UK shares rose on Thursday as the pound dipped against the euro and the dollar. Knife-edge Brexit talks were set to continue, with a new deadline of Sunday, while the UK economy expanded at its slowest rate since returning to growth in May, with GDP increasing by just 0.4% month on month in October.
Overnight in the US, shares in Facebook dropped more than 5% as it faced a new antitrust lawsuit from the US Federal Trade Commission.
Meanwhile, food delivery company DoorDash spiked over 80% on its market debut continuing the strong performance of initial public offerings (IPO’s).
The pound was 0.7% weaker against the US dollar at $1.33. Later today the European Central Bank is expected to deliver more monetary stimulus to counter the effects of the latest lockdowns.
At midday the FTSE 100 was 37 points or 0.5% higher at 6,600 with consumer and healthcare stocks leading the gains.
COMPANY NEWS
Shares in industrial products distributor Electrocomponents (ECM) rallied 4.3% to 850p after it announced the acquisition of Synovos, a leading supply solutions player in the Americas for around £110 million and Needlers a leading provider in safety, hygiene and personal protective clothing for £40 million.
The firm said it would raise £180 million via a placing of new shares representing around 5% of existing capital to finance the purchases. A retail offer on PrimaryBid platform will accompany the placing.
Sporting goods retailer Frasers (FRAS) increased the bottom end of its full-year guidance, forecasting a 20% to 30% improvement in underlying earnings before interest, taxes, depreciation and amortization (EBITDA), up from 10%-to-30% announced in August.
For the 25 weeks to 25 October, pre-tax profit rose 17.6% to £106.1 million year-on-year, while revenue slipped 7.4% to £1.89 billion. The shares gained 3.2% to 453p.
Travel company TUI (TUI) said full-year revenues to September dropped 58% to €7.9 billion producing an operating loss of €3 billion compared with a profit of €3.9 billion last year.
As a result of the increasing travel restrictions and later booking behaviour of some customers, the company expects to operate an adjusted capacity of 20% for Winter 2020/21 which will be weighted towards its financial Q2. It continues to expect to operate an adjusted capacity of 80% for summer 2021. The shares dipped 2% to 432p.
Train and bus operator First Group (FGP) said first-half revenues to September fell 24% to £3.1 billion and adjusted operating profit dropped 88% to £10.4 million reflecting substantial reduction in passenger volumes during lockdowns.
The company said it had liquidity of £805 million in free cash and committed undrawn facilities consistent with April levels.
The group insisted it is now in a more robust financial position even in a range of potential downside scenarios. However, shares reversed 1.8% to higher to 67.7p.
In a trading update Automotive retailer Inchcape (INCH) upped its annual profit outlook and said it would consider resuming its dividend at the year-end. This followed a better-than-expected performance in November as the impact from the national lockdown was not as bad as feared.
The company said it expected pre-tax profit, excluding exceptionals, would be materially ahead of the published market consensus of £108 million. The shares accelerated 3.2% to 653p.
Online retailer Ocado (OCDO) said Ocado Retail, its joint venture with Marks & Spencer (MKS), grew revenues by 35% in the 13 weeks to 29 November reflecting strong demand.
Retail revenues were £580 million with an average of 360,000 orders transacted per week, up by 3.0%. Ocado shares dropped 6% to £21.88 while M&S shares were 4.7% weaker at 136p.
Shares in pub group Marston’s (MARS) fell 4% to 67p after reporting full-year revenues to 3 October down 30% to £821 million and a pre-tax loss of £22 million.
After a financial review the company has decided to continue with its debt reduction plans with a revised target to reduce net debt to below £1 billion by the 2024 financial year.
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