UK stocks edged higher in early trading as investors looked to the Bank of England’s monetary policy committee meeting at lunchtime for signs that official loose-money policy would continue for the foreseeable future.

Despite a sharp spike in US 10-year yields and a drop in US index futures following a very ‘dovish’ Fed meeting last night, the FTSE 100 index of leading stocks gained 0.1% to 6,770 points with mining and financial stocks rallying while utilities weighed.

Sterling was steady at $1.3970 while Brent crude oil prices slipped 1% to $67.25 per barrel and gold eased 0.5% to $1,740 per ounce.

COMPANY NEWS

Mobile network operator Vodafone (VOD) priced the Frankfurt initial public offering of its Vantage Towers business at €24 per share, towards the low end of its initial range of €22.5 to €29.0.

The float raised €2.3 billion to help reduce group debt and valued the towers business at €12.1bn. Vodafone shares traded sideways at 137p while Vantage shares traded higher at €24.80.

Electricity transmission company National Grid (NG.) announced it had agreed to buy the UK’s largest electricity distribution business, Western Power Digital, from its US parent PPL for £7.8 billion.

In exchange, National Grid is selling the Narragansett Electric Company in the US to PPL for $3.8 billion or £2.7 billion, marking a shift in its portfolio back towards the UK and towards electricity supply. Shares dropped 3% to 807p.

Online gambling group 888 Holdings (888) was a big gainer, with shares climbing 8% to 360p after the firm posted a 52% increase in revenues to $850 million for the year to December and almost a 70% rise in EBITDA.

The firm cautioned that regulatory and compliance changes could result in a $70 million to $100 million headwind to revenues for the current year, but said it still expected to grow its turnover.

Internet grocery retailer Ocado (OCDO) posted a trading update for its retail joint venture with Marks & Spencer (MKS) showing a 40% rise in sales in the quarter to the end of February.

The company cautioned that sales and EBITDA growth is likely to normalise in coming quarters as the company laps strong sales at the onset of the pandemic. Meanwhile it is rolling out new standard and mini customer fulfilment centres and is looking for up to a dozen sites for its new micro CFCs. Shares inched up 0.6% to £20.96.

Contract drug maker Vectura (VEC) posted better than expected results for the year to December, with sales up 6.9% to £190.6 million and operating profits of £132.8 million compared with losses of £27 million in the same period a year ago.

Thanks to its strong performance, the firm will pay a £115 million special dividend later this year. Shares climbed 3.4% to 120p.

AIM NEWS

Mixer supplier Fevertree Drinks (FEVR:AIM) released results for 2020 which showed group sales down just 3% to £252 million as stronger than expected off-trade sales made up for the absence of on-trade sales for much of the period.

The company also reinstated financial guidance for the current year, with sales seen rising between 12% and 16% and gross and EBITDA margins consistent with 2020. However, the market was anticipating a stronger sales outlook and shares slumped 7% to £23.53.

Electrolyser manufacturer ITM Power (ITM:AIM) announced it had made its first sale in Japan with a deal to supply a 1.4MW system to Sumitomo Corp. The deal is expected to be ‘an important reference point’ as Sumitomo is active in several green hydrogen projects in the lucrative Japanese market. Shares added 2.2% to 440p.

Video game services provider Keywords Studios (KWS:AIM) announced it had made its entry into the Australian market with the purchase of an 85% stake in games developer Tantalus for a total consideration of up to $46.8 million (£33.4 million).

Tantalus includes Age of Empires, The Legend of Zelda:Twilight Princess and Mass Effect among its credits. Keywords shares gained 1.2% to £23.54.

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Issue Date: 18 Mar 2021