UK stocks ended Monday’s session in the red as the reopening of shops and pubs across the UK failed to generate much of a market reaction.
Caution prevailed as many investors decided to hold off on any big decisions as first quarter earnings season picks up pace in the US.
‘UK markets have remained pretty subdued as they seemed to have priced in today’s lockdown easing exuberance,’ explained Danni Hewson, financial analyst at AJ Bell.
‘Though the share price of the majority of retail and hospitality businesses on both the FTSE 100 and 250 made gains over the last month, today brought mixed fortunes. Consumers might have pent up demand and saved up cash but competition for their favour will be fierce and reality will have a long way to go to meet expectations.’
London’s blue chip benchmark index finished 0.39% lower at 6,889.12 points, with the FTSE 250 off 0.44% at 22,153.55 points.
HAMMERSON IN TALKS TO SELL RETAIL PARKS
In company news, property developer Hammerson (HMSO) dipped 3% to 36.3p after it confirmed it is in talks to sell its portfolio of retail parks to rival developer Brookfield.
Hammerson gave the usual disclaimer that there can be ‘no certainty that a transaction would take place or the terms on which any transaction may occur’.
It added, ‘As announced at its full year results, the company continues to make asset disposals in liquid markets to further strengthen the balance sheet, with gross proceeds of £73 million achieved to date in 2021’.
Mining giant BHP (BHP) dropped 1.5% to £21.18 as its joint venture Samarco Mineracao filed for judicial review for bankruptcy protection after failing to agree terms on a debt restructure with creditors.
Samarco, BHP Brasil and Vale – both of which own 50% in Samarco – are expected to continue negotiations in the coming months with the Brazilian authorities to settle the R$155 billion public civil claim commenced by the Federal Prosecutors Office against the trio of companies.
Pharmaceutical company AstraZeneca (AZN) ended 0.9% lower at £72.25 after it revealed that high-level results from a phase 3 trial assessing the potential of a drug called Farxiga to treat patients hospitalised with Covid-19 failed to meet its primary goal.
The trial failed to achieve statistical significance for the primary goal of ‘prevention measuring organ dysfunction and all-cause mortality, and the primary endpoint of recovery measuring a change in clinical status (from early recovery to death), at 30 days,’ the company said.
CAKE BOX TO REPORT RECORD REVENUE
Cake seller Cake Box (CBOX:AIM) jumped 2.8% to 261p as it reported that, despite the impact of lockdown restrictions throughout the year, in the 40 weeks from 1 June 2020 to 7 March 2021 like-for-like sales in franchise stores grew 14.7%.
As a result, it expects to report record revenue for the year up around 16% compared to the same period last year, with adjusted pre-tax profit in line with market expectations.
Freight manager Xpediator (XPD:AIM) gained 4% to 59p as it hiked its divided after reporting an 81% rise in annual profit.
Pre-tax profit for the year through December increased to £3.9 million, up from £2.2 million year-on-year, as revenue rose 3.7% to £221.2 million. The firm declared a full-year dividend of 1.5p per share, up 13% year-on-year.
It said the growth in revenue reflected a generally resilient performance during Covid-19-impacted months, coupled with a strong performance in the last quarter of 2020. The company said its 2021 first quarter trading results were positive and ahead of management expectations.
Tobacco giant Imperial Brands (IMB) added 0.8% to £15.54 on announcing that Lukas Paravicini would join as chief financial officer earlier than expected, on 19 May.
German business park investor Sirius Real Estate (SRE) gained 1.7% to 95.5p as its annual rent roll rose 7.6% and it collected more than 98% of rent due for the year.
Student accommodation provider Unite (UTG) improved 0.7% to £10.91 on announcing that 73% of rooms were now reserved for the 2021/22 academic year across its entire portfolio.
Brake-disc manufacturer Surface Transforms (SCE:AIM) reversed 4.1% to 70p, having booked a full-year loss after spending on research and development offset a broadly flat revenue performance. Surface Transforms said it was targeting a full year profit in 2022.
Ingredients supplier Treatt (TET) gained 10.1% to trade at £10.55 as it said it expected to grow its first-half revenue by 14%, while also achieving an improvement in margins.
Innovative flooring manufacturer Victoria (VCP:AIM) improved 3.9% to 914p on the news it achieved record results for the year to 3 April 2021 in spite of Covid-related challenges and lockdowns.
Victoria expects annual sales to top be £640 million, up from £621.5 million in 2020, with underlying EBITDA in excess of £120 million versus the prior year’s £118.1 million.
C4X Discovery (C4XD:AIM) jumped 7.5% to 43p after the drug developer signed an exclusive licensing deal worth up to $492.12 million with French drugmaker Sanofi to develop an oral therapy for treatment of inflammatory diseases.