UK shares made a hesitant start to the new week, with a strong pound holding back export-oriented shares and lower oil prices knocking the energy sector.
Brent crude fell 1% to $65.4 a barrel and the pound gained 0.3% against the US dollar to $1.39.
Overnight trading in Asia was mixed with Japan’s Nikkei 225 gaining 0.3% and China’s Composite index losing 0.95%.
At 9am the FTSE 100 index of leading stocks was down 0.1% at 6,934 points.
CORPORATE NEWS
Shares in educational material and services firm Pearson (PSON) climbed 2.6% to 822p after the firm said first quarter sales rose 5% thanks to a 25% increase in global online learning.
Pearson said it still expected its full year performance to be in line with its 2021 outlook outlined on 8 March.
Pharma company AstraZeneca (AZN) said its lung cancer drug Tagrisso had been recommended for marketing authorisation in the European Union.
The endorsement followed positive results from the Adaura phase III trial evaluating the efficacy of Tagrisso in treating adult patients with early-stage epidermal growth factor receptor-mutated non-small cell lung cancer.
Meanwhile, the company’s drug to treat neurofibromatosis, a debilitating genetic condition causing disfigurement and visual impairment, was also recommended for approval in the European Union.
In a separate statement, AstraZeneca said a Melody phase III trial of nirsevimab, used to treat RSV, met its primary goal. RSV is a common, contagious virus that infects the respiratory tract causing millions of hospitalisations globally.
Despite the raft of positive news, Astra shares traded sideways at £75.50.
Financial services company Informa (INF) laid out plans to combine its existing FBX business with Novantas to create a ‘leading competitive intelligence and specialist data business serving the retail banking markets.’
The agreement is structured as a takeover of Novantas on a cash- and debt-free basis by Informa and private equity firm Inflexion and should complete by the end of June 2021, subject to regulatory approvals. The shares dipped 0.25% to 545p.
SPLIT CONFIRMED
Tate & Lyle (TATE) responded to media speculation about a possible split its primary products business from its core food and beverage business by confirming it was mulling a potential separation.
The board said it believed that if a transaction of this nature was completed it would enable the two businesses to 'focus on their respective strategies and capital allocation priorities' and create the opportunity for enhanced shareholder value. The shares climbed 6.4% to 806p.
EARNINGS BEATS
Shares in engineering company IMI (IMI) surged 5.5% to £14.73 after the board upgraded its guidance for annual earnings following ‘strong’ performance in the first quarter of the year amid improving trends in across its major end markets.
For the full year, guidance for adjusted earnings per share was lifted to between 81p and 87p from 75p to 82p previously. The company also said it was confident it would become a sustainable 18% to 20% margin business over time.
Shares in recruitment and training group Staffline (STAFF) flew 18.6% higher to 82p after the company said first-quarter underlying profit had more than doubled, beating expectations and providing it with confidence for the full year.
Underlying operating profit for the three months through March jumped 133% year-on-year to £1.4 million, amid a 0.2% rise in revenue to £227.9 million, the company said in a trading update.
It added that a significant restructuring undertaken in 2020 had generated around £15 million in overhead cost savings.
Data analytics company Ixico (IXI:AIM) said it expected to report higher first-half revenue after it won £9.4 million of contracts in the first half, up from £4 million last year, pushing the shares up 6.6% to 66.8p.
PROFIT DOWNGRADE
Shares in infection control product group Tristel (TSTL) sank 12.5% to 586.6p after the company downgraded its annual profit guidance, blaming lower-than-expected sales and a rise in its cost base.
The company was experiencing a fall in demand for patient examinations due to Covid-19, which was only partially partly offset by surface disinfectant product sales.
Tristel said it was confident sales and profits growth would resume next year and it expected to declare a final dividend of 3.93p, giving a total of 6.55p for the year.
A list of FTSE 250 movers can be seen HERE
