UK stocks failed to keep pace with European markets on Wednesday, with the FTSE 100 index down 25 points or 0.4% to 7,070 points in early trading as weakness in insurers and house builders offset meagre gains for travel and leisure stocks.
Brent crude prices rose to $72.50 per barrel on signs of strong demand in the US and Europe, while concerns over Iranian supplies coming back to the market dissipated after US officials said sanctions against the country were unlikely to be lifted.
Meanwhile, gold prices traded sideways at $1,890 per ounce as investors awaited US inflation data due on Thursday.
COMPANY NEWS
The Competition and Markets Authority announced it has opened enforcement cases against airline firms International Consolidated Airlines (IAG), the owner and operator of British Airways and Iberia, and Ryanair (RYA).
The regulator is investigating whether British Airways and Ryanair broke consumer law by failing to offer refunds for flights customers couldn’t legally take during periods of lockdown. Shares in IAG added 2% to 202p while Ryanair shares added 1% to €16.70.
Travel food and beverage provider SSP Group (SSPG) posted predictably weak results for the first half to the end of March, in what was a ‘very challenging market’.
Organic revenues for the first six months were down 79% to £256.7 million due to a huge drop in passenger numbers across all travel markets. The firm left its medium-term outlook unchanged and said it doesn’t expect organic revenues to return to pre-Covid levels until 2024 at the earliest. After opening lower, SSP shares traded 0.5% higher at 310p by 8.45am.
Intellectual property investor IP Group (IPO) announced it would pay an inaugural dividend of 1p per share later this month.
The group said that while shareholder returns ‘will continue to be driven primarily by long-term capital appreciation, the board also considers that the business model has reached a sufficient stage of maturity that a modest but growing dividend should form a small part of the overall shareholder value proposition’. Shares gained 0.7% to 120p.
Medical products maker Smith & Nephew (SN.) was a rare gainer, climbing 4% to £15.31 after analysts at investment bank Credit Suisse lifted their view from Hold to Buy.
AIM ROUND-UP
Data erasure and mobile technology group Blancco Technology (BLTG:AIM) posted a trading update to flag that operating profits and cash generation for the year to June would be ‘significantly ahead’ of management’s expectations.
While revenues are seen in line with estimates, tight cost control measures during the pandemic have resulted in higher operating margins, particularly in the second half as top-line growth accelerated. Shares jumped 5.2% to 284p.
Credit hire and legal services firm Anexo (ANX:AIM) reported positive trading for the first four months of the year, with the number of vehicles on hire ahead of the same period last year and cash collections in its Bond Turner legal business well ahead. Shares traded sideways at 136p.
Specialist real estate investment trust Urban Logistics (SHED:AIM) posted an 88% rise in rental income for the year to the end of March and a 13% rise in the value of its portfolio excluding capital raises.
Total dividends for the year are 7.6p, giving the trust a yield of 4.7%. Meanwhile the firm said it hopes to move from AIM to the main market ‘in the near future’. Shares dipped 1.5% to 159p.
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