London’s FTSE 100 edges 11.3 points higher to 7,038 points as the market gets its first proper chance to price in yesterday’s Budget, from which there will be numerous winners and losers.
One company on the up is unloved bookie William Hill (WMH), bid up 1.1p to 206.1p as the remote gaming duty hike from 15% to 21% is perhaps less severe than some had expected.
Kier (KIE) clips ahead 2.3% to 875p with the Budget expected to boost its infrastructure business; the construction play should also profit from much-needed spending on pothole repairs.
Bookseller-to-stationer WH Smith (SMWH) soars 6.9% higher to £18.54 as investors welcome the £155m acquisition of InMotion, the largest airport-based digital accessories retailer in North America. Selling everything from headphones and earbuds to portable speakers and action cameras, InMotion doubles the size of WH Smith’s international travel business.
Oil major BP (BP.) improves 4% to 556.3p as third quarter profits more than double on the production of higher volumes of oil and gas amid improved oil prices. BP reported underlying profits on a replacement cost basis (a closely watched measure to gauge performance) of $3.8bn, up from $1.87m in the same period a year earlier.
This is the highest quarterly result in more than five years and far exceeds market forecasts. Reflecting confidence in its cash generation and capital discipline, and assuming oil prices remain firm, BP says it now expects to fully fund the acquisition of BHP Billiton’s (BLT) US shale business from available cash, without resorting to a right issue.
Investors have renewed appetites for Ocado (OCDO), bid up 34.8p or 4.4% to 835.6p after inking a ‘Master Services Agreement’ with Kroger. In an announcement which essentially puts flesh on the bones of a partnership announced in May, Ocado says Kroger will order 20 Customer Fulfilment Centres (CFCs) over the first three years of the deal, the first three by the end of this year.
Elsewhere, The Restaurant Group’s (RTN) proposed acquisition of the Wagamama noodle chain leaves a sour taste, the shares marked down 7.1% to 276p with investors worried the Frankie & Benny’s owner is biting off more than it can chew.
Restaurant Group is buying Wagamama for an enterprise value of £559m, with the deal to be funded through cash, new debt and a bumper £315m rights issue. ‘We do harbour some concerns of moving back to the high street and reducing the proportionate mix of higher value concessions,’ says Shore Capital’s Greg Johnson, ‘especially given the debt, although on balance a much improved business is set to emerge.'
Also beating a retreat is Reckitt Benckiser (RB.), the Nurofen, Strepsils and Cillit Bang brands owner sold down 5.3% to £62.59 on a disappointing third quarter. Like-for-like growth of 2% fell short of the 4% called for by consensus and growth was also crimped by temporary disruption at Reckitt’s European baby food manufacturing plant.
Spread betting and contracts for difference specialist IG Group (IGG) sparks up 4.7% to 608.5p on the appointment of seasoned finance and digital technology player June Felix as CEO. An IG Group non-executive director since 2015, she replaces Peter Hetherington, who stepped down last month.
In other news, spend management solutions play Proactis (PHD:AIM) perks up 6% to 140.5p after swinging to an annual profit with a boost from the acquisition of payment provider Perfect Commerce.
And big data tech tiddler Rosslyn Data Technologies (RDT:AIM) ticks 6.8% higher to 7.88p after bagging a contract worth more than €560,000 with major global logistics company.
