London’s FTSE 100 slumped on Friday morning, led by sharp falls in travel and leisure stocks after the UK re-imposed travel restrictions on several African countries following a potentially more infectious strain of Covid-19.
At 08:58 am, the blue chip benchmark was down 200 points, or 2.74%, to 7,110.22 with aero-engineer Rolls-Royce (RR.), British Airways-owner International Consolidated Airlines (IAG) and InterContinental Hotels (IHG) among the hardest hit with investors fearing the new Covid variant will cause widespread mobility restrictions.
Royal Dutch Shell (RDSB) and BP (BP.) both fell as oil prices declined on concerns over reduced mobility and a more gloomy outlook for the global economy, should the new Covid variant prove as problematic as some fear.
In the FTSE 250, shares in travel-related plays ranging from Carnival (CCL), TUI (TUI) and EasyJet (EZJ) to airports and train stations-based retailer WH Smith (SMWH) all took a battering.
Retailers were also on the back foot, with panic surrounding the new variant likely to deter people from visiting physical stores to snap up Black Friday deals.
CORPORATE NEWS
Value sofas-to-carpets seller ScS (SCS) cheapened 15% to 212p after reporting a reduction in store footfall and conversion over the past seven weeks with consumers spending less on big ticket items.
ScS attributed this to a change in behaviour, ‘with consumers shopping earlier for Christmas when compared with previous years’. The Sunderland-based sofas seller also warned extended product lead times across the furniture and wider retail industry are also ‘having an impact on current purchasing trends’.
SCS reported a 10.6% like-for-like sales fall year-on-year for the 16 weeks ending 20 November following an ‘unprecedented period of pent-up demand at the beginning of the prior year’, although like-for-likes were up 0.9% on a two year basis.
Family-controlled car dealer Caffyns (CFYN) revved up 8.8% to 544p after resumed its dividend off the back of a jump in first half profit as the lifting of pandemic restrictions boosted performance.
‘The company’s forward-order bank for new cars is at a historically high level, which is especially encouraging for 2022 when it is hoped that new car availability will improve’, said Caffyns.
However, it also warned that in the short-term, ‘new cars are expected to remain in short supply and the high level of national Covid-19 infections continues to be a concern as winter approaches. Given these uncertainties, the board remains cautious for the second half of the financial year.’
Robotic process automation company Blue Prism (PRSM:AIM) rose 6.3% to £12.92 after it recommended an increased, final takeover offer pitched at £12.50 from Vista, news that emerged after yesterday’s market close.
AROUND THE MARKET
Elsewhere, Essentra (ESNT) softened 2% to 307p as it kickstarted a strategic review of its packaging division that will run in parallel with the previously announced strategic review of its filters business as part of a move to become a pure play components business.
Essentra expects that both reviews are likely to conclude in Q2 2022 at the earliest and also announced that finance director Lily Liu will be leaving the company to take up a new role at Synthomer (SYNT).
Energy group Parkmead (PMG:AIM) plunged 12.8% lower to 41p as the company reported wider losses owing to a £10.9 million write-down of assets related to the relinquishment of licences in the UK North Sea.
Gasification solutions minnow Eqtech (EQT:AIM) was marked up 7.6% to 1.43p after inking a collaboration agreement with consulting and engineering firm Wood to jointly target opportunities to develop waste-to-synthetic natural gas and waste-to-hydrogen solutions.
‘This collaboration agreement with Wood is an important start to our entry into these growth markets,’ insisted Eqtech.
‘Wood’s teams are among the very best at what they do, and we are excited to have the opportunity to work shoulder-to-shoulder with them to bring our waste-to-syngas capabilities to new solutions in more geographies.’
And Northern Bear (NTBR:AIM) nudged 1.7% higher to 59.5p as the company swung to a first half profit as higher gross margins bolstered performance.
For the six months to 30 September 2021, pre-tax profit was £1.4 million compared with a loss of £2.4 million last year as revenue increased to £30 million from £20.1 million.
Looking ahead, the company said it had ‘positive’ outlook for the second half of the financial year.
‘Our forward order book remains strong and should support our trading performance in the coming months, subject to the ongoing supply chain and staffing challenges noted above and the uncertainty over the long-term outlook for the COVID-19 pandemic,’ the company said.
