Sharecast News
18 Jun, 2021 17:49

Weekly review

The FTSE 100 ended the week 116.59 points lower, closing at 7,017.47 on Friday.

Equity view

Student accommodation provider Unite said it had sold two London properties to its London Student Accommodation joint venture with GIC for £342m. Unite’s share of the deal is £171m, in line with book values and reflecting an average net initial yield of 4.0%, the company said on Friday.

Telecom Plus reported results in line with expectations on Friday, with revenue for its financial year coming in at £861.2m, down slightly from £875.8m year-on-year. The FTSE 250 utilities retailer, which trades under the Utility Warehouse brand, said its adjusted profit before tax for the 12 months ended 31 March was £56.1m, down from £60.8m in the prior year, as its statutory profit before tax slipped to £43.5m from £48.1m.

Irish food company Kerry said on Friday that it has agreed to sell its consumer foods' meats and meals business in the UK and Ireland to Pilgrim's Pride for €819m. The meats business manufactures branded and private label meats, meat snacks, food-to-go and meat-free products. Its brands include Richmond, Denny, Galtee, Fridge Raiders and Rollover. The meals business primarily serves the UK market and specialises in authentic ethnic chilled and frozen ready meals, multi-cuisine ready to cook ranges, and home delivery meals under the Oakhouse brand.

UK supermarket group Tesco reported a small rise in first quarter like-for-like sales, reflecting the lifting of Covid restrictions as more people started to eat out again. Group sales were up 1% to £13.3bn for the 13 weeks to May 29. On a two-year basis, before the pandemic struck, sales were up 8.1%. UK sales rose 0.5% to £10bn against stronger comparatives last year as the pandemic gripped the first quarter as people started panic-buying and the country was placed into full lockdown in March resulting in closed pubs and restaurants.

Trainline on Thursday reported a 324% increase in first-quarter net ticket sales as train travel started to recover from Covid-19 lockdowns. The rail-and-coach online travel platform said sales for the three months to May 31 rose to £334m from £79m a year ago. However, it was still well below the £906m reported in 2019 before the pandemic struck.

Cyber security advisor NCC Group upgraded its full-year expectations on Thursday following better-than-expected trading towards the end of the year. The company now expects revenue for FY21 to be slightly ahead of the prior year, while adjusted earnings before interest and tax are set to be towards the higher end of consensus expectations of between £33.7m and £36.2m.

Mitie said on Thursday that How Group has sold its entire stake in the outsourcer. How Group sold just under 99.4m ordinary shares, which was its entire 7% interest. According to traders, the shares were sold at around 70p each, which is a 5% discount to Wednesday’s closing share price.

Self-storage provider Safestore said on Thursday that both revenues and underlying earnings had increased by double-digits throughout the first six months of the trading year. Safestore posted an 11.1% jump in revenues to £88.1m, while underlying EBITDA shot up 18.5% to £54.4m for the period ended 30 April as closing occupancy grew 9.6 points to 80.7%. Group like-for-like storage revenues at a coupon equivalent rate were up 9.1% - or 8.3% on a like-for-like basis.

Scientific equipment maker Oxford Instruments said it had bought Germany’s Wissenschaftliche Instrumente und Technologie (WITec) for up to €42m. WITec is a Raman microscopy imaging provider based in Ulm. The deal is on a debt-free basis with €5m of the purchase price conditional on trading performance over a period of 12 months following completion.

Music rights buyer Hipgnosis said it planned to raise £150m in a share placing to fund what it called a “substantial” pipeline of songs. Shares will be issued at 121p a share, a 2.4% discount to the closing price on June 15.

N Brown said on Wednesday that Allianz Insurance is claiming up to an additional £36m in compensation in a claim against one of its subsidiaries, JD Williams. The company, which also owns Jacamo and Simply Be, is currently involved in a claim and counterclaim with Allianz Insurance regarding the sale of historical insurance products.

Apax Global Alpha said on Wednesday that the Apax X fund, in which it is a limited partner, has signed a definitive agreement to acquire a majority ownership stake in CyberGrants. The FTSE 250 company said CyberGrants provides software-as-a-service (SaaS) products for corporate social responsibility, employee engagement, and volunteer management.

Bellway reported strong demand for new homes in the second half of its financial year as buyers looked for larger properties with home-working space. The company on Tuesday lifted its forecasts for the average selling price to £300,000 from £293,000. The order book rose 20.5% to £1.89bn in the four months to June 6.

Fast fashion retailer Boohoo reported a jump in first-quarter revenues on Tuesday, thanks in part to strong performances in the UK and US, as it reaffirmed its full-year guidance. In the three months to the end of May 2021, group revenues rose 32% to £486.1m. UK revenues grew 50% to £274.6m while revenue in the US was up 40% to £131.9m.

Avast said on Tuesday that it has entered into a cybersecurity partnership with Enterprise Nation, a small business network and business support provider. The partnership, which aims to deliver key cybersecurity resources and training for more than half a million UK small businesses, will see Avast become the exclusive cyber security partner for the national network.

AstraZeneca said a study of its monoclonal antibody treatment, AZD7442, did not meet the main goal of preventing symptomatic Covid-19 in people exposed to the coronavirus in the past eight days. Trial participants were unvaccinated adults older than 18 years with confirmed exposure to a person with the coronavirus, AstraZeneca said in a statement.

Environmental infrastructure fund JLEN said it had bought Cramlington Renewable Energy Developments, which owns a biomass combined heat and power plant, and its underlying contracts for an undisclosed sum. The deal was made on a debt-free basis and represents JLEN's first investment into a large-scale biomass CHP Plant, the company said on Monday.

Outsourcing giant Serco upped its full-year guidance on Monday, boosted by strong demand for test and trace services, as it announced defence contract wins worth potentially £3.4bn. The FTSE 250 firm said that Vivo Defence Services, its 50:50 joint venture with French energy firm Engie, had secured the contacts under the Future Defence Infrastructure Services programme to maintain the Ministry of Defence’s built estate across more than 200 sites and 19,000 buildings.

Saga said on Monday that its turnaround plan remained on track, but conceded that the resumption of travel was a priority. Updating on trading, the insurance and travel group - which specialises in the over 50s - said motor and home policy sales between 1 February and 13 June were down 2% on the same period a year previously. However, it added that trading had improved since the start of May and sales were now expected to be broadly flat over the first half.

Sequoia Economic Infrastructure said on Monday that its net asset value had improved 0.13% on the month for May, to 102.41p per share. The FTSE 250 specialist infrastructure investor said interest income added 0.48% and foreign exchange movements advanced the net asset value by 0.01p per share, while asset valuations themselves were 0.36p lower month-on-month.

Economic news

UK retail sales unexpectedly fell in May as restaurants reopened and people shifted some of their spending from food stores, although they remained above pre-pandemic levels. Figures released earlier by the Office for National Statistics showed retail sales declined by 1.4% on the month, versus expectations for a 1.5% increase. Sales at food stores saw the biggest drop, with volumes down 5.7% as the hospitality industry reopened after Covid restrictions eased and people returned to eating and drinking in pubs and restaurants.

HMRC said on Friday that British food and drink exports to the EU fell by £2bn in the first quarter of 2021, revealing structural problems with Brexit. According to the data, sales of dairy products plummeted by 90% and exports of cheese were down by two-thirds when compared with 2020.

The UK’s chief data protection regulator, the Information Commissioner's Office, has warned over reckless and inappropriate use of live facial recognition (LFR) in public places as it could risk mass data collection. The information commissioner, Elizabeth Denham, said in a statement on Friday that a number of investigations already undertaken by her office into planned applications of the tech have found problems in all cases.

Research published by the Financial Conduct Authority on Thursday, estimated that 2.3m adults now hold crypto assets, which was up from 1.9m in 2020. Around 78% of adults have now heard of crypto assets, up from 73% in a year, the report also revealed.

Ryanair has teamed up with Manchester Airports Group to bring legal action against the UK government over its “traffic light” system for Covid-19 restrictions. The move, which has been done as an attempt to force the government to relax restrictions to save the summer season for airlines, is expected to receive support from other airlines.

The number of EU citizens searching for employment in the UK has fallen by over a third since Brexit. According to research by Indeed, UK employers are struggling to recruit staff and jobseekers from the bloc were down by 36% in May compared to the same month in 2019.

UK inflation has jumped past the Bank of England’s target for the first time in nearly two years as more businesses reopened after Covid restrictions were eased, according to figures released on Wednesday by the Office for National Statistics. Consumer price inflation rose to 2.1% in May from 1.5% in April, coming in above the BoE’s 2% target and consensus expectations for a reading of 1.8%. It also marked the highest consumer price inflation reading since July 2019.

House prices eased in April, official data showed on Wednesday, ending eleven consecutive months of rises. According to the Office for National Statistics, month-on-month house prices fell 1.9%, or by 2.2% on a seasonally-adjusted basis.

Funeral directors and crematorium operators will need to make their prices more clear to customers or risk court action, the Competition and Markets Authority said on Wednesday. From 16 September, all funeral directors must display a standardised price list at their premises and on their website. The list must include the headline price of a funeral, the price of the individual items comprising the funeral, and the price of certain additional products and services.

The UK unemployment rate fell in April as the economy began to reopen, according to figures released on Tuesday by the Office for National Statistics. The unemployment rate declined to 4.7% in the three months to April, from 4.8% in March and in line with consensus expectations. Non-essential shops and outdoor hospitality reopened in April, while indoor hospitality resumed in May.

International events

The European Council has recommended that non-essential travel bans be lifted from 14 countries, including the US, in a move that would permit citizens from the listed nations to vacation in Europe with more ease. On Friday, the European Council said member states should consider gradually lifting travel restrictions at their external borders for residents of Albania, Australia, Israel, Japan, Lebanon, New Zealand, Republic of North Macedonia, Rwanda, Serbia, Singapore, South Korea, Thailand, USA and China, subject to confirmation of reciprocity.

European start-ups raised €43.8bn in investment in the first six months of 2021, breaking the record of €38.5bn invested in all of 2020. According to data shared with CNBC, start-ups on the continent have surpassed the record of euros invested in 2020 despite the fact that the number of venture deals signed so far is around half the amount agreed in 2020.

Manufacturing activity in the US mid-Atlantic region continued growing at a robust pace in June, the results of one of the most closely-followed surveys for the sector showed. The Federal Reserve Bank of Philadelphia's factory sector index dipped from May's reading of 31.5 to 30.7 for June.

Hong Kong’s Apple Daily’s newsroom was raided on Thursday by 500 officers over alleged violations of China's national security law. Authorities sifted through reporters’ computers and notebooks around dawn and arrested five executives of the newspaper. Around 38 computers were seized by police.

Weekly jobless claims rose last week for the first time since April. According to the Department of Labor, initial unemployment claims increased by 37,000 over the week ending on 12 June to reach 412,000. Economists at Barclays Research had forecast a reading of 350,000.

Germany’s Ifo Institute has cut its growth forecasts for the country this year, citing supply bottlenecks in manufacturing. The Ifo Institute now expects the German economy to grow by 3.3%, down 0.4 percentage points from its March forecast.

Returning to the 2015 Iran nuclear accord will have to wait until the formation of a new Iranian government, said the head of the UN nuclear watchdog on Wednesday. Rafael Grossi, the director-general of the International Atomic Energy Agency, also said that to finalise the deal there needed to be a strong political will to do so from all parties.

China’s ongoing economic recovery appeared to have stumbled on Wednesday, after official data came in below expectations. According to the country’s National Bureau of Statistics, growth in factory output slowed for the third consecutive month in May, to 8.8% compared to 9.8% in April. The consensus had been for growth of 9.2%.

Housing starts rose last month but by less than anticipated, alongside a continued decline in permits for new construction, pointing to a residential market that was coming off the boil. According to the Department of Commerce, housing starts increased at a month-on-month pace of 3.6% to reach an annualised rate of 1.572m (consensus: 1.65m).

The cost of goods purchased overseas jumped past forecasts last month, even if those exported increased in price even faster. According to the Department of Labor, the US import price index jumped by 1.1% in May when compared with the month before. Economists had forecast an increase of 0.7%.

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Important Legal Notice about News Sources

Pilling and Co Stockbrokers Ltd. is not responsible for the content or accuracy of third party news articles and we may not share the views of the author or publisher.

We provide third party news for your convenience and information only and make no representation or endorsement whatsoever and hereby exclude all liability for any loss or damage that may be incurred by you as a result of your access or use. Please note that third party content may be subject to terms and conditions imposed by the third party owner of that content.