The new trading week got off to a disappointing start with the UK’s flagship stock market index in negative territory. Having initially seen modest gains on Monday morning, by midday the FTSE 100 had fallen 0.6% to 7,096, dragged down by weakness in banks and oil producers.
Brent Crude oil dipped 0.3% to $75.98 per barrel while gold also eased back by the same percentage points to trade at $1,777 per ounce.
Despite the small decline in the value of oil, the commodity remains at elevated levels which is negative for the airline industry.
The fact that the sector faces higher fuel costs, together with fading hopes of a profitable summer for the industry, saw shares in major airlines including EasyJet (EZJ) and Jet2 (JET2:AIM) decline.
CORPORATE NEWS
Luxury goods group Burberry (BRBY) slumped 8% on the news Marco Gobbetti plans to step down as CEO and leave the company at the end of 2021.
Burberry said Gobbetti, who has led the transformation of the trench coat-to-cashmere scarves seller’s brand and business, wants to take up another opportunity that will enable him to return to Italy and be closer to his family.
Covid-19 vaccine maker AstraZeneca (AZN) rose 1.2% after its Forxiga chronic kidney disease treatment was recommended for approval in the European Union. Separately, the pharmaceutical giant flagged positive trial results for its Nirsevimab passive immunisation against respiratory syncytial virus in infants.
Food-on-the-go retailer Greggs (GRG) gained 1.3% after serving up news of continued strong recovery in performance. The value sandwiches-to-sausage rolls seller said like-for-like sales in company-managed shops in recent weeks has remained positive versus the comparable period in 2019.
Greggs insisted this level of sustained sales recovery is ‘stronger than we had anticipated’ and if it were to continue, would have a ‘materially positive impact on the expected financial result for the year’.
Elsewhere, outsourcer Serco (SRP) improved 0.8% to 132.5p on news it has won a contract rebid worth up to £322 million from the UK’s Department of Health and Social Care (DHSC) to continue providing support services to Covid-19 test centres.
CEO Rupert Soames said ‘we are proud of the part we have played in building and operating the UK’s highly successful Covid-19 testing infrastructure.
‘From a standing start in March 2020, NHS Test & Trace has grown a network of regional, local and mobile sites which have delivered over 18.5 million individual tests, an average of 51,000 tests a day.’
Soames added that he is ‘delighted that the DHSC has selected us to continue to support them in providing these services for at least the next 12 months’.
HgCapital Trust (HGT) rose 3.5% to 349.88p after the private equity investor agreed the sale of workforce and people management software-as-a-service provider Allocate to RLDatix.
The deal values HGCapital’s investment in Allocate at roughly £53.5 million, an uplift of £9.4 million or 21% over the carrying value of £44.1 million in the trust’s net asset value as of 31 March 2021.
Engineering play Wood Group (WG.) dipped 0.4%, having agreed to pay compensation and other penalties of a combined $177 million related to bribery and corruption allegations related to historical conduct in its legacy Amec Foster Wheeler business.
Totally (TLY:AIM) ticked up 3.5% to 39.58p after winning a contract worth up to £850,000 to provide endoscopy procedures to The Saolta Group of Hospitals in Galway, Ireland, covering six hospitals.
Brain health-focused Cambridge Cognition (COG:AIM) jumped 22.8% to 168.9p on its selection as the cognitive assessment partner for a large at-home study in a contract worth £2.2 million.
