UK investors decided caution was the order of the day on Friday after disappointing domestic GDP data and ahead of a U.S. inflation report which could see consumer prices rise by 6.7% on an annual basis, the highest level since 1982.
Between September and October, the UK economy grew by just 0.1% compared with prior-month growth of 0.6% and a forecast of 0.4%, leaving it 0.5% smaller than it was in February 2020 before the onset of the pandemic.
One of the main reasons for the miss was weakness in industrial production, which after a strong showing in September dropped 0.6% in October due to lower electricity and oil production against estimates of a 0.1% increase.
Sterling held its ground at $1.3225 despite the weaker growth figures, but by 8.30am the FTSE 100 had given up 17 points or 0.25% to 7,304 points as buyers stayed away.
COMPANY NEWS
Grocery to fashion retail group AB Foods (ABF) posted a mixed trading update ahead of its annual general meeting, leaving its shares flat at £19.35.
While the grocery, ingredients and sugar businesses struggle with port congestion and higher energy and freight costs, the Primark fashion business is trading ahead of expectations and margins are also better as the firm faces into the most important selling period of the year.
Mining giant Anglo American (AAL) confirmed its full year guidance and projected it would grow by 35% over the next decade with ‘an attractive 50% margin’.
The firm also increased its near-term ‘performance improvement target’ to between $3.5 billion and $4.5 billion by 2023 as growth projects come onstream. Shares were also flat at £29.70.
Specialist food packing firm Hilton Foods (HFG) announced it would raise £75 million or 8% of its current issued capital in order to finance the purchase of smoked salmon producer Dutch Seafood Company, taking it into the US market for the first time.
The capital raise will also go towards refinancing the previous acquisition of Fairfax Meadow and is expected to be earnings accretive within 12 months. Shares were down 0.2% at £11.94.
Shares in sustainable infrastructure firm Nexus (NEXS:AIM) gained 0.9% to 234p after it posted a rebound in revenues and earnings for the year to September and reinstated its dividend.
Nexus also said it was looking at some ‘exciting strategic opportunities’ for its eSmart Networks electric vehicle charging business ‘to crystalise shareholder value’, which in layman’s terms suggests it is looking to sell to an outside buyer or to float the unit separately.
Shares in contract clinical research firm Open Orphan (ORPH:AIM) jumped 8% to 20p after it revealed a $13.4 million contract with a US biotech firm to test its novel influenza treatment in human trials at the company’s state-of-the-art lab in London.
The study is expected to start in the second half of next year, alongside the recent £5.1 million contract win for trials for a treatment against respiratory syncytial virus announced last month.
‘Green’ investment trust SDCL Energy Efficiency Income (SEIT) posted a 42% jump in the value of its portfolio to £785 million between March and September and a 36% increase in net asset value to £944 million after new investments and commitments of £208 million.
After a capital raise of £250 million in September, net asset value per share rose a more pedestrian 2% to 104.5p while the total NAV return was 4.7%. Shares traded sideways at 117p.
Disclaimer: The author owns shares in Open Orphan and SDCL Energy Efficiency Income Trust
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