UK stocks bounced on Tuesday after Monday’s sharp losses in reaction to stricter lockdown measures amid rising virus cases related to a new, potential more easily transmitted strain.
Boris Johnson’s latest proposal to the European Union was rejected as both sides scramble to get a deal over the line before the end of the year. The pound weakened by 0.5% against the US dollar to $1.34.
At 12:00, the FTSE 100 index was 1.5% higher at 6,433 points with weakness in metals and energy stocks offsetting a bounce in banks and other financial stocks.
COMPANY NEWS
Mobile network operator Vodafone (VOD) offered to buy out the minority shareholders in its German cable subsidiary Kabel Deutschland €103 per share in an effort to end the legal wrangle which has dogged it since its 2013 takeover.
Vodafone, which originally bought a 76.7% stake in the German firm for €7.7 billion, said shareholders representing 17.1% of the capital had accepted its offer. The shares dipped 0.9% to 120.9p.
Shares in low-cost airline EasyJet (EZJ) climbed 3.6% to 784.2p after the firm agreed to defer the purchase of more than two dozen aircraft from Airbus scheduled for delivery from its 2022 financial year onwards.
As a result, the airline will take no deliveries in its 2021 financial year, eight in 2022, seven in 2023 and 18 in 2024 allowing it ‘to more closely match forecast seasonal requirements’.
GUIDANCE UPPED
Sofa seller DFS Furniture (DFS) lifted its guidance for full year pre-tax earnings to the upper half of the current range of £81 million to £118 million due to strong sales in the first half to 13 December.
Overall revenues for the first 24 weeks of the year were up 19% driven by a 76% increase in online sales, reflecting strong order intake and an increase in market share. The firm’s order book is currently £200 million higher than last year. The shares jumped 5.95% to 222.5p.
Petrol station and motorway service business Applegreen (APGN) agreed to a take-private offer from a consortium of B&J Holdings, representing its founders, and private equity investor Blackstone.
The offer, at €5.75 cash per share, values the business at €718 million and will allow the founders and Blackstone to run the business with a long-term focus without having to account for itself to the market. The UK-listed shares gained 1% to 510p.
WAREHOUSE SCALES UP
Big-box retail investor Warehouse REIT (WHR) announced the acquisition of a 200,000 square foot portfolio of last-mile warehouse assets in the West Midlands for £18.6m.
The portfolio is fully let with net initial yield 6.1% and offers ‘good potential to increase the longevity of the income in the short term’. The shares added 1.3% to 114.37p.
Alternative finance provider Duke Royalty (DUKE:AIM) announced it had exited its largest holding, Irish telecom provider Welltel, with £15.4m of cash proceeds after costs compared with a fair value £13.2m as of its last audit. The sale represents an internal rate of return (IRR) in investment of 27%.
The firm also announced a £3.1m follow-on investment in MRBD Holdings, the UK’s largest privately-owned maker of recreational vehicles. Shareholders applauded both pieces of news, sending shares 5.75% higher to 29.6p.
