London’s FTSE 100 rallied 84 points to 6,044.21 on Wednesday as the Bank of England cut interest rates by 0.5%, returning the cost of borrowing to a record low of 0.25% with the coronavirus continuing to rock confidence.
Investors will be looking for further stimulus when new chancellor Rishi Sunak delivers the first annual budget of the Boris Johnson era later today.
In corporate news, construction company Balfour Beatty (BBY) bounced 11.8% higher to 246.8p as investors welcomed a rise in full year profit, with chief executive officer (CEO) Leo Quinn’s Build to Last transformation programme delivering results, as well as a 33% hike in the dividend to 6.4p.
Turning to the coronavirus, Balfour Beatty assured that at this point in time, ‘all sites and offices in the UK, the US and Hong Kong remain open’. However, it is ‘too early to fully assess any impact of the outbreak on the operational and financial performance of the group.’
Security giant G4S (GFS) slumped 12.2% to 116.5p after lurching into a statutory loss for 2019 after taking a £291m charge that mainly related to its UK cash business. The services contractor sad it has cut back operations in high risk areas to mitigate the spread of the coronavirus but stressed the impact on the group has proved ‘immaterial’ so far.
Travel company FirstGroup (FGP) firmed 4.5% to 105.9p after beginning a formal process to sell its North American contract businesses following pressure from activist investor Coast Capital to unlock value.
B&M European Value Retail (BME) improved 3.3p to 309.2p after the value variety goods purveyor sold its loss-making German business Jawoll, with the disposal of its 80% stake to a consortium led by AC Curtis Salta set to rake in €12.5m.
Smart infrastructure solutions company Costain (COST) cheapened the best part of 20% to 127.8p after posting a slump in underlying pre-tax profit for 2019 and announcing plans for a £100m capital raise to shore up its balance sheet.
Also in demand was Breedon (BREE:AIM), the construction materials outfit bid up 5.6% to 91.8p on strong annual results showing pre-tax profit up 18% to almost £95m.
There was also a confident outlook statement from CEO Pat Ward, who insisted his charge is in ‘excellent shape’, is well placed to benefit from UK government infrastructure investment and has contingency plans in place with regards to the coronavirus.
Concrete levelling technology company Somero Enterprises (SOM:AIM) skipped 13% higher to 240p, despite posting a fall in annual profit owing to wet weather in the US, as the company said performance had recovered faster than hoped in the second half as the weather improved.
Home collect credit provider Morses Club (MCL:AIM) tumbled 30.5% to 73p after it warned that annual profit would be 18%-to-23% below consensus market expectations.
