UK equity markets started Monday’s trading session on a positive note despite increasing concerns regarding the rapid rise in  Covid-19 infections in Europe, where Austria has been forced to impose a lockdown on unvaccinated citizens.

The blue chip FTSE 100 is 0.32% higher at 7,246.61 while mid-caps are also in vogue, the FTSE 250 adding 0.26% to 23,553.82.

Germany and the Netherlands have also recently imposed greater restrictions in an attempt to circumvent the rapid rise in the number of Covid infections.

MINING CLOSURES SMASH HOCHSCHILD

In corporate news, mining group Hochschild Mining (HOC) saw its share price collapse after the Government in Peru voted to shutdown mines in the Ayacucho region due to environmental concerns.

Hochschild, which owns two of the mines in the area, maintains that its operations run under the highest environmental standards and will fight what it believes to be ‘illegal’ efforts by the Peruvian authorities to close the mines.

The two mines earmarked for closure account for over two-thirds of the group’s annual gold output. Hochschild shares were down nearly 50% first thing before recovering modestly, and at 9.30am are 40% off at 98.57p.

Staying in the sector, industry giant BHP (BHP) moved 1.1% higher to £19.05.4 after it agreed to merge its oil and gas portfolio with Woodside, to create a global energy company that will be listed on the ASX.

Woodside will acquire BHP’s petroleum assets in return for a 48% in the combined company. Woodside will pay just under $20bn for the assets. The deal is set to close on the second quarter of 2022 (calendar year), and the effective date of the merger is 1 July 2021.

In a separate announcement, BHP said it had approved US$1.5 billion in capital expenditure for development of the Scarborough upstream project located in the North Carnarvon Basin, Western Australia.

Video games developer Frontier Developments (FDEV:AIM) saw its share price plunge by more than a third to £15.86 after the company slashed growth guidance for the year to May 2022. Frontier now expects revenue of between £100 million to £130 million, down from the previous forecast of £130 million to £150 million.

The UK Competition & Markets Authority is apparently looking at  International Consolidated Airlines’ (IAG) planned €500 million purchase of Spain’s Air Europa to assess if the deal would harm competition in the UK.

The news saw IAG shares nudge 0.2% to 148.21p.

The new CEO of engineer Smiths (SMIN) Paul Keel has defended the company’s conglomerate structure, following plans by General Electric and Toshiba to break-up their diversified structures to extract better shareholder value.

For the time being investors seem fairly relaxed about Smiths, the share price 0.2% higher today at £15.045 and up from £13.70 since late October.

Shares in technical products and services business Diploma (DPLM) jumped by 8% to 3466p after reporting a jump in annual profit, driven by a boost from acquisitions including Windy City Wire.

For the year ended 30 September 2021, pre-tax profit jumped to £96.6 million from £66.7 million as revenue increased 46% to £787.4 million. The company recommended a 51% increase in the final dividend to 30.1 pence, taking the total dividend for the year to 42.6p, up from 30p.

Diploma also offered positive guidance for 2022 of mid-single digit revenue growth and an adjusted operating margin between 18% and 19%.

SMALLER CAP WRAP

Shares in cinema group Everyman Media (EMAN:AIM) rallied by 8.4% after it upgraded its outlook on performance following better-than-expected admissions in the first half of the year.

The company expects revenues and earnings before interest, taxes, depreciation and amortisation, for the financial year ending 30 December 2021 to exceed current market expectations.

Customer relationship management software company Cerillion (CER:AIM) has more than doubled it annual profit as a result of a series of new business wins.

New orders rose by 43% to £33.3 million. For the year ended 30 September 2021, pre-tax profit rose 181% to £7.4 million as revenue increased 25% to £26.1 million.

A final dividend of 5.00p per share was proposed, up from 3.75p, bringing the total dividend for the year to 7.1p per share, up 29%. Shares moved ahead by 4.6% to 905p in response to the news.

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Issue Date: 22 Nov 2021