talking about fibremaxxing?Chris, by emailTikTok-born trends rarely go hand in hand with sage health advice, but that’s not to say upping our fibre – an often-forgotten part of our diets – is a bad idea. “Fibre needed its moment, so this is a good thing,” says dietitian Priya Tew. The non-digestible carbohydrate has two main functions: “There’s insoluble fibre, which is found in things such as whole grains, brown rice or vegetable skins, and I think about it like a broom,” Tew says, “in that it brushes the system out.” Then there’s soluble fibre (oats, beans, lentils), which she likens to a sponge: “It turns into this gel in your gut, and aids digestion and keeps us regular.” But that’s only part of the story, because fibre can also help lower cholesterol and stabilise blood sugar
Moroccan lamb filo pie and rhubarb panna cotta: Thomasina Miers’ Sunday best recipes
There is little as pleasing to cook in the depths of the winter as a pot of enticingly fragrant, slow-braised meat. A shoulder of lamb is one of my favourite cuts; you, or a friendly butcher, will need to trim away its excess fat, a job that will reward you with an exquisite flavour that marries beautifully with bold spicing. Here, we travel to Morocco, with sweetly aromatic ginger, turmeric and cinnamon, and follow that with cardamom, cream and rhubarb for pudding. A sumptuous, colourful feast to stave off any February blues.Many elements of this dish, with its falling apart, richly seasoned lamb and carrots encased in crisp, golden pastry, can be made the day before
Georgina Hayden’s quick and easy recipe for creamy chicken and mustard fricassee | Quick and easy
This is a one-pan dinner at its finest: elegant and full of flavour, something that feels as if it has taken more effort and time than it actually has, and versatile in its finish – serve with creamy mash, fluffy rice, boiled potatoes; even hunks of fresh baguette would be wonderful for mopping up the creamy mustard sauce. I use whatever veg is in season: purple sprouting broccoli is at its best right now, but you could add stalks of rainbow chard, shredded cavolo nero, even halved baby carrots. Play around with whatever veg you have and love.If you can’t find mustard powder, feel free to use your mustard of choice – wholegrain would work well here.Prep 5 min Cook 30 min Serves 44 skin-on chicken breasts (about 160g each)Sea salt and black pepper 2 tsp English mustard powder 1 tbsp olive oil 200g purple sprouting broccoli 30g unsalted butter 4 garlic cloves, peeled and finely sliced1 tsp dried oregano 1 tsp aleppo pepper 2½ tbsp plain flour 125ml dry white wine 500ml chicken stock 200ml single creamPut the chicken breasts on a deep plate and season generously
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