UK investors were in upbeat mood on Friday, helped by a rebound in US markets overnight after two days of losses, an encouraging retail sales report and a slew of positive company updates.
At 8.30am the FTSE 100 index of leading stocks was up 60 points or 0.9% to 6,735 points, led by miners and consumer-facing ‘recovery’ stocks.
Sterling was steady at $1.376 while Brent crude futures gained 1% to $62.65 per barrel and gold ticked higher to $1,723 per ounce.
COMPANY NEWS
Mining group Kaz Minerals (KAZ) gained 2.9% to 864p after the firm revealed it had received an improved offer of 850p per share from Nova Resources, valuing the business at £4 billion.
The increased and final offer is accompanied by a special dividend of 27c per share, taking the total value of the offer to 869p per share.
Insurer Aviva (AV.) announced the sale of its Polish business to Germany’s Allianz for €2.5 billion in cash, increasing its own net asset value by £1.8 billion or 46p to 493p per share.
Chief executive Amanda Blanc described the deal as ‘an excellent conclusion to the refocusing of our portfolio announced just eight months ago’. The firm has now sold eight non-core businesses for £7.5 billion in cash. Shares gained 1.6% to a 12-month high of 406.5p.
Industrial equipment maker Smiths Group (SMIN) posted a 5% fall in organic revenues to £1.15 billion for the first half to the end of January although it pointed to an ‘improving trend’ in the second half.
Cash generation was positive, leading to a 6% rise in the interim dividend to 11.7p per share. The stock was the best performer on the FTSE, rising 5% to £15.38, towards the top of its recent trading channel.
Bus and rail operator Stagecoach (SGC) reiterated its outlook for the year to May although chief executive Martin Griffiths admitted it was ‘difficult to accurately forecast the precise timing and extent of how our profitability will recover as we emerge from the COVID-19 situation’.
Its UK regional bus operations are still running at less than 50% of pre-Covid revenues, while its London bus unit it back to full service and should generate better than expected operating profits. Shares chugged 1.4% higher to 95p.
Medical devices firm TT Electronics (TTG) announced the MHRA had approved its Virolens rapid Covid-19 screening device for sale in the UK. Shares gained 1.1% to 235p having already had a stellar run from 211p this week.
Sales are dependent on TT’s partner iAbra converting expressions of interest into sales, therefore the firm cautioned there was ‘a wide range of potential commercial outcomes and hence no certainty as to the financial impact on TT’.
AIM ROUND-UP
Infrastructure services group Renew Holdings (RNWH:AIM) said first half trading was ahead of expectations, with ‘no material impact on trading’ from the latest lockdown, and it was seeing strong demand for all its services. Shares popped 3% to 536p.
The firm also announced the £29.5 million acquisition of water services business J Browne to boost its utility and infrastructure operations in the south east. ‘The acquisition represents an excellent strategic fit, adding material scale to Renew's water business and brings new water clients into the Group’, said chief executive Paul Scott.
Real estate investment trust Urban Logistics (SHED:AIM) revealed it had sold a portfolio of assets for £30 million, generating a total return of 78.8% since purchase and a 35% uplift to the value of the assets as of last September. Shares added 1.3% to 149p.
Software firm Idox (IDOX:AIM) released a positive first quarter trading update showing similar revenue and earnings growth to the same period a year ago with ‘no significant impact on the business from the third lockdown’.
The company also reported a ‘material reduction’ in its net debt, from £27 million to £18 million, and confirmed it would pay a final dividend for last year. Shares were unchanged in early trade at 62p although volume was extremely light.
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