UK blue chip stocks got off to a slow start on Monday morning, taking its cue from Asian stock markets which were subdued as China’s central bank kept interest rates on hold.
But reports that allies of a renegade general in Libya had blocked a key oil-export pipeline in the country gave a lift to oil prices. Oil stocks including BP (BP.) and Royal Dutch Shell (RDSB) initially rose on the news but quickly eased back to trade effectively flat versus last Friday’s market close.
The benchmark FTSE 100 index was down 9.32 points, or 0.12%, to 7,662.47.
Premium drink mixer maker Fevertree (FEVR:AIM) plunged over 20% to £15.59 after it revealed in a trading update that 2019 revenue growth would miss expectations following a ‘subdued’ Christmas.
Group revenue is expected to have grown around 10% last year to £260.5m, mainly supported by growth in its US, Europe and rest of the world divisions.
But investors were seemingly more concerned that revenue growth in its core market, the UK, is down 1% to £132.6m, which the company pinned on challenges in the wider retail environment, and added that the mixer category is ‘not immune from the weak consumer confidence and corresponding slowdown in spending’.
Property group Intu (INTU) fell 6.8% to 21.3p after confirming that it is looking to raise extra cash to shore up its finances.
A report in The Times suggested the embattled shopping centre giant is planning to tap investors for £1bn of emergency cash as soon as next month.
In a statement, Intu said it ‘continues to make progress in its strategy to fix the balance sheet’, which will now include an equity raise alongside its full year results at the end of February.
Matthew Roberts, Intu chief executive, said: ‘We are making good progress with fixing the balance sheet, our number one priority, and are confident we have the right strategy in place to enable us to prosper as we see continued polarisation between the best destinations and the rest.’
Defence group BAE Systems (BA.) gained 2.7% to 641p after it announced two acquisitions worth a combined $2.2bn as it looks to grow its electronics systems business.
The firm has agreed to buy Collins Aerospace’s Military Global Positioning System business for $1.925bn and Raytheon’s Airborne Tactical Radios business for $275m.
The deals are subject to the completion of the Raytheon-United Technologies Corporation (UTC) merger, as well as regulatory approval.
BAE chief executive Charles Woodburn said: ‘It's rare that two businesses of this quality, with such strong growth prospects and close fit to our portfolio, become available.’
Mining giant Anglo American (AAL) dipped 0.1% to £22.42 after it announced that it has agreed a deal to buy struggling potash miner Sirius Minerals (SXX) for 5.5p per share.
The 5.5p per share offer values Sirius at £404.9m, and represents a 34.1% premium to its share price of 4.1p on 7 January, the last business day prior to the commencement of the offer period.
To go ahead, the acquisition requires approval from 75% of Sirus shareholders at a court meeting and also approval from shareholders at a general meeting.
Sirius Minerals said, ‘If the acquisition is not approved by shareholders and does not complete there is a high probability that the business could be placed into administration or liquidation within weeks thereafter.’
Advertising company M&C Saatchi (SAA) moved 4.3% higher to 126p as it said it expected annual underlying profit to be in line with downgraded guidance it delivered last month.
In a short update for the year ended 31 December 2019, the firm also said it expects net cash to be at least £15m, well ahead of expectations, due to ‘improved cash collection processes.’
Infrastructure investment trust Sequoia Economic Infrastructure (SEQI) dropped 1.3% to 117p following plans to launch an equity raising to repay debt and help fund acquisition opportunities.
If it proceeds with an equity raise, the trust said any issues of shares will be at a price accretive to net asset value and is expected to include a material level of pre-emption rights for existing shareholders.
