Leading UK shares recorded a decent gain on Monday following an up and down day of trading after taking their cue from a strong start on Wall Street.
The UK’s benchmark FTSE 100 closed 0.35% higher to 6,963.12, which comes after US stocks opened positively ahead of a big week for company earnings across the Atlantic.
A total of 181 companies on the S&P 500 announce earnings this week and the index got off to a decent start with a 0.25% gain, while the tech-heavy Nasdaq rose a solid 0.59%.
Also helping sentiment among UK stocks was some positive company updates, while earnings upgrades among midcaps helped the more domestically focused FTSE 250 close 0.92% higher to 22,577.34.
COMPANY NEWS
In company news, shares in educational material and services firm Pearson (PSON) climbed 3.5% to 829.4p after the firm said first quarter sales rose 5% thanks to a 25% increase in global online learning.
Pearson said it still expected its full year performance to be in line with its 2021 outlook outlined on 8 March.
Pharma company AstraZeneca (AZN) said its lung cancer drug Tagrisso had been recommended for marketing authorisation in the European Union.
The endorsement followed positive results from the Adaura phase III trial evaluating the efficacy of Tagrisso in treating adult patients with early-stage epidermal growth factor receptor-mutated non-small cell lung cancer.
Meanwhile, the company’s drug to treat neurofibromatosis, a debilitating genetic condition causing disfigurement and visual impairment, was also recommended for approval in the European Union.
In a separate statement, AstraZeneca said a Melody phase III trial of nirsevimab, used to treat RSV, met its primary goal. RSV is a common, contagious virus that infects the respiratory tract causing millions of hospitalisations globally.
Despite the raft of positive news, Astra shares dipped 0.45% to £75.30.
Asset manager Standard Life Aberdeen (SLA) gained 1.7% to 277p as it revealed plans to change its name to 'Abrdn' (pronounced 'Aberdeen') to reflect its new identity as a 'modern, agile, digitally-enabled brand'.
Financial services company Informa (INF) gained 3.75% to 570.6p as it laid out plans to combine its existing FBX business with Novantas to create a ‘leading competitive intelligence and specialist data business serving the retail banking markets.’
The agreement is structured as a takeover of Novantas on a cash- and debt-free basis by Informa and private equity firm Inflexion and should complete by the end of June 2021, subject to regulatory approvals.
SPLIT CONFIRMED
Tate & Lyle (TATE) jumped 5.9% to 801.8p as it responded to media speculation about a possible split its primary products business from its core food and beverage business by confirming it was mulling a potential separation.
The board said it believed that if a transaction of this nature was completed it would enable the two businesses to 'focus on their respective strategies and capital allocation priorities' and create the opportunity for enhanced shareholder value.
EARNINGS BEATS
Shares in engineering company IMI (IMI) surged 11.1% to £15.52 after the board upgraded its guidance for annual earnings following ‘strong’ performance in the first quarter of the year amid improving trends in across its major end markets.
For the full year, guidance for adjusted earnings per share was lifted to between 81p and 87p from 75p to 82p previously. The company also said it was confident it would become a sustainable 18% to 20% margin business over time.
Shares in recruitment and training group Staffline (STAF) flew 7.1% higher to 74p after the company said first-quarter underlying profit had more than doubled, beating expectations and providing it with confidence for the full year.
Underlying operating profit for the three months through March jumped 133% year-on-year to £1.4 million, amid a 0.2% rise in revenue to £227.9 million, the company said in a trading update.
It added that a significant restructuring undertaken in 2020 had generated around £15 million in overhead cost savings.
Data analytics company Ixico (IXI:AIM) said it expected to report higher first-half revenue after it won £9.4 million of contracts in the first half, up from £4 million last year, pushing the shares up 11.3% to 92.3p.
PROFIT DOWNGRADE
Shares in infection control product group Tristel (TSTL) sank 14.5% to 573p after the company downgraded its annual profit guidance, blaming lower-than-expected sales and a rise in its cost base.
The company was experiencing a fall in demand for patient examinations due to Covid-19, which was only partially partly offset by surface disinfectant product sales.
Tristel said it was confident sales and profits growth would resume next year and it expected to declare a final dividend of 3.93p, giving a total of 6.55p for the year.
A list of FTSE 250 movers can be seen HERE
