UK stocks continued their momentum on Wednesday with more solid gains as investors remained upbeat on the global economic recovery.

Defying expectations of a flat opening, the UK’s benchmark FTSE 100 index moved 0.56% higher to 7,120 while the midcap FTSE 250 index, currently sitting at all-time highs, gained 0.33% to 22,951.

It comes after a flat session overnight on Wall Street, where the Dow Jones closed up 0.13% with the S&P 500 edging 0.05% lower and the Nasdaq nudging just 0.09% higher.

There was a mixed performance among Asian stocks this morning, with Japan’s Nikkei 225 trading 0.46% higher while the Hang Seng in Hong Kong fell 0.67% and China’s Shanghai Composite tumbled 0.88%.

As for commodities, gold dipped 0.1% to $1,896.82 an ounce, while Brent crude oil futures traded 0.41% higher to $70.54 per barrel.

WIZZ AIR SWINGS TO HUGE LOSS

In company news, budget airline Wizz Air (WIZZ) gained 1.1% to £49.29 despite the fact it swung to a deep annual loss after the pandemic sent passenger volumes plunging. Net losses for the year through March amounted to €576 million, compared to a year-on-year profit of €281.1 million, as revenue sank 73% to €739.0 million with passenger volumes tumbling 75% to 10.2 million.

‘This was probably one of the most challenging years for the aviation industry, heavily impacted by Covid-19 related regulations,’ chief executive Jozsef Varadi said.

He added: ‘We are cautiously optimistic about the recovery of the business, which has started later than what we would have liked as Covid-19 restrictions have remained in place longer than anticipated.’

For the current financial year, the company expects to post another net loss unless there’s an accelerated and permanent lifting of restrictions. Wizz Air expected to fly around 30% of its capacity in the first quarter to the end of June, but for its 2023 financial year starting next April it’s forecasting a ‘strong trading environment’ with a plan to operate at full capacity.

BLOOMSBURY REPORTS RECORD YEAR

Publisher Bloomsbury (BMY) jumped 7.8% to 332.9p after it reported a record financial year as reading enjoyed a renaissance during pandemic lockdowns.

Revenues at the Harry Potter publisher rose 14% to £185.1 million in the year ending 28 February, up from £162.8 million the previous year. Pre-tax profit was also boosted by 22% to £19.2 million and the company has declared a special dividend of 9.78p per share as a result.

Chief executive Nigel Newton said: ‘Our diverse consumer portfolio included backlist titles which really struck a chord with readers throughout the pandemic on themes such as humanity, social inclusion, escapism, fantasy, cookery and baking.’

AVEVA CEO BUYS IN

Industrial software group Aveva (AVV) gained 0.6% to £35.17 as it revealed chief executive Peter Herweck bought 13,500 shares in the business at a price of £35.48 each in a deal worth around £479,000.

Oil company Tullow Oil (TLW) increased 1.6% to 56.8p as it said chairman Dorothy Thompson had decided to stand down, having only stepped into the role in September 2018. A search process to find a replacement had been launched and is expected to conclude towards the end of the summer, the company said.

WATER INTELLIGENCE MAKES ACQUISITIONS

Leak detection and remediation group Water Intelligence (WATR:AIM) gained 1.8% to 850p as it announced two acquisitions in the US for a combined $0.95 million.

The two deals included the reacquisition of an American Leak Detection franchise in Reno, Nevada for $0.25 million and the acquisition of plumbing group PlumbRight Services for $0.7 million.

Telecoms company Airtel Africa (AAF) increased 1% to 79.8p after it sold 1,400 towers in Tanzania for $175 million. The firm said the transaction is the latest strategic divestment of its tower portfolio as it focusses on an asset-light business model and on its core subscriber-facing operations.

OTHER NEWS

Bicycle and other leisure equipment retailer Tandem (TND:AIM) fell 3.1% to 644.2p despite its profits rising ‘considerably’ in the year to date amid a jump in sales.

The company, however, added that pressure on stock availability, higher freight rates and bicycle supply constraints had put pressure on its margins. Revenue for the five months through May had risen around 24% year-on-year, the company said in a trading update.

Cloud and managed communications services provider Maintel (MAI:AIM) fell 3.4% to 333.1p as it swung to a full-year loss after the pandemic delayed project work and it lost legacy contracts in 2019.

Pre-tax losses for the year through December amounted to £2.2 million, compared to a year-on-year profit of £1.8 million. Revenue fell 13% to £106.4 million.

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Issue Date: 02 Jun 2021