London’s FTSE 100 started on the front foot ahead of the Easter bank holiday weekend as investor sentiment turned positive on optimism over the impact of a $2 trillion stimulus package in the US, while a strong update from clothing retailer Next (NXT) also added a layer of shine to the index.
The UK’s benchmark index gained 0.6% to 6,753.85, while the midcap FTSE 250 added 0.7% to 21,671.79.
It comes after stocks on Wall Street briefly touched all-time highs overnight as the White House released details of US President Joe Biden’s plan to spend $2 trillion on upgrading infrastructure in the country, in a plan that aims to boost funding for scientific research and broadband as well as infrastructure and healthcare.
Biden pledged to ‘advance US leadership in critical technologies’, as well as ‘address a stark digital divide’ and ‘build high-speed broadband infrastructure to reach 100% coverage.’
NEXT’S ONLINE SALES BOOM
In company news, Next was the biggest gainer in the FTSE 100, rising 2.5% to £80.66 after it raised its profit guidance for its 2021/22 financial year to £700 million following stronger than expected online sales.
It said in the first eight weeks of its new financial year, online sales are up more than 60% on two years ago and added, ‘This overachievement plus the expected transfer of sales from retail during the additional two weeks of lockdown, are expected to add £30 million of profit. As a result, we are raising our central profit guidance by £30 million from £670 million to £700 million.’
It comes as the firm reported total group sales decreased by 15% to £3.6 billion in the year ending January 2021, and pre-tax profit of £342 million, down from £729 million the previous year, in line with guidance issued in its trading statement in January.
Military equipment maker Avon Rubber (AVON) increased 2.1% to £32.28 after raising the value of an existing contract with the US army by an estimated $28.4 million.
‘As part of this modification the U.S. Army has placed an order under this contract worth $18.9 million. Deliveries under this modification are expected to commence in our current financial year and will contribute to our military revenues for the year,’ the company said.
Infrastructure investor John Laing (JLG) edged 0.9% higher to 316.2p as completed the sale of its Irish wind farm, Glencarbry, to renewable energy investment trust Greencoat Renewables (GRP) for €31.2 million (£26.6 million).
This sale value represented a 6% premium to John Laing’s book value for the asset at 31 December 2020, and is equivalent to a money multiple on its investment of 1.3 times. Greencoat Renewables gained 3.5% to €1.19.
In a separate agreement, John Laing also said it had made a commitment to invest up to €30 million to acquire control of two businesses that are in the early stages of fibre-to-the-premises rollout programmes. It also agreed to fund the initial investment in the fibre roll-out programmes over the next 12 months.
OTHER NEWS
Music rights investor Hipgnosis Songs Fund (SONG) traded flat at 125.6p having been granted approval by HMRC to convert to an investment trust company. The conversion takes effect from today and it will now be treated as being resident in the UK for tax purposes.
Hipgnosis Songs Fund said it applied to become an investment trust company to ‘mitigate the recently increased scope of Guernsey’s economic substance rules, which now apply to Guernsey entities (including Guernsey tax exempt vehicles) that are self-managed collective investment schemes.’
AIM-listed healthcare diagnostic company Diaceutics (DXRX:AIM) said it had won a data licensing contract with a pharmaceutical company to provide Covid-19 testing data insights in the US.
It said the contract win ‘highlights that the group is in a position to address the imminent opportunity presented by the COVID-19 treatment market using its DXRX data solution capabilities.’
The financial details of the contract weren’t disclosed and the company said the contract value does not change management’s expectations of performance for the current financial year.
Telecoms company Airtel Africa (AAF) rose 2.5% to 81.3p on news it has signed an agreement under which Mastercard would invest $100 million in its Airtel mobile commerce business at a $2.65 billion valuation.
