UK stocks ended the week on the front foot along with other European markets, shrugging off previous concerns over a spike in global coronavirus cases.

On the currency markets the pound was steady against the dollar at $1.24 while in commodities Brent crude traded slightly lower at $41 per barrel and gold traded sideways at $1,763 per ounce.

The FTSE 100 index added 0.8% to 6,198 led by internationally-exposed firms such as pest control group Rentokil (RTO) up 4% to 519p, engineer Smiths Group (SMIN) up 3.1% to £12.90 and plumbing and heating supplier Ferguson (FERG) up 2% to £64.23.

On the other side of the ledger were domestic-facing stocks such as Royal Bank of Scotland (RBS) down 0.4% to 120p, fashion retailer Next (NXT) down 1% to £47.70 and house builder Berkeley Group (BKG) down 1.5% to £42.03.

ONLINE SALES SHIFT

Supermarket group Tesco (TSCO) made modest gains, up 0.7% to 228p after posting a strong first quarter trading update with UK like for like sales gaining 8.7% in the 13 weeks to 30 May led by a 48% increase in online revenues.

The grocery giant doubled its delivery slots to cope with demand, which surpassed 16% of total sales at the end of the quarter against a usual run rate of 9%, and sees online sales growing by £2bn over the full year.

However, the sudden increase in sales both in-store and online came at ‘significant’ cost which was only partly offset by increased volumes and relief from government programmes.

Among the day’s best performers were shares in online betting firm 888 Holdings (888) which leapt 14% to 173p after the company revealed that full year earnings before interest, taxation, depreciation and amortisation (EBITDA) would be ‘significantly ahead of prior expectations.’

The group has ‘continued to trade well’ since its March update with average daily revenue up 34% on last year thanks to ‘the structural shift towards online services that has accelerated during recent months.’

FINANCING MOVES

Industrial equipment firm Weir Group (WEIR) was another strong performer up 5% to £10.85 after it announced a new refinancing package along with a solid second quarter trading update thanks to stable orders in its mining division.

The group has completed the refinancing of its main banking facilities out to 2023 albeit at a slightly higher cost than before, but it remains highly cash generative and while the oil and gas business has seen a drop in demand its mining equipment business has seen a steady flow of orders.

Among the fallers, luxury carmaker Aston Martin Lagonda (AML) reversed 14% to 53.4p after announcing yet another share placing to prop up the business. The latest issue of new shares is limited to less than 19.99% of the firm’s existing capital and is partly underwritten by core shareholders including F1 magnate Lawrence Stroll, but without being able to exercise their pre-emption rights retail shareholders face yet more dilution.

Among the day’s worst performers was shopping centre owner Intu Properties (INTU) which fell 54% to 1.8p after the firm revealed that discussions with its lenders to waive the covenant on its revolving credit facility which expires at midnight tonight had failed.

According to the statement, there was ‘insufficient alignment and agreement’ with the group's creditors and the board is ‘considering the position of Intu with a view to protecting the interests of its stakeholders.’

The statement concludes with the admission that a solution is ‘likely to involve the appointment of administrators.’

 

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Issue Date: 26 Jun 2020