FTSE in-depth: Safestore boost as investor sells
More often than not when a company's biggest shareholder decides to jump ship, there may be trouble ahead. But not as far as Safestore is concerned.
Geoff Foster: The index fell away, making a two-day relapse of 188.4 points or 3%.
Britain's largest self-storage group announced that private equity group Bridgepoint had placed its entire 17.9% stake, or 33.7m shares, at 130p a pop, via brokers Citigroup and Evolution Securities and the shares rose 2.25p to 139.75p.
Espirito Santo, which incorporates broker Execution Noble, immediately advised clients to buy, saying the sale increased the free float of the stock to 75% which creates a classic re-rating opportunity.
Safestore's non-executive director Alan Lewis, who is also a partner at Bridgepoint, offered his resignation following the disposal, but it was declined by the Safestore board.
Steve Williams retires as Safestore's chief executive in March and will be replaced by Peter Gowers, the former boss of the Asia Pacific unit of Intercontinental Hotels. Espirito is not anticipating any fundamental strategic changes to what remains a well-run operational business.
Safestore turned a £9.4m loss in 2009 into a £29.2m profit in 2010 as lettings soared thanks to the rise in homeowners selling up before buying a new home.
Stronger-than-expected Chinese growth and inflation figures revived concerns that the world's top commodity customer could be about to raise interest rates again.
It put the boot into the Footsie as it gave those doubters who believe a correction was long overdue an excuse to sell stock. The index fell away to finish 108.79 points lower at 5,867.91 making a two-day relapse of 188.4 points or 3%.
Wall Street didn't help by initially trading 62 points lower despite impressive fourth-quarter figures from Morgan Stanley. Chinese rate worries dragged metal prices and heavyweight miners lower.
Silver miner Fresnillo led the retreat at 1346p, down 84p, while African Barrick Gold lost 29.5p to 518p, Kazakhmys 84p to 1545p, Xstrata 74p to 1388.5p and Anglo American 152p to 3067p.
JP Morgan Cazenove upgraded National Grid to overweight from neutral and shares of the utility sparked 8p higher to 539p. The Grid underperformed the market by 16% in 2010 and has begun 2011 poorly. The broker believes the market has become so focused on the risks facing Grid that it has lost sight of the opportunity. Grid is a unique investment case and a genuine structural growth story.
Loss-making online grocer Ocado attracted renewed support amid continuing industry gossip about a possible bid from Wm Morrison.
The close was 6p up at a post-July flotation peak of 213.8p. Ocado reported a 26.7% rise in December sales.
Vague private equity takeover talk lifted technology group Spirent Communications 2.6p to 142p. Blackrock is the group's biggest shareholder with 12.3%.
Small buying on the back of a bullish trading update left Judges Scientific 42.5p up at a record 447.5p. Chief executive David Cicurel said robust trading evident in the first six months of the year continued into the second half and produced satisfactory order intake, sales, margins and cash generation. Earnings per share for 2010 will therefore be materially above market expectations.
Inkjet printing technology company Xaar put on 3p to 245p after reporting that trading was significantly ahead of last year and profitability is expected to be slightly ahead of the board's expectations.
Recently buoyed by rumours of a bid from Intel, IQE cheapened 1.75p to 50.5p on profit taking despite a strong trading update. Investec raised its target price to 59p from 45p.
Acquisition news helped Neovia Financial improve 1.75p to 62.25p. It has acquired Optimal Payments, an online payments business, for up to £31m, creating a significant international player in alternative payments. Shop broker Daniel Stewart has a target price of 80p and estimates the deal will enhance adjusted earnings per share by more than 20pc in 2011.
Publishing Technology rose 5p to 56p following an upbeat trading statement. Broker Arbuthnot reiterated its strong buy recommendation and target price of 120p after taking note of increased contracts for its publishing software in December and an improved cash position.
Further consideration of Wednesday's placing of a large stock overhang helped Scotgold Resources add a penny at 6.25p. 1spatial, a provider of location-based information, soared 7p or 17% to 47p following a positive trading update. Over the past three months the company has secured a number of contracts in the National Mapping Agency arena and public sector.
Most watched Money videos
- The new Volkswagen Passat - a long range PHEV that's only available as an estate
- Blue Whale fund manager on the best of the Magnificent 7
- 2025 Aston Martin DBX707: More luxury but comes with a higher price
- 'Now even better': Nissan Qashqai gets a facelift for 2024 version
- MailOnline asks Lexie Limitless 5 quick fire EV road trip questions
- Land Rover unveil newest all-electric Range Rover SUV
- BMW's Vision Neue Klasse X unveils its sports activity vehicle future
- Mercedes has finally unveiled its new electric G-Class
- Mini celebrates the release of brand new all-electric car Mini Aceman
- Mini Cooper SE: The British icon gets an all-electric makeover
- BMW meets Swarovski and releases BMW i7 Crystal Headlights Iconic Glow
- Tesla unveils new Model 3 Performance - it's the fastest ever!
- Currys shares surge after profit guidance upgrade as...
- HMRC phone customers spent 798 YEARS on hold in single...
- I don't want smart meters, so Eon is charging me £316 to...
- Hundreds of jobs at risk as Anglo slashes funding for...
- Royal Mail's future hanging in the balance as bid...
- Axe stamp duty on British shares, says Flutter boss as...
- Tesco boss pockets £10m in biggest ever pay deal at a UK...
- Virgin Money UK warns of pressure on profits ahead of...
- Investors ramp up bets against BT as new boss prepares to...
- Marston's losses narrow amid hopes of summer sporting...
- How refreshing that Anglo has chosen not to grab the...
- I believe pre-nups are so vital every couple should be...
- My neighbour has started keeping bees - can I stop him?...
- Why 16 to 24-year-olds are putting their parents to shame...
- MARKET REPORT: Vodafone shares rally as investors cheer...
- De Beers eyes £4bn London float as Anglo bids to fend off...
- The new 5.05% limited access account that savers are...
- Santander offers £175 to switch your current account -...