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.
---
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).
---
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.
---
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.
---
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.
---
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.
---
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.
---
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.
---
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.
---
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.
---
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.
---
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.
---
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.
---
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.
---
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.
---
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.
---
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.
---
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.
---
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.
---
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.
---
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.
---
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.
---
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.
---
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.
---
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.
---
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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