Worries Over UK Economic Headwinds Could Weigh on Pound
Concerns about building headwinds facing the economy could weigh
on the pound in the near-term, Rabobank says. "These include rising
energy and food bills in addition to the forthcoming hike in
National Insurance tax in April," Rabobank forex strategist Jane
Foley says. "Underpinning these concerns are ongoing fears that
Brexit may have left the economy dis-advantaged." Reports of
chronic cross-Channel hold ups and the National Audit Office
suggesting the U.K. is rushing through free trade agreements
without thorough consultation fuel fears that Brexit could bring
lower growth and higher inflation for the U.K. than would have been
seen otherwise, she says. Rabobank's year-end EUR/GBP forecast of
0.85 now looks optimistic, she says. EUR/GBP falls 0.2% to
0.8574.
Companies News:
Cloudcall Group Agrees to GBP39.9 Mln Takeover; Shares Leap
Shares of Cloudcall Group PLC rose as much as 70% in early trade
Thursday after the company said it has agreed to a 39.9
million-pound ($52.7 million) takeover by Xplorer Capital
Management LLC.
---
Seraphine Backs FY 2022 Guidance Despite Swing to 1H Pretax
Loss
Seraphine Group PLC said Thursday that it is backing its
full-year guidance despite reporting a swing to a pretax loss for
the first half of the fiscal year on higher costs.
---
Cordel Group Shares Rise on Contract Extension, Expected FY
Growth
Shares in Cordel Group PLC rose on Thursday after the company
said that it has secured a contract extension with a large U.S.
railroad company that makes revenue of more than $250 million.
---
Gresham House Sees FY 2021 Above Market Expectations
Gresham House PLC said Thursday that it expects to beat market
expectations for fiscal 2021 as the group experienced a continued
strong growth into the fourth quarter.
---
Active Energy Shares Dive on Discounted GBP3 Mln Fundraising
Shares in Active Energy Group PLC fell sharply on Thursday after
the company proposed to raise 3.0 million pounds ($4.0 million) via
a heavily discounted share issue.
---
B90 Holdings Chairman Paul Duffen Steps Down
B90 Holdings PLC said Thursday that Chairman Paul Duffen is
stepping down after three years to pursue other opportunities.
---
Electra Private Equity Prepares to Ask Shareholders to Approve
Business Shift
Electra Private Equity PLC said Thursday that it intends to ask
shareholders to approve the cancellation of its shares from
trading, and readmission under the name Unbound Group PLC.
---
ConvaTec Group CFO to Step Down in March
ConvaTec Group PLC said Thursday that Chief Financial Officer
Frank Schulkes has agreed to step down from the role and as a
director of the company.
---
Porvair Expects Higher Revenue in FY 2021
Porvair PLC said Thursday that revenue for fiscal 2021 is
expected to be 8% higher than in the previous year.
---
Wise PLC Names David Wells as New Chairman
Wise PLC said Thursday that Chairman Taavet Hinrikus, who
co-founded the company, will step down and Senior Independent
Director David Wells will takeover the role with immediate
effect.
---
CT Automotive Group to List in London in Late December
CT Automotive Group PLC said Thursday that it intends to list on
the London stock exchange on Dec. 23, raising an unconfirmed
amount.
---
LendInvest Swung to 1H Pretax Profit on Buy-To-Let Portfolio
Expansion
LendInvest PLC said Thursday that it swung to a pretax profit in
the first half of fiscal 2022 on the back of growth in its
buy-to-let portfolio.
---
Directa Plus to Raise GBP7 Mln Through Share Placing,
Subscription
Directa Plus PLC said Thursday that it intends to raise around
7.0 million pounds ($9.2 million) through a conditional placing and
subscription, to fund greater commercialization of its products and
growth.
Market Talk:
Balfour Beatty Trading Update Was Reassuring
1256 GMT - Shares in Balfour Beatty rise 2.9% after the
civil-engineering group said it continues to expect 2021 underlying
profit from operations in its earnings-based businesses to match
that of 2019. Trading was in line with expectations and having
completed 2021's GBP150 million buyback, the group said it expected
2022's buyback to be at least GBP100 million, Numis Securities
says. "We view this as a reassuring indication that the H1 London
private sector write-downs were sufficient and cost
inflation/supply disruption is being effectively managed at the
group level, and continue to view it as a good recovery," Numis
analyst Jonathan Coubrough says.
---
FirstGroup's Exposure to Remote Work Is 'Overstated'
1238 GMT - The U.K. government's recommendation for office
workers to work from home isn't expected to affect FirstGroup as
the U.K. bus and train operator's exposure to remote work is
"overstated," Liberum says. Commuting to work represents 19% of
journeys and is only the fourth most important journey purpose in
regional bus transport, with education, leisure and shopping
accounting for nearly 70% of journeys, the U.K. investment bank
says. Shares are down 4 pence, or 3.9%, at 97.7 pence.
---
Go-Ahead Shares Fall After Results Delay
1217 GMT - Go-Ahead Group stock drops 22% to 549 pence after the
U.K. bus and train operator said it expects trading in its shares
to be temporarily suspended starting Jan. 4 because the publication
of its fiscal 2021 results was further delayed. Go-Ahead's shares
have fallen significantly since the U.K. government took over its
Southeastern rail contract, RBC Capital Markets says. "Whilst we
were not surprised by the sell-off, over 90% of Go-Ahead's value is
in bus," RBC says. "Although clarity on the level of revenues and
margins that bus operators return to after the pandemic may take
some time, longer-term drivers, such as youth demographics and the
National Bus Strategy look supportive. We rate Go-Ahead outperform,
with a 1,030 pence price target."
---
Farfetch Needs a Boost as Luxury Brands Turn Away From
Platforms, Bernstein Says
1201 GMT - "Farfetch needs a white rabbit out of the hat," as
luxury brands increasingly focus on direct-to-consumer sales,
Bernstein says. It can be difficult to make money in an industry
where the biggest brands sell directly to customers rather than via
e-commerce platforms such as British-Portuguese Farfetch, Bernstein
says. A possible investment in Swiss group Richemont's own
e-commerce business YNAP would see Farfetch become even more of a
marketplace, a potential problem as consumers return to stores and
boutiques reduce megabrand inventory, Bernstein warns. Meanwhile,
Farfetch's M&A leverage could be hit if, as in 3Q, financial
results miss expectations and the share price suffers, the
brokerage adds, maintaining its market-perform rating on the stock
but trimming the target price to $40.50 from $42.
---
Farfetch's Potential YNAP Deal Remains Unclear, Bernstein
Says
1155 GMT - For Farfetch, investment in peer Yoox Net-a-Porter
could have big benefits, but a deal remains uncertain, Bernstein
says. The British-Portuguese luxury e-commerce platform is in talks
with YNAP's owner, Swiss group Richemont, which wants to divest
overall control of the business. However, what an eventual tie-up
might look like is unclear, and Richemont may not be willing to
give Farfetch too much support as part of a deal, such as opening
up Farfetch concessions for its heavyweight jewelry brands Cartier
and Van Cleef & Arpels, Bernstein says. Nevertheless, a deal
does seem within reach, though some of the upside looks already
priced in to both Farfetch and Richemont stocks, the brokerage
says. Farfetch last closed in New York at $36.
---
FirstGroup North America Sale Masks Better Bus Performance
1135 GMT - FirstGroup drops 5.4% to 96 pence after the U.K. bus
and train operator posted a widened first-half pretax loss. The
group's disposal earlier this year of its North American operations
made the results more complicated and, along with start-up costs
for new rail operations, masked an encouraging improvement in the
company's bus business, Liberum Capital says. "While there are
potential downside risks to estimates in the short term if Covid
restrictions continue to tighten, the most recent changes don't
materially impact the most important reasons to travel by
bus--education, leisure, shopping," Liberum analysts say. The
brokerage retains a buy recommendation on the stock and a
sum-of-the-parts-based target price of 123 pence.
---
Platform Companies Could Leave Some Countries After EU
Gig-Worker Bill
1117 GMT - Ride-hailing and delivery companies could decide to
leave certain countries given the higher costs implied by employing
riders, Bryan Garnier warns. The EU on Thursday published a legal
proposal that could entail the reclassification of more than 4
million gig workers in the bloc, with an associated increase in
costs of up to EUR4.5 billion a year for platform companies. In
Spain, a law came into force this summer ordering delivery
platforms to employ their workers, leading U.K.-based Deliveroo to
withdraw from the country entirely. Given the higher scale need to
break even if and when the new proposals are implemented, some
players could decide similarly to exit certain markets, Bryan
Garnier says in a note published ahead of the bill, adding that
consumer costs could also rise.
Contact: London NewsPlus, Dow Jones Newswires; Write to Sarka
Halas at sarka.halas@wsj.com
(END) Dow Jones Newswires
December 09, 2021 08:36 ET (13:36 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
FTSE 100
Index Chart
From Mar 2024 to Apr 2024
FTSE 100
Index Chart
From Apr 2023 to Apr 2024