UK stocks just about managed to hold onto gains on Thursday as markets shrugged-off inflation worries despite US core inflation reaching its highest level since 1992 with the core rate reaching 3.8%, well above the Federal Reserve’s 2% target.
In contrast the European Central Bank kept its foot on the monetary gas by indicating it wanted to increase the rate of asset purchases to fight the threat of negative inflation.
At the close the UK’s benchmark FTSE 100 index was 0.1% higher at 7,088 points while the midcap FTSE 250 index was down 0.7% to 22,609 points.
TELECOMS DEALMAKER TAKES BT STAKE
In company news, telecoms giant BT (BT.A) shot up 6.6% to 195.2p as Patrick Drahi, a billionaire telecoms dealmaker, has taken a 12.1% stake in the company in a bid to capitalise on its faster broadband roll out in the UK.
The stake makes the French-Israeli businessman BT’s largest shareholder. He bought 1.2 billion shares through a newly created UK arm of his Altice telecoms company, which he wholly owns and controls.
BT has downplayed fears of a major shakeup and said: ‘BT Group notes the announcement from Altice of their investment in BT and their statement of support for our management and strategy.
‘We welcome all investors who recognize the long-term value of our business and the important role it plays in the UK. We are making good progress in delivering our strategy and plan.’
AUTO TRADER RESUMES DIVIDEND
Digital automotive marketplace Auto Trader (AUTO) jumped 6.6% to 615.6p as it resumed its dividend despite reporting lower annual profit, with trade revenue dented by the company’s decision to provide free and cut-price advertising to retail customers.
For the year ended 31 March 2021, pre-tax profit fell £157.4 million as revenue slipped 29% to £262.8 million year-on-year. Trade revenue was down 31% to £225.2 million, as a ‘result of the decision to provide free advertising to our retailer customers in April, May, December and February and at a discounted rate in June,’ the company said. Average revenue per retailer declined by 32% to £1,324.
The company proposed a final dividend of 5p per share. In the year ahead, the firm said it expects to deliver high single digit growth on the previous year’s average revenue per retailer and operating profit margins that are in line with its financial year ended 31 March 2020.
Safety equipment maker Halma (HLMA) closed unchanged at £26.80 despite reporting a rise in annual profit, largely driven by cost cuts and a boost from the £21.6 million gain on the sale of Fiberguide Industries.
For the 12 months to 31 March 2021, pre-tax profit was up 12.9% to £252.9 million year-on-year as revenue fell 1.5% to £1.32 billion. The total dividend per share for the year was up 7%.
Looking ahead, the company said it had started the year well, with organic constant currency revenue for the period from the beginning of January to the end of May up 10% year-on-year.
Online trading brokerage CMC Markets (CMCX) hiked its dividend after reporting that annual profit more than doubled as a wave of new clients bolstered trading revenue. The shares added 1.7% to 497.5p.
For the year ended 31 March 2021, pre-tax profit was up 127% to £224.0 million year-on-year as net operating income jumped 63% to £409.8 million.
Outsourcing services business Capita (CPI) gained 1.3% to 40.2p as it said it had won a £58 million contract renewal with Tesco Mobile. Capita would be deploying and integrating new advanced technology as part of its ongoing operations to manage all inbound customer service, telesales and renewal calls.
Real estate investment trust LXi REIT (LXI) was unchanged at 145.2p as it confirmed it had exchanged contracts on the forward funding acquisition of a garden centre in Reading for £19 million. The acquisition price reflected an accretive 5.3% net initial yield.
Facilities management group Mitie (MTO) surged 5.9% to 75.9p after reporting a 19.1% rise in revenue for the 12 months to the 31 March, 2021, rising to £2.59 billion, in what the company described as a ‘defining year of strategic progress’.