UK stocks made modest gains in early trade on Tuesday as tougher restrictions were imposed across London and other parts of the south-east to curb a rise in Covid-19 infections.

Investors continue to cling on to fading hopes of a Brexit trade deal with the European Union before a year-end deadline, while latest UK jobless data made for gloomy reading.

Official data showed the unemployment rate reached 4.9% in the three months to October and the number of redundancies hit a record high as companies prepared for the end of the government's coronavirus job subsidies programme which was eventually extended into 2021.

The benchmark FTSE 100 nudged 0.18% higher to 6,543.55, with healthcare and financial stocks dragging.

The mid-cap FTSE 250 index, considered a barometer for Brexit sentiment, was modestly down at 19,740.7.

SURGING SPREADS

Online trading platform IG Group (IGG) said it expects to report a 66.4% surge in first-half revenue as coronavirus-led volatility in financial markets triggered strong client activity.

IG and other industry players, such as CMC Markets (CMCX) and Plus500 (PLUS) have seen their profit skyrocket this year due to record client activity amid the pandemic, the US presidential election and the uncertainty over a Brexit trade deal.

The company, which allows individuals and other non-institutional retail investors to bet on stock, currency and oil market moves, said it expects net trading revenue to come in at £416 million for the six-month period ended 30 November from £250 million last year.

IG shares rallied 2% to 845p.

Britain's biggest sportswear retailer JD Sports (JD.)  said on Tuesday it had acquired US-based shoe retailer Shoe Palace in a $325 million deal.

Investors cottoned-on to the expanded footprint the purchase will bring, especially on the US West Coast, sending the stock soaring to the top of the FTSE 100 leader board, up 5.5% to 834p.

London West End real estate investor Shaftesbury (SHB) swung to a full-year loss after the pandemic hit rental income and prompted a steep downward revaluation of its property portfolio.

Net losses for the year through September amounted to £699.5 million, compared to a profit of £26 million year-on-year.

Net property income dropped 24% to £74.3 million owing to a 3.5% like-for-like decrease in rental income and charges for expected credit losses and impairments of £21.9 million.

Shaftesbury shares were among the larger falls on the FTSE 250 index, down nearly 5% at 523p.

AIRTEL AFRICA STAKE SALE

Topping that was mobile masts operator Airtel Africa (AAF), which plunged 18% to 75.6p after one of its long-standing institutional investors sold-off a 1.6% stake in the business at a discount to last night’s 92.2p close.

The 60 million share slug was placed at 80p per share. The shareholder went unnamed.

WPP (WPP), the world's biggest advertising company, said it will restate its financial statements for 2017, 2018 and 2019 as some aspects were not fully in line with accounting requirements.

These adjustments will not impact on any of WPP's headline measures, such as operating profit, net debt, net assets, net current liabilities or statement of cash flows, the company said in a statement.

WPP shares stayed largely flat at 790.8p, valuing the business at just over £10 billion.

Defence company Chemring (CHG) saw its share price rally hard after it raised its dividend steer after reporting annual results that topped expectations as profit was boosted by strong performance in both its divisions.

For the year ended 31 October, statutory pre-tax profit rose to £43.3 million from £26.7 million year-on-year as revenue climbed 21% to £402.5 million.

Chemring shares jumped 10% to 298.08p.

ELSEWHERE ON THE MARKET

Pawnbroker Ramsdens (RFX:AIM) scrapped its final dividend after the Covid-19 pandemic weighed on its profit performance.

The company posted a pre-tax profit for the 18 months to 30 September of £9.2 million, having recently changed its balance date from 31 March.

The figure was higher than the previous year's £8.5 million, though that figure was only for the 12-month period to 31 March 2020. Revenue in the 18 months through September was £76.9 million, compared to £59.5 million for the 12 months through March.

The share price nudged 1.8% higher to 138p.

Real estate agency Purplebricks (PURP:AIM) jumped 13% to 85.6p after it swung to a first-half profit in a sign that it's recovering from a recent rough patch that saw it beat a retreat from North America and Australia.

The company also forecast annual adjusted earnings above current market expectations.

Net profit for the six months through October amounted to £6.8 million, compared to losses of £14.1 million year-on-year, and included a gain on the sale of its Canadian business. Revenue fell 6% to £44.2 million, though gross profit fell just 1% to £29.6 million.

Investment trust BMO Global Smaller Companies (BGSC) reported performance that fell short of its benchmark in the first half of the year.

Net asset value with debt at market value increased to 133.93p per share, giving a total return of 13.1%, undershooting the benchmark total return of 15.2%.

The share price ended the period at 123.8p, delivering a total return of 12.6%, but rose to 141.6p on Tuesday.

The interim dividend was held at 0.55p per ordinary share.

Small company investor Miton UK MicroCap Trust (MINI) posted a positive first-half performance but said it was unlikely to pay a dividend for the full year.

The company's net asset value total return for the six months through October was 21.6%. The share price stayed flat at 62.3p.

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Issue Date: 15 Dec 2020