London open: Stocks flat; Tesco and Crest Nicholson in focus
By Michele Maatouk
Date: Friday 14 Jun 2024
(Sharecast News) - London stocks were flat in early trade on Friday, with all eyes on the latest results from Tesco and M&A news in the housebuilding sector.
At 0830 BST, the FTSE 100 was steady at 8,164.05.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: "Ups and downs are likely to continue in the coming weeks as investors digest the ramifications of political manifestos, should they come to pass. At the same time, there are mixed signals coming from elsewhere.
"Global economic conditions are holding up relatively well, but new Citi research suggests the oil price could hit $60 next year, which would affect the commodity-heavy UK market."
Investors were mulling the latest policy announcement from the Bank of Japan, which left interest rates unchanged earlier but announced plans to "reduce its purchase amount of Japanese Government Bonds thereafter to ensure that long-term interest rates would be formed more freely".
In equity markets, supermarket chain Tesco ticked higher as it reported a 3.4% jump in group first-quarter sales, driven by strong volume growth across the UK, Republic of Ireland and Central Europe supported by easing inflation.
Retail sales on a like-for-like basis for the 13 weeks to May 25 came in at £15.3bn as the company said UK market share had increased 52 basis points to 27.6% against its main competitors.
Crest Nicholson surged as it confirmed it had rejected two, unsolicited takeover approaches from Bellway, the latest valuing the group at about £650m.
Under the terms of the latest offer, received on 7 May, Crest shareholders would receive 0.093 new ordinary shares in Bellway for each of their shares. This represents an implied value of 253p per Crest Nicholson share, which is a premium of about 18.8% to the closing share price on Thursday.
"The board of Crest Nicholson evaluated the revised proposal with its financial advisers and concluded that it significantly undervalued Crest Nicholson and its future standalone prospects and was not in the best interests of Crest Nicholson's shareholders," it said. "The board therefore unanimously rejected the revised proposal on 14 May 2024."
Crest Nicholson said Bellway made an initial approach on 25 April, which would have seen shareholders receive 0.089 new ordinary shares.
Bellway was trading down just over 3%.
News of the takeover proposals came just hours after Crest Nicholson slashed its interim dividend payment, said it swung to a loss in the first half and downgraded its profit guidance for the full year, sending its shares tumbling.
The housebuilder cut its adjusted pre-tax profit guidance for the year to the end of October 2024 to between £22m and £29m, from earlier guidance of £45m to £50m, and £41.4m last year.
Market Movers
FTSE 100 (UKX) 8,164.05 0.00%
FTSE 250 (MCX) 20,197.46 0.01%
techMARK (TASX) 4,805.99 -0.02%
FTSE 100 - Risers
Legal & General Group (LGEN) 226.80p 1.39%
Smurfit Kappa Group (CDI) (SKG) 3,580.00p 1.13%
Pershing Square Holdings Ltd NPV (PSH) 4,316.00p 0.89%
BT Group (BT.A) 136.05p 0.78%
Sage Group (SGE) 1,039.00p 0.78%
HSBC Holdings (HSBA) 677.60p 0.65%
Intermediate Capital Group (ICG) 2,240.00p 0.63%
St James's Place (STJ) 526.00p 0.57%
Fresnillo (FRES) 542.00p 0.56%
Aviva (AV.) 473.80p 0.51%
FTSE 100 - Fallers
Severn Trent (SVT) 2,485.00p -1.39%
United Utilities Group (UU.) 1,038.00p -1.19%
Flutter Entertainment (DI) (FLTR) 14,025.00p -1.02%
Barratt Developments (BDEV) 495.70p -0.90%
Rolls-Royce Holdings (RR.) 464.40p -0.73%
Weir Group (WEIR) 2,046.00p -0.68%
Spirax Group (SPX) 8,620.00p -0.63%
Berkeley Group Holdings (The) (BKG) 5,040.00p -0.59%
Rentokil Initial (RTO) 459.00p -0.56%
Rio Tinto (RIO) 5,207.00p -0.55%
FTSE 250 - Risers
Crest Nicholson Holdings (CRST) 226.80p 6.58%
Patria Private Equity Trust (PPET) 558.00p 4.10%
AJ Bell (AJB) 385.00p 3.36%
TP Icap Group (TCAP) 207.50p 2.47%
Octopus Renewables Infrastructure Trust (ORIT) 75.50p 2.44%
Ithaca Energy (ITH) 124.50p 2.22%
Ibstock (IBST) 161.00p 1.90%
W.A.G Payment Solutions (WPS) 65.00p 1.88%
OSB Group (OSB) 452.20p 1.76%
NextEnergy Solar Fund Limited Red (NESF) 74.25p 1.57%
FTSE 250 - Fallers
AO World (AO.) 102.00p -3.59%
Bellway (BWY) 2,634.00p -3.09%
IntegraFin Holding (IHP) 320.50p -2.58%
Dr. Martens (DOCS) 82.30p -2.14%
SThree (STEM) 410.50p -2.03%
Premier Foods (PFD) 161.20p -1.95%
Rathbones Group (RAT) 1,654.00p -1.90%
Bridgepoint Group (Reg S) (BPT) 206.40p -1.62%
Ashmore Group (ASHM) 171.10p -1.55%
Coats Group (COA) 81.40p -1.45%
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