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Mitchells & Butlers considers cash call; Cairn shares revision

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4.30pm: FTSE 100 edges higher

After a week of strong gains, the FTSE 100 spent most of the session under water, but closed in positive territory, up 15.1 points at 6,856.96.

12.30pm: Brewery on ice

Innis & Gunn has put its new Edinburgh brewery plan on hold because of uncertainty in the market and has sold a stake in the business to the owner of Tennent’s.

Full story here

11.15am: Older folk want “English” jab

Elderly people are refusing the Pfizer Covid-19 vaccine because they would rather “wait for the English one”.

Many have declined the Belgium-made jab in Stockton-on-Tees and insisted on receiving the vaccine made in Oxford, according to Dr Paul Williams, a former Labour MP who is in charge of the process locally.

In Nottingham, missed appointments by over-80s has seen police officers step in to receive their first doses to prevent vital supplies going to waste.

Once defrosted from -78C (-104F) doses of the Pfizer jab must be used within two days, official guidance from the UK’s regulator says.

Advance Construction

10.30am: Construction sector solid

The construction sector held up well in December despite restrictions on activity in many regions, according to the the lates purchasing managers index.

The construction PMI measures was at 54.6 in December from 54.7 in November, with robust housebuilding leading the way. Commercial activity expanded modestly but civil engineering work contracted.

EY’s Item Club believes the UK economy contracted by close to 2% quarter-on-quarter in Q4 2020. This would result in overall GDP contraction of 10.5% in 2020.

London Stock Exchange

10am: Markets shrug off violence

Equity markets remained unphased by the violence on Capitol Hill yesterday.

Russ Mould, investment director at AJ Bell said the focus was on Joe Biden’s stimulus package.

The FTSE 100 initially advanced 0.7% in early trading, but after an hour it was flat at 6,835.

“Oil producers and miners were once again strong spots on the market,” said Mould. “A Biden administration is seen as positive for commodity prices as he should have more global trade-friendly policies compared to Donald Trump. Expectations for a weaker dollar also mean dollar-denominated commodities would be less expensive in other currencies, thus increasing demand.

“The prospects of greater spending on infrastructure projects in the US also plays well to the commodities space and to construction companies, with FTSE 100 member CRH jumping another 2%.”

These gains were offset by banks giving up some of yesterday’s gains with HSBC falling 2% and Natwest down 1.6%.

Joe Biden

9am: Biden election confirmed

Vice President Mike Pence ended Donald Trump’s campaign to overturn the election this morning and certified President-elect Joe Biden’s win – despite objections from scores of Republicans and a violent protest by Trump supporters.

Trump finally accepted his fate, saying there would be an “orderly transition” – but still claimed that the election was stolen. This was in spite of 50 states, a series of judges and the Congress dismissing all challenges to the result.   

After Mike Pence confirmed Mr Biden’s victory, Trump said: “Even though I totally disagree with the outcome of the election, and the facts bear me out, nevertheless there will be an orderly transition on January 20.

“I have always said we would continue our fight to ensure that only legal votes were counted. While this represents the end of the greatest first term in presidential history, it’s only the beginning of our fight to Make America Great Again.”  

8am: London higher

The FTSE 100 was trading at 6,863.17 +21.31 (0.31%).

Mitchells & Butlers may raise equity capital

sheep Heid

Pub chain Mitchells & Butlers is expected to raise further capital, possibly via a rights issue, to give the company greater scope for dealing with the loss of revenue during the lockdown.

The owner of the All Bar One, Toby Carvery and O’Neill’s chains, and pubs such as the Horseshoe In Glasgow and Sheep Heid at Duddingston, said total sales in the first quarter were 67.1% below prior year. On a like-for-like basis (for sites when open, excluding periods of closure) trading has been 30.1% down on prior year across this period.

“We welcome recent positive news on vaccine approval and roll-out but the future facing the hospitality sector remains extremely uncertain. It is not possible to estimate with any confidence what restrictions on our ability to trade lie ahead of us and for how long.

“As a result, the directors believe it is prudent to explore an equity capital raise, to give the group increased financial and operational flexibility. No decision has yet been made with regards to the timing, size, or terms of any such equity capital raise.

Shares were down 9.47% at 215p in early trade.

Cairn Energy share consolidation

Cairn Energy has announced details of its share consolidation in connection with its proposed 32p per share special dividend.

Shareholders will receive 11  new ordinary shares for every 13 existing shares held at tomorrow’s record time..

The consolidation will reduce the number of Cairn’s issued ordinary shares to ensure, so far as possible, the market price remains approximately the same before and after the proposed return of cash and to maintain comparability of historical and future per share data.

It will reduce the number of ordinary shares in Cairn which shareholders own, but not the proportion (subject to allowance for fractional entitlements). The shares go ex-dividend today and the general meeting takes place on Friday 8 January.

Sainsbury's Local

Sainsbury’s enjoys festive boost

Supermarket chain Sainsbury’s reported a 9.3% rise in like-for-like sales over the festive period as Britons treated themselves to champagne and steaks in response to restrictions on the size of gatherings.

Like-for-like sales excluding fuel for the third quarter to 2 January rose 8.6% with total retail sales up 6.8%. Sainsbury’s said it now expected to report underlying profit before tax of at least £330m in the year to March 2021 compared with £586m a year ago after forgoing business rates relief of £410m.

Joules

Joules has posted a 66% year-on-year increase in total retail sales through its website and Friends of Joules digital marketplace in the seven weeks to 3 January.

The uplift was driven by traffic growth and improved conversion rates across the retailer’s digital platforms.

In contrast, total store sales fell by 58% due to the enforced closure of non-essential shops during the Covid-19 pandemic and reduced footfall as and when stores were open.

Entain offer for Enlabs

Ladbrokes-Coral owner Entain, through its wholly-owned subsidiary Bwin Holdings, has announced a recommended cash offer for Baltics gaming company Enlabs valuing the company at £250m.

Based on total revenues, Enlabs is the market leader in Latvia, the second largest in Estonia, and among the five largest operators in Lithuania. Enlabs is headquartered in Riga with offices in Tallinn, Vilnius, Minsk, Malta, Marbella and Stockholm.

Markets

IG Markets expects the FTSE 100 to rise by around 36 points, marking a fourth successive daily gain since trading resumed for 2021.

Global equities were boosted by Wednesday’s news – prior to the disturbances in Capitol Hill – that the Democrats won the two seats contested in Georgia. It means incoming president Joe Biden will have greater control of Congress and will make it easier to introduce more US government stimulus.

Wall Street finished on a mixed note amid scenes of violence in Washington. At the close, the Dow Jones Industrial Average was up 1.44% and the S&P 500 added 0.57%, while the Nasdaq Composite was 0.61% weaker.

Japan’s Nikkei rose 434 points or 434 points and Hong Kong’s Hang Seng was down 0.42%. The Shanghai Composite was up 0.34%.



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