The FTSE 100 recorded modest gains in early trading on Friday as UK retail sales beat expectations for October and look set to keep growing ahead of Christmas.
There was little earnings news for the market to digest, with attention turning to retail sales as volumes last month increased by 1.2% from September and were 5.8% higher than the same month a year ago, the Office for National Statistics (ONS) said. It was the sixth consecutive month of growth.
The UK’s benchmark index rose 0.26% to 6,350.51 just before 9am.
In company news, the big faller of the morning was software group Sage (SGE), which tumbled 10.5% to 608.4p after its organic operating profit fell 3.7% to £391 million and its operating profit margin dipped 1.7% to 22.1% in the year to 30 September 2020.
Investors were put off the stock after it added that its organic operating margin is expected to be up to 3% below this year’s figure, depending on the level of additional investment it makes during the year.
But there were some plus points for the firm as it reported an 8.5% increase in organic recurring revenue, a 15% increase in earnings per share and a 2% rise in its dividend to 17.25p per share.
Packaging company Smurfit Kappa (SKG) fell 2.73% to £31.34 after it raised €660 million through a share issue. The company listed 19.4 million new shares, selling them at €34.00 each or £30.46 for investors who elected to settle in sterling.
The new shares represent approximately 8.1% of the company’s issued share capital immediately prior to the placing.
CEO Tony Smurfit said yesterday that the proceeds would be used to enable the company to accelerate investment over the next three years and improve financial flexibility.
Gold and silver miner Hochschild Mining (HOC) remained almost flat at 220.8p as it resumed its dividend and said it was on track to meet its revised production guidance, while it lowered its outlook on annual cost.
With regards to the current financial year, Hochschild said it remained on track to meet revised production guidance of 280,000-290,000 ounces of gold and 24-25 million ounces of silver.
Meanwhile, two major investment trusts issued first half reports this morning.
The Edinburgh Investment Trust (EDIN) reported net asset value (NAV) total return growth of 7.8%, above the 7% return generated by the FTSE All-Share index in the six months to the end of September. Despite this, its share price was down nearly 1% in early trading to 513p.
Meanwhile, Personal Assets Trust (PNL) recorded a NAV gain of 2.9% over the six months to 31 October, while the FTSE All-Share fell by 3.4%. The trust’s shares were up 0.2% this morning to £455 each.
AIM-quoted technology company Telit Communications (TCM:AIM) saw its share price jump more than 16% to 196p after it received a merger offer from Swiss firm u-blox.
The proposed deal valued the firm at £2.50 a share, or approximately £332.6 million, and would result in Telit shareholders owning 53% of the combined company.
Cruise operator Carnival (CCL) gained 2.2% to £11.98 after it raised $888 million through a share issue to finance the repurchasing of convertible bonds.
Real estate investment trust Segro (SGRO) dipped 0.2% to 905.8p after it received approval to list shares on the Euronext Paris stock market. It will remain listed in the UK.
Pest control giant Rentokil Initial (RTO) gained 1.6% to 523.8p as it purchased €174.3 million of its bonds from holders.
