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Weekly review

By Josh White

Date: Friday 16 Apr 2021

(Sharecast News) - The FTSE 100 ended the week 103.78 points higher, closing at 7,019.53 on Friday.
Equity view

Man Group's assets rose by $3.4bn in the first quarter as investors placed more money with the hedge fund group and it made market gains. Funds under management increased to $127bn in the three months to the end of March from $123.6bn at the end of December. Net inflows of $0.6bn and investment gains of $3.5bn were partly offset by $0.7bn of foreign currency and other negative effects.

Ocado is investing £10m in Oxbotica, an autonomous vehicle software company, and has set up a commercial partnership to develop self-driving vehicles. The online grocer and platform provider said it would make the investment as part of Oxbotica's latest equity funding round and would take a seat on Oxbotica's board. The companies will collaborate with the ultimate goal of providing vehicles for Ocado's infrastructure customers with self-driving delivery vans and warehouse vehicles.

IT provider Kainos said on Friday that results for the year to the end of March 2021 are set to be at the upper end of consensus forecasts after the momentum outlined in its trading update in January was maintained. The company said demand in both of its divisions - Digital Services and the Workday Practice - continued to be robust, both from existing and new customers, despite the uncertainty generated by the Covid-19 pandemic.

Entain said momentum continued into 2021 as the gambling group experienced a strong first quarter of online trading. Online net gaming revenue rose 33% in the three months to the end of March with sturdy trading in all markets except Germany, where regulatory changes affected the market. Excluding Germany, revenue rose 44%.

Online electricals retailer AO World said on Thursday that full-year adjusted earnings are set to be in line with market expectations despite Covid-related costs, as revenues surged. In an update on trading for the year to the end of March 2021, the company said group revenues rose 62% to £1.66bn, with momentum continuing in the fourth quarter. Revenues for its UK website rose 88% on the year in the fourth quarter, while its German website saw full-year revenues jump 77%.

Lost cost airline Wizz Air said on Thursday that it's set for a full-year loss of up to €590m and that it expects only a "gradual" traffic recovery into late summer. In a post-close trading update for the year to the end of March 2021, the company said it's expecting a reported net loss of between €570m and €590m. Its full-year underlying loss is expected to be between €475m and €495m, including an estimated €95m in discontinued fuel hedges.

Travis Perkins said it made a positive start to 2021 with good sales growth across its business but the builders merchant left its expectations unchanged. Like-for-like sales excluding Wickes rose 17.4% in the three months to 27 March from a year earlier and 11.8% from two years before, the FTSE 250 company said in a trading update.

QinetiQ expects its annual results to beat market expectations after a strong fourth quarter. Order intake in the year to the end of March was strong with revenue increasing by figures in the high teens, the FTSE 250 group said in an update. The company's annual underlying operating profit margin will be modestly higher than in the first half.

British Land said on Wednesday that it had collected 82% of total rent for the 2021 financial year, with offices at 99% and retail at 70%. The FTSE 100 company said 76% of March rent has been collected to date, with offices at 96% and retail at 54%, as it expected that to improve in the coming weeks in line with previous quarters.

Robert Walters said annual profit would easily beat expectations after good trading momentum during the first quarter. The recruitment company said gross profit fell 12% to £77.3m in the three months to the end of March. The result was a big improvement on the 26% drop in the final quarter of 2020 and declines of 30% or more in the two quarters before that.

Drugmaker AstraZeneca said on Wednesday that Tagrisso had been approved in China for the adjuvant treatment of patients with early-stage epidermal growth factor receptor-mutated lung cancer. AstraZeneca highlighted that Tagrisso was the only targeted medicine to show efficacy in the treatment of early-stage lung cancer in a global trial and was also the first such medicine approved in China.

Recruiter Hays said on Tuesday that full-year operating profit is set to beat market expectations as temporary and permanent activity has improved in all regions. The company said that given improving fees and good underlying cost management, and assuming a continuation of current market conditions, operating profit for FY21 is expected to be at least £85m, versus market consensus of around £61m.

Industrial and electronics products distributor Electrocomponents said on Tuesday that it had delivered a "strong" revenue performance in the fourth quarter, driven by continued market share gains throughout the period. Electrocomponents posted a like-for-like revenue growth of 12%, of which roughly 4% benefitted from weaker Covid-19 comparatives.

Online trading platform Plus500 reported sharp falls in first quarter profits and revenues against strong comparatives a year ago driven by Covid pandemic volatility. The company on Tuesday said core earnings in the three months to March 31 were almost halved to $121.7m on revenues down 36% year on year to $203.2m. Quarter-on-quarter earnings rose

Real estate group Land Securities said on Tuesday that £33.0m of rent due to be received on 25 March was still outstanding. Land Securities stated that £110.0m of rent was due on the 25 March payment date, with 67% of the net rent paid within five working days, compared with 65% for the equivalent period last year. Of the £33.0m of rent still outstanding, Landsec said £10.0m related to customers who had withheld payment pending documentation of agreed concessions.

Imperial Brands said new chief financial officer Lukas Paravicini would join on 1 May, less than two months after being appointed by the FTSE 100 cigarette company. Paravicini will take over as CFO from Oliver Tant on 19 May, the day after Imperial's first-half results. Tant will leave the board on the same day and will be available to help with a smooth handover until the end of June.

Samarco Mineracao, a Brazilian joint venture between Vale and BHP, has filed for bankruptcy protection in response to creditors' claims over a 2015 dam collapse that killed 19 people, BHP said on Monday. The company said the judicial reorganisation (JR) was a "last-resort response to multiple legal actions filed by certain Samarco financial creditors in the US and Brazil which have resulted in freezing orders against Samarco's accounts and which threaten Samarco's operations".

LondonMetric Property said on Monday that it has sold five non-core office and retail assets for a combined £38.5m, its share of which is £28m. Two retail assets in North Shields and Llanelli have been sold in separate transactions for a total of £21.1m, of which LondonMetric's share is £10.6m. The assets are held in the company's joint venture with Universities Superannuation Scheme and are fully let to retailers including B&Q, Pets at Home, B&M, Tapi and Carpetright.

Specialist cake retailer Cake Box said on Monday that it expects to report record full-year revenues as trading recovered after its stores reopened in May last year following the first lockdown. In an update for the year to the end of March 2021, the AIM-listed company said it now expects revenues to be up 16% on the previous year, while adjusted pre-tax profit is set to be in line with market expectations.

Economic news

Banks, insurers and asset managers have moved or are moving more than £1tn of assets to the EU in response to Brexit with more to come, according to a report. Banks have shifted or are in the process of shifting more than £900bn, about a tenth of the UK banking system, to EU centres and insurers and asset managers have moved more than £100bn, the New Financial think tank said.

Close to two-fifths (37%) of UK workers in full or part-time employment are given less than a week's notice of their shifts or work patterns, the latest research conducted by the Living Wage Foundation revealed. The research, which was based on two surveys of over 2,000 UK adults, was carried out to understand hours insecurity among the country's workforce.

Around 58% of workers within the BAME community are concerned about post-pandemic work, revealed the Resolution Foundation and the Future Strategy Club on Thursday. In a report, highlighting the disparity in employment opportunities for the BAME community, the Resolution Foundation found that black young people are nearly three times more likely to be unemployed than White counterparts.

Britain agreed with the European Union that it would respond to legal action taken by the bloc on the implementation of trading rules in Northern Ireland by mid-May. According to a government spokeswoman, Britain is "in line with precedent that typically allows two months to respond to proceedings of this kind". "We have agreed with the EU that we will respond to the Letter of Formal Notice by mid-May," the spokeswoman said.

The UK economy returned to growth in February despite Covid-19 restrictions, according to figures released on Tuesday by the Office for National Statistics. The economy grew 0.4% following a 2.2% decline in January, and versus expectations of 0.6% growth. January's figure was revised up from a previous estimate of a 2.9% drop.

Footfall at UK retail destinations rose on Monday by a mammoth 155.2% week-on-week, according to fresh data on Tuesday, and by 225.2% in shopping centres, as non-essential retail reopened across England. The rise in footfall in high streets was slightly lower at 176.1%, analysts Springboard reported, which it put down to cold weather, encouraging shoppers into the enclosed environments of shopping centres.

The Bank of England said on Tuesday that chief economist Andy Haldane is leaving in June. Haldane is leaving the Bank to become chief executive of the Royal Society for Arts, Manufactures and Commerce (RSA).

Heathrow said on Monday that passenger numbers tumbled nearly 83% in March as coronavirus restrictions continue to dent travel. Passenger numbers fell 82.6% compared to the same month a year ago to 542,000.

UK exporters have reported lower sales in the first quarter, blaming the double impact of Brexit and the coronavirus pandemic, according to the British Chambers of Commerce (BCC). A survey by the BCC found that two out of five firms which export goods have seen sales fall, with caterers, retailers and wholesalers particularly hit.

Retail sales rose in March as the UK marked a year from the start of the first Covid-19 lockdown but most categories remained in decline, industry figures showed. Total sales increased 8.3% from the same month in 2019, outstripping the three-month average rise of 2.7%, the British Retail Consortium said. Like-for-like sales rose 8.4%.

International events

China's economy bounced back from the pandemic in the first quarter, according to figures released on Friday by the National Bureau of Statistics. GDP growth jumped to a record 18.3% in the first quarter from 6.5% in the final quarter of last year. The figures came in below expectations for 18.5% growth but marked the best year-on-year growth since records began in 1992.

US consumer sentiment was at its best level in a year in April thanks to the much larger than usual government stimulus payments seen over that time. The University of Michigan's closely-followed sentiment index improved from a reading of 84.9 for March to 86.5 in April, according to a preliminary reading.

US retail sales went into overdrive in March as Americans started receiving government stimulus checks from mid-month onwards. According to the Department of Commerce, in seasonally adjusted terms retail sales volumes shot 9.8% higher month-on-month to reach $619.1bn.

The number of Americans signing up for unemployment fell last week below the peak hit in the aftermath of the Great Financial Crisis in 2008 - a major milestone. According to the Department of Commerce, initial jobless claims fell by a massive 193,000 to 576,000 in the week ending on 10 April.

Eurozone industrial production fell in February but beat expectations, official figures showed. Factory output dropped 1% from January when production rose 0.8%, Eurostat said. The result was better than analysts' average forecast for a 1.3% decline.

The European Commission will not renew its contracts with AstraZeneca and Johnson & Johnson for the supply of Covid-19 vaccine doses once they expire. A source at the Italian Health Ministry reportedly told local newspaper La Stampa that Brussels will be focusing on vaccines using messenger RNA (mRNA) such as those from Pfizer and Moderna.

China's foreign trade balance shrank by more than expected after the Lunar New Year holidays as the rate of growth in imports more than doubled. According to figures published by the Chinese Customs Administration, the country exported only $13.8bn more goods in March than it imported.

Economic sentiment in the euro area's largest economy cooled unexpectedly in April amid worries about the hit to activity from tighter mobility restrictions, the results of a closely-followed survey revealed. The ZEW institute's economic expectations index fell by 5.9 points from March to reach 70.7.

Retail trading in the eurozone beat expectations in February as non-food sales reversed a plunge the previous month, official figures showed. Sales rose 3% from a month earlier, outstripping analysts' average forecast of 1.7% growth, Eurostat said. The annual decline improved to 2.9% from a revised 5.2% drop in January and also beat consensus.

French MPs voted on Monday to ban short domestic flights that can be replaced by train journeys lasting two and a half hours or less. Members of Parliament voted in favour of the green legislation despite it being a watered down version of the measure agreed by President Emmanuel Macron's citizens' climate convention.


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