UK shares remained under pressure on Monday lunchtime as investor hopes for an economic rebound were offset by increasing inflationary pressures and rising interest rates.

Mining stocks were in demand as well as a handful of banks and travel and leisure companies, while healthcare stocks and online retailers were weak. Later this afternoon Boris Johnson is expected to outline the government’s exit strategy from Covid-19 restrictions.

At 12pm the FTSE 100 index of leading shares was down 0.5% at 6,594 points.


Veterinary drug maker Dechra Pharmaceuticals (DPH) reported strong results for the six months to December with revenues up 21.8% to just under £300 million thanks to robust demand in the US and Europe.

However, the firm said it was ‘starting to see the post-Brexit inventory build unwind’ and therefore it expected slower second half growth. The shares nudged-up 0.3% to £36.22.

Pub group Mitchells & Butler (MAB) published an update on trading since the end of September showing managed sales down almost 70% on the previous year and a monthly cash burn of between £30 million and £35 million since the start of January.

Given this cash squeeze, the firm has drawn all of its banking facilities and has delayed pension contributions for the whole of the first quarter until April. Last week it announced a £350 million capital raise to see it through to the end of lockdown and the reopening of the pub sector. The shares dropped 0.8% to 320.5p.

Security group G4S (GFS) tumbled 10% to 242.5p after suitor Gardaworld declined to raise its 235p per share bid for the UK firm, saying it would ‘not overpay for a company with systemic ESG issues that continue to come to light’.

Gardaworld claimed that integrating G4S would require ‘sizeable resources’, while addressing its issues ‘will require greater investment, and without satisfactory engagement from G4S we have been unable to complete our due diligence’.

The Canadian firm's withdrawal leaves the way clear for Allied Universal, which had previously offered 245p per share or £3.8 billion to take over G4S.

Shares in hygiene products maker Tristel (TSTL:AIM) climbed 1.3% to 607.6p after company posted a 15% rise in revenues for the first half to December and raised its interim dividend by 12% to 2.62p per share.

Investors seemed unfazed by the company’s admission that sales of medical device disinfectants so far this year were below budget due to fewer patient examinations under Covid, and that it had little visibility on a return to pre-pandemic levels in the second half.

Shares in immunotherapy and diagnostics firm Avacta (AVCT) jumped 8.2% to 198p after the company clarified recent press talk that the UK government was about to take up the firm’s lateral-flow rapid antigen test.

Clinical data showed an ‘excellent performance of the test in identifying patients with an infectious viral load’, and the firm is progressing to full clinical validation with the aim of bringing the test to market in Europe by the end of March.

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Issue Date: 22 Feb 2021