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Enquest North Sea deal; Shell slumps; Barratt; BT; JD Sports

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4.30pm: Rates comments hit FTSE 100

The FTSE 100 staged a late recovery but stayed just in negative territory, closing 4.1 points down at 6,503.72. Traders had been more positive on vaccination rates, but responded cautiously to the Bank of England’s comments on negative interest rates.

Shares in JD Sports rose rose by 2.2%, or 18p, to 833p after it raised new equity.

Barratt shares rose 2.4% or 16p to 689.4p after it restored the interim dividend (see below). Other house builders benefited. Persimmon was up 36p to 2736p, Taylor Wimpey 2.6p higher at 158.4p and Berkeley Group gained 13p to 4365p.

1pm: Banks on stand-by for negative rates

Banks have been put on six month stand-by for negative rates by the Bank of England.

Full story here

11am: Construction contracts

The UK purchasing managers report indicates that construction activity contracted for the first time since last May.

Housebuilding continued to grow at a decent pace but was at a seven-month low. Commercial activity contracted for the first time since May, while civil engineering work contracted for a second month and at the fastest rate since October.

8.45am: Markets up on vaccinations progress

Traders refocused on the vaccination programme and positive earnings and deal flow to edge the FTSE 100 37.4 points higher at 6,545.22.

Numbers from BT were marginally better than expected, pushing the stock, up 2.5% to the top of the blue-chip leader board.

7am: Enquest North Sea deal

Oil and gas explorer EnQuest is acquiring Suncor Energy UK’s 26.69% non-operated equity interest in the Golden Eagle area, comprising the producing Golden Eagle, Peregrine and Solitaire fields in the North Sea for an initial $325 million.

EnQuest plans to finance the transaction through a combination of a new secured debt facility, interim period post-tax cash flows, and an equity raise.

Chief executive, Amjad Bseisu, said it demonstrated the firm’s continued commitment to the UK North Sea and diversified the company’s existing production base.

“The assets have a strong safety record and a lower than average CO2e emissions intensity ratio,” he said.

“We look forward to a productive partnership with the operator, CNOOC and our future joint venture partners, NEO Energy and ONE DYAS.

Shell slumps

Royal Dutch Shell posted a $21.6bn (£15.9bn) full year loss while fourth-quarter profit dropped to a 20-year low of $393 million, down 87% on last year.

The total dividend fell 65% to 65 cents a share but the company signalled confidence in future earnings by announcing it would lift its first quarter dividend by 4% to 17.35 cents a share.

JD Sports cash raise

Leisurewear retailer JD Sports has raised £464m through a share placing to continue its acquisition plans outside of Europe.

The company placed 58m new shares, representing 6% of the entire issued share capital, at 795p each, a 2.5% discount to the mid-market closing price on Wednesday.

Castlewell Ellon Barratt

Barratt resumes dividend

The board of house builder Barratt has decided to resume dividend payments with an interim payout of 7.5p per share and continued targeting of a full year dividend cover of 2.5 times.

Pre-tax profit for the half year was up 1.7% to £430.2 million as it reported 9,077 home completions, a record first half year.

David Thomas, chief executive said: “We have achieved a fantastic first half performance, with a strong rebound in completion volumes and good progress towards our medium term targets.

“We have also made a solid start to the second half and are now over 95% forward sold for our financial year. 

“Whilst we are mindful of the continued economic uncertainties, the housing market fundamentals remain attractive and our outlook for the full year remains in line with expectations.”

BT revenue falls

BT said revenue for the nine months to 31 December came in at £16 billion, down 7% due primarily to the impact of Covid-19 on consumer and our enterprise units, ongoing legacy product declines and divestments of domestic businesses in Spain, Latin America and France.

Reported profit before tax was £1.591m, down 17%, due to reduced EBITDA.

The company has announced the creation of a new technology unit – Digital – to lead its digital innovation agenda from 1 April.

Markets

On Wall Street, the Gamestop hysteria began to fade and traders attention drifted back to lockdowns, vaccination rates and the US stimulus package. The Dow Jones edged a 0.12% gain and the S&P 500 was 0.1% higher, while the Nasdaq dipped 0.01%.

Japan’s Nikkei was 1.06% lower whilst Hong Kong’s Hang Seng lost 0.8% and the Shanghai Composite was 0.45% lower.



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