UK shares got off to a strong start on Monday morning as renewed hope over a US stimulus package and a coronavirus vaccine helped investors shrug off concerns over a no-deal Brexit and negative interest rates.
Yet by lunchtime, the FTSE 100 was largely flat as the boost from US stimulus hopes, vaccine developments and Chinese economic data waned. US futures suggested Wall Street would manage modest gains when trading resumed this afternoon despite the continuing rise in coronavirus cases across the pond.
At noon, the UK’s blue chip benchmark was 0.16% lower at 5,910.12.
G4S PUSHES BACK ON GARDAWORLD BID
In company news, security services firm G4S (GFS) softened 0.4% to 207.9p as it recommended shareholders reject GardaWorld’s 190p per share takeover bid.
G4S believes the timing of GardaWorld’s offer is ‘highly opportunistic’, and that it ‘continues to significantly undervalue the company when assessed across a number of measures including historic performance, trading and transaction multiples and on fundamental and intrinsic value.’
It also called GardaWorld a ‘very highly leveraged business’ that has grown through a string of acquisitions and which has incurred net losses of C$940 million over the past three years, and said it believes that ‘GardaWorld needs G4S in order to realise its aspirations.’
G4S shareholders have until 1pm on November 7 to vote on whether or not to accept the offer.
BOOHOO SLUMPS AS AUDITOR STEPS DOWN
Online fashion retailer Boohoo (BOO:AIM) slumped 12.6% to 276p after it confirmed that PricewaterhouseCoopers was standing down as its auditor.
PwC is still the company’s auditor for now, but Boohoo’s audit committee has recently launched a competitive tender process for its audit, with PwC not participating in this process.
The update came after the Financial Times reported that PwC was standing down due to concerns about the standard of corporate governance at Boohoo.
Shore Capital analysts called it ‘another weekend of damaging headlines’ for Boohoo, and said that ‘appointing a new auditor will not be a walk in the park as any new auditor will want to understand what has changed/is changing at the company.’
LAND SECURITIES SETS OUT STRATEGY
Commercial property developer Land Securities (LAND) gained 1.8% to 535p after it set out its strategy for growth ahead of its virtual capital markets day for analysts and investors.
The firm plans to ‘optimise’ its central London business by crystallising ‘significant value already created and fund investment into growth opportunities’, ‘reimagine’ its retail business, and dispose of assets in subscale sectors where it has no competitive advantage like hotels, leisure and retail parks.
It also looks to grow through ‘urban opportunities’, seeking enhanced returns through investment in mixed use urban developments already in its portfolio and new investments in London and potentially other major UK cities.
OTHER COMPANY NEWS
Pharmaceutical giant AstraZeneca (AZN) was flat at £82.16 after it received positive regulatory decisions in Europe for separate treatments for heart failure and chronic obstructive pulmonary disease.
Infrastructure investor John Laing (JLG) inched up 0.8% to 296p on agreeing to sell a portfolio of Australian wind farms to First Sentier Investors for $285 million, or about £157 million.
Consumer gift packaging business IG Design (IGR:AIM) jumped 11.3% to 463p, having guided for higher-than-expected adjusted profit in the first half, amid a 40% surge in revenue.
IG Design, however, said it remained cautious on its full-year outlook amid the ongoing Covid-19 pandemic.
Specialist currency manager Record (REC) cheapened 1.4% to 43p despite reporting that assets under management grew 4% in the second quarter.
Disease test-kit supplier Omega Diagnostics (ODX:AIM) fell 3.6% to 95p after it signed a supply contract with Abingdon Health regarding the production of rapid tests in the UK for Covid-19.
Office and industrial property investor McKay Securities (MCKS) was marked down 0.4% to 191.25p on announcing that it had collected 70% of rent due for the September quarter. McKay Securities said the rate would increase to 87% on receipt of agreed monthly payments.