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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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."

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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.

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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.

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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.

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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)

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