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FTSE 100 gets a boost from hospitality firms as vaccination roll out hits 10m people

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  • FTSE 100 index gains 39 points
  • Shell  and Unilever results underwhelm
  • Compass apologises for school meal row

9.40am: Leading shares continue their buoyant mood.

As is usual on a Thursday, it’s a big day for results. Catering group Compass (LON.CPG) appears to have shaken off the controversy over a subsidiary’s rip-off free school meals. Its shares are up 3.63% to 1398.5p despite announcing a 33.75 fall in first-quarter revenues in its annual meeting statement. It said that despite being hit by the coronavirus lockdowns like the rest of the hospitality industry, margins had improved as a result of cost-cutting measures. 

Compass pointed out that the vaccination rollout was encouraging but the pace of recovery was still uncertain, so the second quarter was likely to be broadly in line with the first.

As for the row over school meals, it said: “We recognise that the quality and quantity of some food parcels fell short of our usual high standards. We have apologised to everyone who has been affected. After conducting a thorough investigation, we have taken several corrective measures that include improved supply chain processes, additional guidance and resources for our employees, and stronger quality assurance checks.

“Since 25 January, (its subsidiary) Chartwells has been providing breakfasts to all children currently receiving a lunch parcel from us for the duration of school closures. We will also provide those same children with lunch and breakfast parcels through the February half term break. The costs of these initiatives will be covered by Compass,” the FTSE group added.

The news that 10m people in the UK had now received their first jab supported Compass and other companies in the hospitality and travel sectors.  Whitbread (LON.WTB) is up 4.54% to 3130p – helped by a refinancing this week – and InterContinental Hotels is 3.14% better at 5000p.

But results from Unilever (LON.ULVR) have gone down like a lukewarm Ben & Jerry’s. Its shares are down 3.83% at 4170p.

Michael Hewson, chief market analyst at CMC Markets, said: “Unilever’s final results appear to have underwhelmed investors despite reporting underlying operating profits of €9.4bn, a decline of 5.8%. In the fourth quarter underlying sales growth did show signs of picking up, rising 3.5%, however a decline in operating margins of 60bps maybe undermining sentiment a touch.”

Focusing on the good news, the FTSE 100 is now ahead 39.17 points or 0.6% at 6,546.99.

8.30am: Modest gains appreciated

The FTSE 100 opened modestly higher on Thursday, taking its cue from Wall Street rather than Asia where Chinese liquidity concerns rattled stock markets.

The UK blue-chip index opened 11 points higher at 6,518.67.

Sentiment in London was driven by the coronavirus vaccine roll-out, which continues apace with 10mln people inoculated, offering hope of a return to something closer to normality in the Spring.

A trial got underway Thursday assessing the impact of giving two different shots as part of the mass roll-out with scientists saying it is possible the new approach could provide better protection than giving the same jab twice.

The day’s big corporate news came from Shell (LON:RDSA), which, in common with its rival BP (LON:BP.), bore the financial scars of a tough year. The oil major’s shares opened flat.

“The pandemic has clearly had a severe impact on performance and the oil price in particular,” said Richard Hunter, head of markets at Interactive Investor.

“The dual effect of over-supply and crippled demand as aircraft stood idle, travel reduced to a trickle and manufacturing all but ceased during lockdown, has shown itself in these numbers.”

Consumer goods giant Unilever’s (LON:ULVR) final results and restoration of growth targets (after scrapping them at the start of the pandemic) were met with a collective yawn as the shares drifted 3.2% lower and to the top of the Footsie losers’ list.

By contrast, third-quarter numbers from BT (LON:BT.A) appeared to be marginally better than expected, propelling the stock, up 2.5%, to the top of the blue-chip leader board.

Proactive news headlines:

Conroy Gold and Natural Resources PLC (LON:CGNR) has announced further gold discoveries on its Glenish gold licence in Ireland. In a statement, Conroy said it had identified a new gold-in-soil anomaly and a new gold mineralised outcrop indicating an extension of the Glenish gold target. The new anomaly is 2 kilometres northeast of the Glenish gold target on the border with the Clontibret gold licence. 

SigmaRoc PLC (LONM:SRC), the construction materials group, has said it expects to report full-year results that are ahead of current market expectations. The group said the strong trading reported in its December 9, 2020, market update continued through to the end of the year. SigmaRoc expects to report revenues for 2020 of around £124mln, up 77% year-on-year, while underlying earnings (EBITDA) are expected to be 54% higher than the year at before at £23.8mln.

MaxCyte Inc (LON:MXCT), the cell-engineering and life sciences company, has raised £40mln by placing shares at 700p each – a premium to last night’s closing price of 670p. Proceeds from the share subscription will be used to strengthen MaxCyte’s balance sheet to enable the company to accelerate projects in its development pipeline. The newly issued shares represent around 6.9% of the company’s enlarged share capital. Subscribers to the share issue featured a mixture of new and existing investors, including D1 Capital Partners, T. Rowe Price, ArrowMark Partners, Baron Capital Group and First Light Asset Management, alongside existing investors Casdin Capital and Sofinnova Partners.

Argo Blockchain PLC (LON:ARB) said it has taken a 25% stake and become the lead investor in Pluto Digital Assets PLC, a crypto venture capital and technology firm focused on projects in the decentralised technology and finance spaces. The crypto mining firm said it has invested £1mln into Pluto at 3p per share as part of an investment round to raise £2.5mln. Argo said its contribution was satisfied entirely by the holding of 75,000 Polkadot tokens it had originally purchased in the first quarter of 2019 for US$75,000 (£55,163).

Amryt Pharma PLC (NASDAQ:AMYT; LON:AMYT) said it has signed multi-regional distribution agreements with a company called Medison Pharma. Medison will sell Amryt’s Juxtapid product in Canada and Lojuxta and Myalept in Israel. In a statement, Amryt chief executive, Dr Joe Wiley, said: “Today’s announcement is another positive development as we continue to grow our commercial assets in existing and new territories and we further progress towards our goal of becoming a global leader in rare and orphan diseases.”

IronRidge Resources Ltd (LON:IRR) said it has completed the acquisition of Joy Transporters Ltd, giving it full ownership of the Saltpond and Cape Coast projects in Ghana. The company described the Saltpond and Cape Coast portfolio as a highly prospective ground holding with high priority pegmatite targets. The exploration area is positioned adjacent to IronRidge’s Ewoyaa lithium project, which is host to a 14.5mln tonne mineral resource.

Panther Metals PLC (LON:PALM) said its wholly-owned Aussie subsidiary, Panther Metals Pty, has beefed up its board with two appointments. Ranko Matic and Daniel Tuffin have joined the team down under. Matic is a qualified chartered accountant with more than 30 years’ experience in the areas of financial and executive management, accounting, audit, business and advising companies. Tuffin has a wealth of experience specific to Panther Metals Pty, Panther said.

Sativa Wellness Group Inc (LON:SWEL) has updated investors on appointments to its board, saying Geremy Thomas and George Thomas have both been appointed as directors, with the former becoming its executive chairman. The cannabidiol (CBD) specialist said following a meeting of shareholders on January 26, 2021, Henry Lees-Buckley is no longer its chief executive as of February 3, adding that Geremy Thomas will act as interim CEO until a replacement is appointed.

Cellular Goods PLC, a company producing synthetic cannabinoids products that is understood to be backed by David Beckham’s DB Ventures has announced float plans. Cellular Goods is raising £8mln through a share offering that would value it at £20mln. Proceeds from the IPO will be used to develop and launch a new range of premium consumer products, prospective investors were told. Cellular said it is aiming to be the London Stock Exchange’s first pure-play consumer CBD brands business.

Eurasia Mining PLC (LON:EUA) said that further to its statement of January 28, 2021, the company informs shareholders that it did have a service agreement with Venus Garden Holdings Limited (a company 100% owned by Alexei Churakov) for advisory services, further to Churakov’s appointment as a Strategic Advisor to the board as announced on September 16, 2019, and that this agreement had expired prior to January 27, 2021.

[email protected] Capital PLC (LON:SYME) has said that following the publication of Audited Accounts for the period ended December 31, 2019, and Interim Results for the six months ended June 30, 2020, last week, the company has successfully addressed the technical DTR breach regarding the timing of financial statements. Immediately following publication, [email protected] made a formal request to the FCA for the lifting of the temporary suspension of its Listing and the resumption of dealings in the company’s ordinary shares. The FCA is currently performing the regulatory steps required for the restoration of the listing and re-commencement of dealings. The process has taken longer and is more complex than normal due to the change in accounting reference date, reverse takeover transaction occurring during the period, and multiple financial statements that have been issued. The company also confirmed that no FCA investigation is underway. [email protected] expects to make a further announcement regarding the lifting of the temporary suspension and resumption of dealings in the company’s shares as soon as possible.

6.50am: Buy stocks and keep calm

The FTSE 100 index is set to start Thursday slightly higher as some of the recent volatility in global equities has becalmed in the past 24 hours.

CFD firm IG Markets sees the blue-chip benchmark some 10 points higher, making a price of 6,511 to 6,514 around an hour before the open.

A winding down of the trading hysteria in some of the Reddit ‘meme’ stocks, like GameStop, has been a factor and, perhaps more importantly, investments are returning their focus to more typical features in the market.

“Trader’s attention drifted back to topics such as lockdowns, vaccination rates as well as a US stimulus package,” said David Madden analyst at CMC Markets. “The prospect of the Biden administration signing off on a relief package of some shape or form has been the biggest driver of stocks recently,”

On Wall Street, the Dow Jones Industrials Average edged to a 36 point or 0.12% gain on Wednesday to finish at 30,723. The S&P 500 notched a 0.1% gain for the day, closing at 3,930, whilst the Nasdaq Composite dipped 0.01% to 13,610.

Trading conditions are presently less calm in Asia, however, with Chinese volatility impacted on stocks.

Madden added: “Equity markets in Asia have fallen on tighter liquidity conditions in China. Short-term borrowing costs in the country ticked up so that lead to fears the Beijing administration are trying to rein in credit, possibly to curb growth in property and stock prices. European indices are on track to open lower.“

Japan’s Nikkei 225 index gave up 304 points or 1.06% to 28,341 whilst Hong Kong’s Hang Seng similarly slipped, losing 0.8% to 29,065. Meanwhile, the Shanghai Composite was 0.45% lower at 3,501.

Around the markets:

  • The pound: US$1.3604, down 0.32%
  • Gold: US$1,823 per ounce, down 0.58%
  • Silver: US$26.61 per ounce, down 1%
  • Brent crude: US$58.88 per barrel, up 2.4%
  • WTI crude: US$56.14 per barrel, up 2.5%
  • Bitcoin: US$38,073, up 3.65%

6.45am: Early Markets – Asia / Australia

Shares in the Asia-Pacific region were lower on Thursday, with South Korea leading the losses as the Kospi fell 1.35%.

Mainland Chinese stocks were also lower, with the Shanghai composite down 0.47% while Hong Kong’s Hang Seng index slipped 0.83%.

In Japan, the Nikkei 225 shed 1.06% and Australia’s S&P/ASX 200 closed 0.87% lower.

READ OUR ASX REPORT HERE

Proactive Australia news:

Core Lithium Ltd (ASX:CXO) has raised $40 million to advance the development of the Finniss Lithium Project in a placement to global institutional investors.

K2fly Ltd (ASX:K2F) has signed a 3 year SaaS contract with Rio Tinto PLC (LON:RIO) to replace its Heritage Management system for the Rio Tinto Iron Ore Division.

Red River Resources Limited (ASX:RVR) (FRA:R1R) is focused on building an Australian multi asset mining business, recently restarting the Hillgrove Gold mine in New South Wales and reporting a strong performance from its Thalanga Base Metal operations in Queensland.

Blue Star Helium Ltd (ASX:BNL) (OTCMKTS:AZZEF) has taken some concrete measures, including increasing land holding, expanding drilling program and raising capital, in the December quarter to boost operations

Element 25 Ltd (ASX:E25) remains focused on its long-term goal of producing ethical manganese products for world markets in 2021 and beyond, with hopes to become a globally relevant manganese producer, as stated in a letter to stakeholders today.

MGC Pharmaceuticals Ltd (ASX:MXC) (OTCMKTS:MGCLF) (FRA:H5O) (LON:MXC) is set to become the first medicinal cannabis company to be admitted to the main market of the London Stock Exchange (LSE) on Tuesday, February 9.

Blackstone Minerals Ltd (ASX:BSX) (OTCMKTS:BLSTF) (FRA:B9S) has hit massive sulfide vein (MSV) mineralisation in multiple drill holes from its maiden exploration program at the King Snake prospect at its Ta Khoa Nickel Project in Vietnam.

Artemis Resources Ltd’s (ASX:ARV) (FRA:ATY) (OTCQB:ARTTF) further assays from the 2020 42-hole multi-rig drilling campaign has found up to 2.62% cobalt and 7.44% copper to complement the excellent gold results from its 100%-owned Carlow Castle Gold and Copper Project in the west Pilbara region of Western Australia.

Brookside Energy Ltd (ASX:BRK) (OTCMKTS:RDFEF) and Stonehorse Energy Ltd (ASX:SHE) have successfully made the second sale for the Thelma 12-1 well, located in the SCOOP Play, northeast of Brookside’s SWISH Area of Interest (SWISH AOI).

Skye Bioscience has a pipeline of synthetic cannabinoid drugs that can disrupt the way we treat dise

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