Daily Business Live
Shell storm impact; Beeks placing; Iomart; Saga; Helical
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4.30pm: Reopening fuels FTSE 250
The more domestically-focused FTSE 250 hit a new record on the back of confidence in the reopening of the economy.
Danni Hewson, financial analyst at AJ Bell, said: “The FTSE 250 is riding an optimism fuelled wave as the UK gears up for life after lockdown.
“Companies as varied as Carnival Cruises, shopping centre owner Hammerson and Upper Crust owners SSP all bounded higher today as investors embraced a new-found confidence that the new normal is out of date.
“The country’s supercharged vaccine rollout coupled with confirmation that the roadmap out of lockdown doesn’t require any last-minute detours just yet is fostering belief that the recovery is sustainable this time.”
The FTSE 100 closed at 6,885.32, up 61.77 (0.91%).
The US trade deficit surged to a record high in February as the nation’s economic activity rebounded more quickly than that of its global rivals and could remain elevated this year, with massive fiscal stimulus expected to spur the fastest growth in nearly four decades.
2pm: Murdoch chasing FanDuel
Murdoch’s Fox Corporation is suing Flutter in a bid to raise its stake in FanDuel.
11am: Bell MBO
Bell Group ready for further growth following MBO.
9.15am: Welch fund raising
Online tyre tycoon Mike Welch has raised £3 million for his fashion chain Atterley.com.
9am: London higher – Toshiba bid talk
The FTSE 100 was trading 55.36 points higher at 6,878.91 as investors look ahead to the reopening of the economy.
AJ Bell financial analyst Danni Hewson says news of a blockbuster private equity bid for Japanese conglomerate Toshiba is likely to prompt speculation about which companies could be next to fall prey to the wall of cash private equity firms have built up in recent years.
“Also giving the FTSE 100 a bit of a lift was a brief update from Royal Dutch Shell (see below) from which the biggest takeaway was probably that the core oil and gas operations were profitable again in the first quarter thanks to higher commodity prices, rather than the $200 million hit from the Texas winter storms earlier in the year.
“And the start of unconditional trading in Deliveroo – recast as Flopperoo in some quarters after its disastrous market debut – at least hasn’t led to more pain for the business with the shares making modest gains as all investors are able to start buying and selling the shares.
“A strike by riders though will keep the takeaways platform in the spotlight for the wrong reasons on Wednesday.”
7am: Shell: storm impact
Oil and gas giant Shell said the Texas winter storm had an impact on operations and is expected to have an aggregate adverse impact of up to $200 million on adjusted earnings.
A snowstorm swept across large parts of North America, leaving at least 100 people dead and knocking out sections of Texas’s electricity grid.
Shell says its upstream business now expects to produce between 2.4 million and 2.475 million barrels of oil or equivalents per day.
This is approximately 10,000 to 20,000 barrels per day fewer than normal due to the effects of the storm.
Democrat politicians have blamed the state’s deregulated electricity grid for the problems.
Financial networks computing firm Beeks Financial Cloud Group has raised £5 million in a placing of 4,347,827 new shares at a price of 115p per share. A sale of shares at the same placing price has raised a further £500,000.
The placing price represents a discount of 3.8% to the closing price of 119.5p per share on 1 April.
Iomart: results at lower end
Cloud computing company Iomart said the third, and unexpected, COVID-19 UK lockdown “hindered the green shoots of growth” it had expected in the second half of the year, causing results to be at the lower end of expectations.
However, the Glasgow-based group said it remains strongly profitable, and the board is confident Iomart has a strong basis for growth once UK business confidence returns and the strategic actions currently in progress under new CEO Reece Donovan have been fully implemented.
It expects to report revenue of approximately £112 million (FY20: £112.6m) and adjusted profit before tax of approximately £20m (FY20: £22.8m).
The company has not made use of any Government furlough support.
The board expects to continue to use selective M&A “to augment the growth strategy”. The group said its strong balance sheet allows the proactive consideration of acquisitions to broaden its skills and capabilities in new areas.
Over-50s holidays group Saga said its tour and cruise businesses will not resume operations until later this year after cutting 36% of its workforce as it deals with travel disruptions.
The company, which had planned to restart its cruises in May, reported a pretax loss of £61.2 million for the 12 months ended 31 January, against £300.9m profit a year earlier.
Helical: expects reoccupation
The property company said it expects to see the increasing reoccupation of all its buildings by its tenants.
“In the meantime, the quality and appeal of the buildings in our portfolio has been reconfirmed by the letting of space at rents above ERV and the high rent collection achieved throughout the last year,” it said in an update.
“We were especially encouraged to agree a lease [with TikTok] for the whole of Kaleidoscope, EC1 [London], the latest demonstration of our ability to develop sustainable, technology enabled and service led buildings that offer excellent connectivity and are aligned with the latest ways of working.”
The company has collected 92.9% of all rent contracted and payable for the March, June, September and December 2020 quarters. Of the balance, it has granted rent holidays on 4.9%, mainly to F&B tenants, leaving 2.2% which is subject to ongoing discussions with tenants.
The FTSE 100 was expected to open higher after ending Tuesday’s session 86 points to the good at 6,823.
“This rebound in activity suggests that businesses are building up inventory as well as preparing for a coiled spring rebound in [the second quarter]”, said Michael Hewson at CMC Markets, with non-essential retailers, hairdressers and pub beer gardens due to reopen.
On Wall Street the Dow Jones Industrial Average closed 0.29% lower while the S&P 500 dropped 0.1% and the Nasdaq fell 0.05%.
In Asia this morning, Japan’s Nikkei 225 rose 0.13% while Hong Kong’s Hang Seng fell 0.8%.
Brent crude was trading at $63.03 a barrel, up 0.46%.