London Stocks Trade Flat; Oil Stocks Rise, DS Smith Falls

The FTSE 100 index trades flat at 7062.78 in early trade, outperforming European stock indexes which trade lower, helped by gains in heavyweight oil stocks. Royal Dutch Shell B shares rise 2.4% while BP is up 1.9% as a barrel of Brent crude trades at $74.61, having earlier risen above $75 per barrel to reach its highest since late 2018. Property stocks also rise, though packaging company DS Smith falls 1.8% after saying its pretax profit for fiscal 2021 fell as revenue declined. Pharma giants AstraZeneca and GlaxoSmithKline are among the biggest fallers, down 1.6% and 1% respectively. (jessica.fleetham@wsj.com)

 
Companies News: 

Analytics Group Spectral MD Holdings Trades Higher in Market Debut

Shares in analytics company Spectral MD Holdings, Ltd. traded above the price of their initial public offering in their debut on London's junior AIM market on Tuesday.

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Victorian Plumbing Shares Rise on London Market Debut

Shares of Victorian Plumbing Group PLC rose as much as 17% on Tuesday as the company started trading on London's junior AIM, implying a market capitalization of 993.1 million pounds ($1.38 billion).

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Guaranty Trust Bank Requests Suspension of London-Listed Securities

Trading in Guaranty Trust Bank PLC securities has been temporarily suspended as of Tuesday by the U.K. Financial Conduct Authority, at the request of the company.

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Trackwise Designs Shares Fall After Warning on Revenue Delays

Shares in Trackwise Designs PLC fell Tuesday after the company warned that some revenue originally expected for this year will be delayed into 2022, but said that it swung to a pretax profit for 2020.

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Equiniti Appoints Andrew Peeler as Incoming CFO

Equiniti Group PLC said Tuesday that it has appointed Andrew Peeler as chief financial officer with effect from August 1, succeeding John Stier.

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Software Company itim Group Targets GBP48.1 Mln Valuation in AIM Float

Software company itim Group PLC, which provides technology to store-based retailers, on Tuesday said it will be valued at 48.1 million pounds ($67 million) on admission to trading on London's junior AIM market, based on the price of its initial public offering.

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TomCo Energy Says Oil-Sands Plant Will Require More Than $110 Mln Funding

TomCo Energy PLC on Tuesday said that its Greenfield joint venture will require at least $110 million in funding, mostly debt, for the construction of its first oil-sands plant.

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Kavango Resources Names Ben Turney as CEO After Michael Foster Steps Down

Kavango Resources PLC said Tuesday that Chief Executive Officer Michael Foster has decided to step down and that Ben Turney will replace him.

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Saga PLC Plans GBP250M Bond Issue, Tender Offer and Loan Repayment

Saga PLC said Tuesday that it plans to raise 250 million pounds ($348.4 million) via a bond issue, launch a tender offer for up to EUR100 million of existing bonds and repay a EUR70 million loan.

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MS International Shares Rise on Swing to FY 2021 Profit, Dividend Resumption

MS International PLC shares rose Tuesday after it said that it swung to a pretax profit in fiscal 2021 and declared a reinstated dividend.

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Gear4Music FY 2021 Profit, Revenue Rose Amid Pandemic Boost

Gear4Music (Holdings) PLC said Tuesday that pretax profit and revenue in fiscal 2021 rose due to pandemic shopping trends, and that trading in early fiscal 2022 has been stronger than management expectations.

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Avation Amends, Reschedules Orderbook With Avions de Transport Regional; Sells Aircraft

Avation PLC said Tuesday that it has agreed to amend and reschedule its long-term order book with Avions de Transport Regional for the ATR 72 series aircraft, and that it has sold one aircraft.

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OPG Power Ventures Expects to Meet FY 2021 Market Views Despite Generation Drop

OPG Power Ventures PLC on Tuesday reported lower power generation for the year ended March 31, but forecast that it will meet market expectations.

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Staffline 2020 Pretax Loss Widened

Staffline Group PLC said that its 2020 pretax loss widened after booking higher costs, and that no dividends will be declared until July 2022.

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Frenkel Topping: Early 2021 Trading Met Views, Reiterates Confidence

Frenkel Topping Group PLC said Tuesday that it has continued to trade in line with management expectations in early 2021 and it is confident in its full-year outlook.

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Good Energy Group Reports Improved Year-To-Date Performance, in Line With Views

Good Energy Group PLC said Tuesday that its performance in the year to date has been markedly ahead of 2020, in line with management's expectations.

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Surgical Innovations Says Activity Recovering to Pre-Pandemic Levels

Surgical Innovations Group PLC said Tuesday that activity levels are rebuilding toward 2019 levels, and that it is sees signs of recovery as a number of healthcare markets resume elective surgery.

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Kingspan Sees 1H Sales, Trading Profit Above Pre-Pandemic Levels

Kingspan Group PLC said Tuesday that it expects to report its first-half sales and trading profit rose compared with 2020 and 2019.

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Morses Club Says 1Q Was Strong, New Credit Is Ahead of Plans

Morses Club PLC said Tuesday that its performance was very strong and encouraging in the first quarter of fiscal 2022.

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Novacyt Swung to 2020 Pretax Profit on Covid-19 Testing Boost

Novacyt SA said Tuesday that it swung to a pretax profit for 2020 and ended the year debt-free as sales were boosted by Covid-19 tests, but booked a provision to cover potential costs from a contract dispute with the U.K. government.

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Audioboom Expects 2021 Revenue Ahead of Views on Strong Advertising Demand

Audioboom Group PLC said Tuesday that it expects revenue for 2021 to be significantly ahead of current market expectations.

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National Express Buys Spain's Transportes Rober for EUR13 Mln

National Express Group PLC said Tuesday that it is buying Transportes Rober in Spain for 13 million euros ($15.5 million) as part of its strategy to consolidate regional and urban bus markets.

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DS Smith FY 2021 Pretax Profit Fell

DS Smith PLC said Tuesday that pretax profit for fiscal 2021 fell as revenue declined, and that the volume momentum of the last quarter of the fiscal year has continued into fiscal 2022.

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Aston Martin Files for Legal Proceedings Against Nebula Project

Aston Martin Lagonda Global Holdings PLC said Tuesday that it is filing civil legal proceedings against Nebula Project AG over failure to pay some customer deposits for cars, which it expects to reduce 2021 earnings.

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Melrose to Return GBP730 Mln to Shareholders After Air Management Disposal

Melrose Industries PLC said Tuesday that it will return 730 million pounds ($1.02 billion) to its shareholders after completing the GBP2.62 billion sale of its Nortek Air Management division to Madison Industries LLC.

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National Express Group PLC Acquisition

TIDMNEX

 
Market Talk: 

Kerry Group's Discount to Peers Seen as Unwarranted

0945 GMT - Kerry Group trades at a discount of around 20% to the average of its European ingredients peers, a situation that is likely to be reversed, UBS says. "We believe this is unwarranted and is likely to unwind as its operational performance improves in line with economies re-opening," UBS analysts say. The Ireland-based company has agreed to acquire Niacet, a provider of preservation technologies which has an Ebitda margin that compares favorably both to Kerry's taste-and-nutrition division and to key ingredients peers, UBS says. Moreover, Kerry said it remains busy in terms of potential further acquisitions, the bank says. (adria.calatayud@dowjones.com)

Morses' Update Bodes Well for Future Profitability

0936 GMT - Shares in Morses Club rise 8.9% after the financial services provider reported an encouraging start to the year, particularly in the digital business, Peel Hunt says. The trading update highlights that the company is benefiting from strong demand and an increasingly strong market position, which bodes well for future levels of profitability. Peel Hunt, a corporate broker for Morses, raises its target price to 100 pence from 75 pence and reaffirms its buy rating on the stock. (jaime.llinares@wsj.com)

Copper Pauses Ahead of Powell Comments

0925 GMT - Copper prices inch higher as the metal stabilizes after concerns about demand prospects prompted several days of weakness. Three-month copper on the LME is up less than 0.1% at $9,182.50 a metric ton. While losses appear to have halted, analysts remain concerned about the prospect of tightening monetary policy, slowing demand, and Chinese efforts to tamp down rising commodities prices. "Underlying fundamentals are pretty much unchanged," said Malcolm Freeman, CEO of brokerage Kingdom Futures. "There is still the real prospect of interest rate rises and the very fast bounce back from shutdown due to Covid is slowing." Investors are looking ahead to comments from Federal Reserve Chairman Jerome Powell later Tuesday. (william.horner@wsj.com)

DS Smith Is Expected to Make Good Progress in Fiscal 2022

0859 GMT - Fiscal 2022 has started well for DS Smith with volume momentum continuing and an increase in packaging prices which are expected to fully recover cost inflation, Jefferies says. Demand for the packaging company is strong and it expects to make good progress in fiscal 2022 with Ebita estimates of GBP626 million being 4% ahead of consensus of GBP603 million, and fiscal 2023's GBP730 million being 10% ahead of GBP665 million consensus, Jefferies says. "Positioning positive into print, but with robust demand, supportive containerboard [paper] and box pricing, and north America division recovery, we think both consensus move toward our number," the U.S. bank says. Jefferies rates the stock buy with a 480 pence target price. (anthony.orunagoriainoff@dowjones.com)

DS Smith Outlook Brightens After Tough Year

0850 GMT - DS Smith still faces hurdles, but the outlook is improving, says Interactive Investor after the packaging manufacturer reported lower annual revenue and profit. Like other companies, Smith has had to tackle higher costs resulting from pandemic-related safety and operational changes and extreme supply constraints, hitting profit and revenue in the year to April, Interactive says. Still, the year ended better than it started, leaving Smith relatively well-placed to cash in on increased demand for packaging as people buy more goods online. "In particular, strong second-half momentum has continued into the new financial year, which bodes well for prospects, while some of the previously incurred costs will be recovered by higher pricing for customers," Interactive's Richard Hunter says. (philip.waller@wsj.com)

Uranium Market Fundamentals Point to Price Strengthening

0847 GMT - The uranium price is up 7.5% year to date, supported by a recovery of sentiment around global energy markets, Berenberg says. The brokerage estimates that more than 40 million pounds of uranium production capacity have been taken off stream over the past years, and that demand should now rise driven by the restart of the Japanese reactors and as new nuclear plants are built globally. In addition, utilities will be re-entering the market as their contract coverage rates decline, the German firm says. Berenberg is a corporate broker for Yellow Cake, a company focused on purchasing uranium. (jaime.llinares@wsj.com)

Lone Star's Final Offer Puts Ball in Senior's Court

0845 GMT - Lone Star raised its bid for Senior and declared it final, which puts the ball in the U.K. engineering company's court, Peel Hunt says. The 200 pence-a-share cash offer from the U.S. private-equity group--which compares with a previous bid of 185 pence a share--looks relatively attractive given current market conditions, but Senior has some large long-term shareholders who could influence the situation, Peel Hunt says. "Reasons to reject the offer include the fact that the share price peaked at 320p back in June 2018. However, the outlook for aerospace markets looked very different back then, and it will take a long time for end markets to recover," the U.K. brokerage says. (adria.calatayud@dowjones.com)

Aston Martin's Dispute With Nebula Might Be Bumpy

0838 GMT - Aston Martin's chaotic journey since joining the stock market in 2018 has taken a new turn with a legal dispute, severing ties with Nebula Project and scrapping Nebula's royalty deal, AJ Bell says. Aston investors might welcome the luxury-car maker's decisive action, but the royalties are likely to be hard fought given Nebula helped with financing when the company was going through a very bad patch, AJ Bell says. "One can only speculate, but Nebula may well try and seek alternative compensation if it cannot earn royalties in the future, perhaps arguing that it played a crucial supporting role to help Aston Martin during one of its darkest hours," the brokerage says. Shares are down 2.4% at 1,889 pence. (joseph.hoppe@wsj.com)

Grafton's IKH Acquisition Provides a Solid Base for Expansion

0825 GMT - Building-materials distributor Grafton's acquisition of Finnish wholesaler and distributor IKH is in line with its strategy to pursue inorganic expansion across Europe, strengthening its market position and supported by a strong balance sheet, Citi's Ami Galla says. "IKH has a dominant market position in Finland and provides a solid foundation to expand its footprint across the region driving further growth opportunities over the medium term," the U.S. bank says. Grafton's acquisition could add around 3% and up to 8% to consensus earnings before interest and taxes for 2021 and 2022 respectively, Citi says, retaining its buy recommendation and target price of 1,310 pence on the stock. Shares are up 4% at 1,170 pence. (joseph.hoppe@wsj.com)

Kingspan's Strong 2Q Momentum Leads to Forecast Upgrades

0814 GMT - Kingspan's second update in as many months is impressive, with strong momentum heading into the second quarter and demonstrating its ability to navigate operational challenges seamlessly, Goodbody says. The building-and-insulation materials company's update further underpins positive sentiment, particularly when coupled with its balance sheet optionality and its positioning to deliver energy efficient building materials, aiding the drive for sustainable construction, the brokerage says. "We are upgrading fiscal 2021 trading profit forecasts by 12% to around EUR640 million implying second half growth of 5% versus the second half of 2020 and 22% versus the second half of 2019," Goodbody says, retaining its buy recommendation. Shares are up 4.7% at EUR80.38. (joseph.hoppe@wsj.com)

DS Smith's Pricing Recovery Should Drive Margin Improvement in FY 2022

0800 GMT - DS Smith's volume trends in 1Q of fiscal 2022 have continued on from the previous quarter and although there is significant input cost inflation, the packaging company expects to recover these fully through price increases, Citi says. There has been a significant increase in containerboard and box prices, although with a lag, and these should come through in fiscal 2022, the bank says. Still, a pricing recovery should drive margin improvement in fiscal 2022, which is expected to be around 9.6% according to a consensus forecast, versus 8.4% in fiscal 2021 and Citi expectations of around 10.1%. Citi has a buy rating on the stock and a 500 pence target price. (anthony.orunagoriainoff@dowjones.com)

Grafton's Acquisition of IKH Looks a Good Deal for Investors

0756 GMT - Building-materials distributor Grafton's acquisition of Finnish wholesaler and distributor IKH is no surprise, given the company's long-stated ambition to enter a fourth market whenever the opportunity presented itself, Goodbody says. The deal size, specialization of the acquired operations and earnings accretion will tick a lot of boxes for investors, and there is the potential for further cash for acquisitions if the strategic review of the traditional U.K. merchanting businesses results in a disposal, the brokerage says. "Such is the strength of the Grafton Group balance sheet there remains considerable optionality for capital deployment following the IKH acquisition," Goodbody says, retaining its buy rating. Shares are up 3.5% at 1,164 pence. (joseph.hoppe@wsj.com)

Eurozone, Germany, France and UK PMIs Seen Beating Forecasts in June

0749 GMT - With reopening underway across the eurozone, high-frequency and early survey data imply a broad-based improvement in growth momentum in June, Goldman Sachs says. The American investment bank forecasts above-consensus gains for the eurozone composite purchasing managers' index. GS expects the eurozone composite PMI to increase by 2.4 points to 59.5 in June, reflecting a strong services-led gain in the composite index in Germany, forecast to reach 58.8, and further sizeable gains in France, where the composite PMI could rise to 59.5. In the U.K., GS also sees scope for an upside surprise relative to expectations for a small decline, with a new historical composite high of 63.4 driven mainly by services. Eurozone, Germany, France and U.K. flash PMIs will be published Wednesday. (maria.martinez@wsj.com)

U.K. Expected to Emerge From Latest Covid-19 Surge With Limited Economic Damage

0740 GMT - The U.K. can get through the new surge in infections without having to tighten restrictions and thus with only limited economic damage, Kallum Pickering, senior economist at Berenberg, says. This is because the U.K.'s high rate of vaccination--with 63.9% of the population having received at least one dose--has significantly weakened the link between infections and complications from Covid-19, he says. "Any damage from the later easing of remaining restrictions, as well as modestly lower in-store retail spending if consumers are temporarily more hesitant as infections rise, should be mitigated by stronger spending" once the wave has run its course, Pickering says. Berenberg forecasts U.K. GDP growth of 7.0% in 2021 and 5.4% in 2022. (maria.martinez@wsj.com)

 

Contact: London NewsPlus, Dow Jones Newswires; +44-20-7842-931

(END) Dow Jones Newswires

June 22, 2021 06:04 ET (10:04 GMT)

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