UK shares made tentative gains on Thursday as fractious Brexit talks continued with a new deadline of Sunday. The UK economy reported its slowest expansion since returning to growth in May with GDP growing 0.4% month on month in October.

In the US, shares in Facebook dropped more than 5% as it faced a new antitrust lawsuit from the US Federal Trade Commission.

Meanwhile food delivery company DoorDash spiked over 80% on its market debut continuing the strong performance of initial public offerings (IPO’s).

The pound was 0.7% weaker against the US dollar at $1.33. Later today the European Central Bank is expected to deliver more monetary stimulus to counter the effects of the latest lockdowns.

At 08.30 the FTSE 100 was 0.25% higher at 6,590 points.

COMPANY NEWS

Industrial products distributor Electrocomponents (ECM) said it will raise £180 million via a placing of new shares representing around 5% of existing capital. A retail offer on PrimaryBid platform will accompany the placing.

The money will be used to purchase Synovos, a leading supply solutions player in the Americas for around £110 million and Needlers a leading provider in safety, hygiene and personal protective clothing for £40 million. The shares added 2% to 832p.

Sporting goods retailer Frasers (FRAS) increased the bottom end of its full-year guidance, forecasting a 20% to 30% improvement in underlying earnings before interest, taxes, depreciation and amortization (EBITDA), up from 10%-to-30% announced in August.

For the 25 weeks to 25 October, pre-tax profit rose 17.6% to £106.1 million year-on-year, while revenue slipped 7.4% to £1.89 billion. The shares gained 5.7% to 463.65p.

Travel company TUI (TUI) said full-year revenues to September dropped 58% to €7.9 billion producing an operating loss of €3 billion compared with a profit of €3.9 billion last year.

As a result of the increasing travel restrictions and later booking behaviour of some customers, the company expects to operate an adjusted capacity of 20% for Winter 2020/21 which will be weighted towards its financial Q2. It continues to expect to operate an adjusted capacity of 80% for summer 2021. The shares dipped 2% to 433p.

Train and bus operator First Group (FGP) said first-half revenues to September fell 24% to £3.1 billion and adjusted operating profit dropped 88% to £10.4 million reflecting substantial reduction in passenger volumes during lockdowns.

The company said it had liquidity of £805 million in free cash and committed undrawn facilities consistent with April levels.

The group insisted it is now in a more robust financial position even in a range of potential downside scenarios. The shares motored 2.6% to higher to 70.5p.

In a trading update Automotive retailer Inchcape (INCH) upped its annual profit outlook and said it would consider resuming its dividend at the year-end. This followed a better-than-expected performance in November as the impact from the national lockdown was not as bad as feared.

The company said it expected pre-tax profit, excluding exceptionals, would be materially ahead of the published market consensus of £108 million. The shares accelerated 2% to 643.5p.

Online retailer Ocado (OCDO) said Ocado Retail, its joint venture with Marks & Spencer (MKS), grew revenues by 35% in the 13 weeks to 29 November reflecting strong demand.

Retail revenues were £580 million with an average of 360,000 orders transacted per week, up by 3.0%. Ocado shares dropped 4.6% to £22.19 while M&S shares were 2% weaker at 140p.

Shares in pub group Marston’s (MARS) fell 3% to 68p after reporting full-year revenues to 3 October down 30% to £821 million and a pre-tax loss of £22 million.

After a financial review the company has decided to continue with its debt reduction plans with a revised target to reduce net debt to below £1 billion by the 2024 financial year.

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Issue Date: 10 Dec 2020