Proactive Investors -
- FTSE 100 up 14 points at 7,476
- Compass buys CH&CO for £475 million
- S4 Capital reports in line fourth quarter trading
Bodycote buyback should be taken well
Bodycote is the top performer in the FTSE 250, up 4.9%, after announcing a £60 million share buyback.
The returns to shareholders came after the firm said it had agreed with Stack Metallurgical Group not to complete the acquisition of the business due to a failure to satisfy all closing conditions to the agreement.
Bodycote said it was making the buyback in light of the lower than anticipated acquisition spend.
Analysts at Jefferies said: “We are relaxed about this morning's update, and while the decision to not complete the SMG acquisition throws up a few questions and calculating the impact on profits/earnings is not straightforward, there is nothing untoward here, and the decision to undertake a £60m buyback is a sensible one that should be taken well.”
“The group is in good shape operationally and financially (the Balance Sheet is in very good nick).”
Here’s a recap of the top risers and fallers on the market today
More Acquisitions PLC, the reverse takeover company, flew 50% higher after its newly appointed chairman and a new non-executive director increased their stakes in the group, at almost a 100% premium.
Brickability Group PLC climbed nearly 7% after announcing further expansion into the cladding remediation market through the takeover of Topek Southern Ltd.
eEnergy plc traded 6% higher on Monday after confirming the disposal of its energy management division.
Shares in Smartspace Software PLC climbed 24% after the company revealed a possible takeover offer from workplace solutions firm Sign In Solutions Inc.
Shares in Benchmark Holdings PLC rose 12% after the aquaculture genetics specialist announced a strategic review and formal sale process.
Keras Resources PLC shares jumped 13% as the miner announced a joint venture with Phosul LLC through which its sales will be boosted.
United Oil & Gas PLC shares fell over 40% after being served a default notice for $3.8 million.
Shares in Trifast dropped 14% within the first hour of trading after the company sounded the earnings alarm.
Goldman likes UK blue-chips, mid and small caps
Goldman Sachs (NYSE:GS) thinks Britain’s stock market will outperform US and EU benchmarks this year and is bullish on small and mid-cap stocks too.
The US investment bank expects British equities will deliver 9% returns over 2024, beating projected returns from the S&P 500, leading eurozone markets and Japanese stocks.
Over the next five years the Wall Street bank expects average annual returns of 6% from UK stocks, which is among the highest returns of all asset classes looked at.
Goldman explained the FTSE 100 trades on a substantial discount to its historical valuation and with heightened geo-political risk, looks “attractive with its heavy weights in oil and large-cap defensives.”
“Finally, buybacks have increased sharply among the larger cap stocks, and we continue to see this as a major support, especially given that the combined yield (dividend and buyback) on UK equities is now above 6%,” it noted.
It is also upbeat on UK small and mid cap indices despite recent strength.
“We think the economic backdrop remains reasonably supportive for UK small/mid cap stocks,” Goldman said.
It highlighted the strong labour market, real wage growth, improved consumer confidence while it expects GBP/USD to rise over the next 12 months to 1.35 (from 1.27), acting as a drag on the larger-cap, more international, names.
Hunt to stay as Chancellor, says PM
Jeremy Hunt will still be chancellor at the time of the general election expected later this year, UK Prime Minister Rishi Sunak has said.
The prime minister said Hunt was doing a "fantastic job" at managing the economy after mounting speculation ahead of the spring Budget about how long he will last in the post.
Asked on a visit to Buckinghamshire whether Hunt would remain in his position at the time of the election, Sunak told broadcasters: "Yes, and I've said that multiple times, it's not new information."
There had been speculation that Sunak wanted to give Claire Coutinho, secretary of state for energy security and net zero the job.