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Frasers Covid costs; Wood hydrogen deal; Nucleus offer


4.30pm: London falls

The London market was dragged down by uncertainty over the government’s road map to recovery, with airlines and travel company stocks falling (see below).

The FTSE 100 closed 26.47 points lower at 6,915.75.

2.10pm: Travel stocks fall over confusion

Thomas Cook holidays

Holiday and travel stocks fell after the government confirmed the reopening of the sector but was criticised for not providing enough detail and leaving the industry and consumers confused over testing and how the traffic light system will work.

Danni Hewson, finance analyst at AJ Bell said there were market falls for TUI, On the Beach, Jet 2 and IAG following the publication of the government’s report into foreign travel.

“To book or not to book that is the question that seems to have been answered today when it comes to a spot of summer sun. “Not yet,” wasn’t quite what travel operators had been hoping for and it’s no surprise to find a number of them among the biggest losers on the London markets. These are companies burning through cash and depending on consumer confidence.

“But consumers are bewildered.  Many forced to re-book last summer will be having second thoughts if they’re going to have to fork out hundreds of pounds for PCR tests on their return.

“It leaves businesses like TUI in a precarious position. Even if foreign travel gets the go-ahead next month the season has already been curtailed. Jet 2 announced it won’t even think about restarting holidays until the end of June because of a lack of clarity and detail.

“A short season, a large proportion of any business held over from last year and fresh bookings likely to be suppressed all leads to questions about how much new money can potentially fill the industry’s empty tanks.”

8.15am: Markets pause

The FTSE 100 opened the final session of the week on the backfoot as investors took stock of a largely positive run that has see it close in on the 7000 mark. The index was trading at 6,922.75, down 19.47 (0.28%).

7am: Frasers sees more impairments

House of Fraser Glasgow

Frasers Group said it may face extra non-cash impairments of at least £200m due to “almost certain” further Covid-19 restrictions.

It said it had based the decision on government statements outlining Britain’s path out of lockdown restrictions.

The company, which includes Sports Direct and Evans cycles, said it “currently anticipates making material accounting non-cash impairments to freehold properties, other Property, Plant & Equipment, and IFRS 16 Right of Use Assets which could be in excess of £200m.”

7am: Wood hydrogen deal

Wood, the global consulting and engineering company, has entered into a new, three-year engineering framework agreement with Norway-based NEL Hydrogen.

The Aberdeen company will work with NEL Hydrogen to help deliver large-scale green hydrogen production plants and play a leading role in the transition towards an integrated, lower carbon future.

Craig Shanaghey, president of Wood’s operations across Europe, Middle East, and Africa, said: “If the world is going to realise the potential of hydrogen as a sustainable, clean, and plentiful energy vector, a vast increase in production is necessary.”

7am: Nucleus takeover offer

The offer document for Nucleus will be published on 13 April following an agreement with James Hay to change the terms of the £145m takeover of the Edinburgh wrap platform.

The two announced on 30 March that the acquisition would be via an offer instead of a court-sanctioned scheme in order to satisfy the demands of shareholders.

All other aspects of the timetable remain unchanged. The first closing date will continue to be the date falling 21 days following the date on which the offer document is published. 

Overnight markets

CMC’s Michael Hewson says European markets look set to open in positive territory this morning, as they look to continue where they left off yesterday.

US markets finished higher with another record close for the S&P500 – 4097 – led predominantly by the tech sector.

The Dow Jones index closed 57 points higher and the S&P 500 rose 17 points.

In Japan this morning, the Nikkei 225 has advanced 204 points but in Hong Kong the Hang Seng index is down 212 points. 

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