UK stocks eked out small but unconvincing gains on Wednesday as investors weighed the impact of rising Covid-19 cases and the threat of an interest rate rise against ongoing economic recovery.

Despite UK consumer prices for September climbing less than expected inflation remains well above the Bank of England’s 2% target rate.

At the close the FTSE index of leading shares was 5 points higher at 7,223.

COMPANY NEWS

Copper producer Antofagasta (ANTO) delivered a positive third quarter trading update, noting that while output and net cash costs were in line with estimates and with last year, full year costs were likely to be lower than expected.

However, the shares dropped 1% to £14.62 on a lower production forecast for 2022 due to lack of rain at the firm’s Chilean operations.

Shares in fashion firm Burberry (BRBY) gained 2.3 % to £18.73 after it announced the appointment of Jonathan Akeroyd as chief executive from next April, succeeding Marco Gobbetti.

Akeroyd is currently chief executive of Italian fashion house Gianni Versace but previously headed up British brand Alexander McQueen for over a decade.

Shares in food and grocery delivery firm Deliveroo (ROO) reversed some of their recent losses gaining 3.6% to 301.1p after the company posted a 58% jump in gross transaction value to almost £1.6 billion for the third quarter.

The firm also increased its full year revenue and margin guidance after the successful roll-outs of its partnership with Amazon and its Hop grocery service.

Warehouse and industrial property investment company Segro (SGRO) reported further progress for the period from July to mid-October, with 450,000 square feet of new developments completed and new rental contracts signed. After their strong recent run, the shares eased 1.7% to £12.67.

MID- AND SMALL-CAP NEWS

Shares in tissue and loo-roll maker Accrol (ACRL) tumbled 13% to 39p after the firm warned full year earnings would be lower than expected due to ‘considerable’ cost increases and a time lag in passing on price increases to customers.

Exhibitions and show group Arena Events (ARE) announced it had agreed a takeover offer for the company from major Saudi shareholder Tasheel Group and Abu Dhabi-based investment firm IHC.

The 21p per share offer represents a 48% premium to last night’s closing price and implies an enterprise value of £95.1 million for the business. The shares jumped 42% to 20.1p.

Shares in cyber-security firm Avast (AVST) dipped 0.2% to 560p despite reporting a small increase in third quarter revenues and operating profits thanks to growth in its consumer business, despite growing competition, and confirmed its full year outlook.

After a lengthy review, the board of Scottish Investment Trust (SCIN) decided the ‘most compelling outcome’ for investors was to merge the company with JPMorgan Global Growth & Income (JGGI), prompting an 8.2% rally in the shares to 815p.

The change of management is expected to take effect by mid-January, with shareholders receiving new JGGI shares on a ‘formula asset value’ basis considering the net asset values of each company adjusted for costs and dividends.

Construction materials firm SigmaRoc (SRC:AIM) posted an upbeat trading statement thanks to the strong demand trends seen in the first half continuing into the third quarter.

Despite higher input prices, which it is taking steps to mitigate, the firm kept its positive outlook for the full year. The shares fell 1.5% to 100p.

Shares in respiratory drug maker Synairgen (SNG) leapt 13% to 166p after the company’s inhaled interferon beta formulation was recommended for Phase 3 trials in patients with mild to moderate Covid-19.

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Issue Date: 20 Oct 2021