Countrywide shares rally on £82m takeover bid
Connells has confirmed a £82m takeover bid for Countrywide.
The estate agent chain said on Monday morning that it would offer 250p per share in cash.
David Livesey, Connells group chief executive, said: “Countrywide shareholders have repeatedly been promised jam tomorrow and it has never been delivered.
“There is no quick and easy fix. Turning the business around, especially in unpredictable market conditions, will be a difficult, expensive and lengthy process.
“Countrywide needs new ownership, not yet another speculative scheme that is based on hope rather than experience.
“Our proposal gives Countrywide shareholders significant immediate upside in cash, at a 72 per cent premium to the undisturbed price, with none of the downside risks of remaining independent.”
Connells has also said that without this offer, Countrywide is likely to “enter administration without a significant capital injection.”
The firm offer is now subject to the approval of the board and shareholder support.
Shares in the estate agent group (LON: CWD) rocketed almost 8% on the news and are currently trading at 233,20 (1443GMT).
Three fund picks to see your portfolio build back better during the UK recovery
With the UK suffering more than most at the hand of the COVID pandemic – and watching its GDP shed 19.8% during the second quarter – it appears only natural that investors are chomping at the bit, and trying to climb aboard the British economic recovery train. Having displayed some optimism following Pfizer and Moderna vaccine news, global equities ended last week in something of a consolidation phase. With that in mind, here are three fund picks to help you capitalise on any prolonged UK recovery – if and when vaccines are successfully rolled out.
BlackRock’s UK Trust remains hungry for growth
Our first offering is the BlackRock Throgmorton Investment Trust (LON:THRG), which offers less on the value-for-money and income side but offers plenty in the way of growth potential. Delivering less on the cost-effectiveness side, BlackRock Throgmorton’s price versus NAV trades at a 2.7% premium, while its yield is the most modest of our picks at 1.49% and its ongoing charges figure middles at a rate of 0.59%. What this fund really does deliver on, though, is aggressive and highly active equities trading. Indeed, as the company states in its bio: “The BlackRock Throgmorton Trust looks to back the UK’s strongest emerging companies. An unusual feature of the Trust is its ability to ‘short’ companies that we find unattractive, enabling us to profit if the share price falls. This gives the Trust’s manager the opportunity to back investment ideas with real conviction, within a strong risk framework.” Trading 212 describes the investment trust as having around 30% of its assets held in CFDs or comparable equities derivatives at any one time, allowing it to both enjoy the rallies of its constituent stocks, and profit by hedging against their dips. With this tactic, the fund has enjoyed consistent and impressive over every timeframe. Over the last year, its stock has posted a 11.6% jump; following a 55.3% bounce over the past three years; and a 128% hike over a five-year period. At present, the company looks to be among the more attractive candidates in the IT UK Smaller Companies sector. Their shares are trading for 688.00p apiece, and their top holdings are Gamma Comms (2.8%), YouGov (2.6%), Games Workshop (2.6%), Avon Rubber (2.5%), Watches of Switzerland (2.5%).JP Morgan-advised veteran offers good value
At the other end of the spectrum, the JP Morgan-advised Mercantile Investment Trust (LON:MRC) offers decent price growth and earnings and value potential. Launched back in 1884, the veteran investment trust offers a price to NAV discount rate of -2.10%, a yield of 2.86% and an ongoing charges figure of 0.44%. All of these fundamentals are the best for income and value out of our three picks – and while not the best you’ll find on the IT UK market as a whole, they’re respectable among funds that rank within the upper echelons of most factors taken into consideration. With the income and cost potential in mind, you’d almost consider riding out some rough equities valuations in the near-term, as Mercantile Investment Trust says in its commentary: “Geopolitical concerns are likely to drive continued market volatility as the closely contested US election draws to a protracted conclusion and as Brexit negotiations intensify.” “From a valuation viewpoint, the case for equities remains compelling. Short-term hits to profitability need to be balanced against the potential for medium-term recoveries.” With that being said, the fund hardly boasts weak growth. With its price up by 3.2% over the last twelve months, Mercantile has also seen its share price rise 20.9% in the last three years, and a healthy 53.2% in the last five years. At present, the trust’s shares are trading for 229.00p. Its holdings are topped off by pandemic victors Games Workshop (3.4%), alongside Computacenter (3.3%), Bellway (3.1%), Softcat (2.8%), Intermediate Capital (2.6%).The fund with the inviting equities picks
Receiving a five-star rating from trustnet and a risk score of 95 (meaning it has a lower risk profile than the UK’s top 100 shares), the FTSE 250-listed Finsbury Growth and Income Trust (LON:FGT) boasts decent income alongside an impressive roster of investments. Though costly with a 0.66% ongoing charges figure, the fund boasts a -0.70% discount rate, a 1.93% yield and 65.7% growth over the last five years. More impressively, though, Finsbury may be perfectly positioned to capitalise on the recoveries of some of the hottest UK companies. For instance, its top holding is in the London Stock Exchange (11.70%), followed closely by Unilever (10.80%), which is currently trading at a bargain price, while being described by The Motley Fool and Yahoo Finance as a ‘world class company’. Similarly, 6.40% of its holdings are in The Sage Group, which suffered a 13% hammer-blow at the end of last week. Further, as the UK exit lockdown in the new year, the hope is that housebuilding and hospitality (as well as industrial activities) will have scope for a resurgence. Should the former two sectors manage to expand on their current activity levels, this would benefit the company’s holdings in property developers, Schroders (6.80%), and alcoholic beverage conglomerates, Diageo (9.50%) and Remy Cointreau (5.40%), respectively. Starting the week at a ten-day low and down by 0.8% during the last twelve months, the Finsbury Growth and Income Trust could position investors well to capitalise on the hopeful (if gradual) UK recovery, and return to normality.Cineworld shares rocket on securing debt lifeline
Shares at the world’s second-largest cinema chain, Cineworld (LON:CINE), have rocketed more than 22% on the back of the news that the firm has secured waivers for its debt deadlines until June 2022 and £336 million in new loans to help see it through the remainder of the pandemic.
Last week, Cineworld shares took a tumble amid rumours that the chain was seeking a CVA to take the pressure off its mounting debt crisis – with more than £6 billion owed to creditors and a half-year loss of £1.3 billion due to a fatal combination of global lockdown measures and a near-paralysis of new blockbuster releases.
The chain temporarily closed all of its UK and US sites back in October, but has said that today’s move will provide Cineworld with “financial and operational flexibility until lockdown restrictions in key jurisdictions are eased and studios are able to bring their enhanced pipeline of major releases back to the big screen”.
Among the new terms are equity warrants worth around 11% of its share capital, debt measures set to give the company over £233 million of extra liquidity, and reduced monthly cash spend to around £45 million.
Cineworld also extended its £83 million incremental revolving credit facility from December 2020 to May 2024, as well as pulling forward an expected tax refund of more than £150 million to early 2021.
Mooky Greidinger, chief executive at Cineworld, welcomed the chain’s news:
“Over the long term, the operational improvements we have put in place since the start of the pandemic will further enhance Cineworld’s profitability and resilience.
“The group continues to monitor developments in the relevant markets in which we operate and our entire team is focused on managing our cost base.
“We look forward to resuming our operations and welcoming movie fans around the world back to the big screen for an exciting and full slate of films in 2021″.
News of Cineworld’s debt waiver sent shares at the company soaring 22.37% at lunchtime on Monday 23/11/20, up to 56.40p, following on from an extremely turbulent year which saw prices crash to an annual low of 15.64p in March.
Recent weeks have seen its share price edge higher, up 42.45% in the last month, as combined vaccine development efforts fuel the cinema industry with hope that a post-pandemic world may be on the horizon.
Analysts at Investec (LON:INVP) commented on Cineworld’s news, stating:
“With vaccine development progressing, this should give investors significantly greater confidence in Cineworld emerging from the crisis, allowing the company to capture demand as it returns with a robust slate of postponed films.
“Although recent changes to the theatrical window by peers have captured industry headlines, we continue to believe those will have limited impact on industry box office revenues overall”.
AstraZeneca share price slides despite positive trial results
Shares at Cambridge-based pharmaceuticals firm AstraZeneca (LON:AZN) have slid over 1% on Monday morning despite the news that their coronavirus vaccine, in collaboration with Oxford University, has proven to be up to 90% effective in interim trial data.
Initial results showed the first half dose is able to provide 70% protection against the virus, but a secondary full dose of the vaccine saw immunity rise to 90% – suggesting that the dosage of the first jab primed the immune system significantly from just half of the full dose.
Additional data also indicated that the AstraZeneca-Oxford vaccine helps to prevent the spread of coronavirus in asymptomatic patients, after researchers reported a drop in transmission amongst those with no symptoms.
Clinical trials so far show the vaccine to be safe, with only minor complaints of sore arms and fever among patients – not unusual after immunisation of any kind. A database of more than 24,000 volunteers across the UK, Brazil and South Africa found no major concerns.
While the 70% effectiveness results may have left investors feeling disappointed, following last week’s news of the Pfizer and Moderna jabs providing up to 95% protection, the AstraZeneca-Oxford vaccine is far cheaper to produce and to store than its trans-Atlantic counterparts – needing only normal refrigerator temperatures.
The UK government has already pre-ordered 100 million doses in preparation for a mass rollout as soon as the vaccine is widely available, while AstraZeneca has pledged to provide 3 billion doses for global use over the course of next year.
“The announcement today takes us another step closer to the time when we can use vaccines to bring an end to the devastation caused by [the virus],” said Oxford’s Professor of Immunology, Sarah Gilbert.
UK Prime Minister Boris Johnson has also welcomed the “incredibly exciting news”, and despite the additional safety checks before the vaccine can hit the market, he has hailed the “fantastic results” as an early victory against the pandemic.
Nevertheless, shareholders appear to have taken news of the 70% efficacy at face value, with AstraZeneca shares slipping 1.76% to 8,171.00p at midday, following on from a week-long downward trajectory of 3.96% – likely a reaction to competitors’ vaccines speeding ahead.
The company has a P/E ratio standing at 22.4, with a prospective dividend yield over the next 12 months of 2.6%.
Oil prices: Brent Crude hits highest level since September
The price of oil has hit its highest level since early September.
As markets are optimistic around the vaccine news, the demand for oil should continue to increase if the vaccine is rolled out.
Brent crude is up 1.67% at $45.71 per barrel, which is the highest price in nearly three months.
“Positive sentiment continues to be driven by the recent good news about the efficacy of coronavirus vaccines in development and the expectation that the OPEC+ meeting at the end of this month could see the group extend current cuts by 3-6 months,” said Stephen Innes, Chief Global Markets Strategist at axi.
European markets also cheered on Monday’s opening and reached the highest level since the end of February.
The Europe-wide Stoxx 600 index climbed 0.7%. The FTSE 100 was up 0.5%, whilst the DAX and Spanish IBEX rose 0.85% and the CAC was 0.9% up.
Travel shares boosted the blue-chip index on Monday. Fiona Cincotta of City Index shared why restrictions are hoping to ease amid the new vaccine.
“AstraZeneca announced that its vaccine candidate developed with the University of Oxford is around 70% effective. Whilst normally this would be an excellent result, the fact that it comes after Moderna and Pfizer claiming 95% effectiveness has certainly taken the shine off the announcement. However, on the plus side, the AstraZeneca jab is far cheaper and easier to store than the other two,” she said.
“Adding to the upbeat mood in the UK, the government confirmed that lockdown will end on 2nd December and the UK will move to a 4 Tier system. This should provide a massive boost to the high street retailers which have been a clear victim of the covid pandemic. Shops, along with bars, restaurants and gyms reopening in all areas of the UK in time for the key Christmas trading period means that the UK economy will once again be able to move forward on its recovery path.”
Demand for central London office space plummets
New office construction in central London has dropped by 50% in the past six months.
The latest Deloitte Real Estate’s London Office Crane Survey showed a significant drop in demand in the Square Mile and was down by 60%.
As the impact of the pandemic and people are staying at home, developers are keeping clear and the survey found that many construction projects are on hold until there is more clarity.
Whilst more people are working from home and the pandemic has forced employers to consider more long-term flexible working options, Mike Cracknell, director at Deloitte Real Estate, believes the latest vaccine news could spark an increased demand in the office sector.
He said: “Our data reveals that 3.3m sq ft of office construction was not completed as scheduled between April and September and remains under construction.
“Had these projects completed on time, the total volume under construction would be almost a quarter lower.”
“Of the developers we surveyed, a clear majority – 85% – pointed to weak tenant demand as the major obstacle to starting any new development. Until there is more clarity about occupiers’ office plans, developers will hesitate to embark on new projects, particularly speculative ones.
“Nonetheless, the news about vaccines has already resulted in a re-rating of real estate stocks, and may see both a bigger shift back to the office in the short term, and a strengthening of investor demand in London offices over the medium term.”
A survey carried out by Publicis Sapient showed that 47% of employees would feel more comfortable going back into the office if there was an effective vaccine.
Daily Mail owner posts 50% profit plunge
Daily Mail and General Trust (LON: DMGT) has posted a 50% drop in pre-tax profits to £72m.
The owner of Daily Mail saw revenue down by 14% from last year to £1.2bn.
Financial performance is “expected to reflect varying levels of impact from the Covid-19 pandemic and its economic consequences”, with insurance risk, US property information and edtech businesses are felt to be “well positioned to deliver continued revenue growth.”
“The outlook for UK property information and consumer media remains difficult to predict, whilst for events and exhibitions, conditions remain particularly challenging.
“We will continue to invest in our portfolio, to deliver returns consistent with our disciplined approach, and this will impact margins as we build our businesses for the long-term,” said the group in a statement.
Revenue in the events in exhibitions arm of the group plunged by 81% amid the pandemic.
Daily Mail and General Trust has completed its acquisition of the i newspaper, which was a £50m deal.
The group has revealed plans to lift its full-year dividend, which led to a rise in share price.
Full-year dividend is up 1% to 24.1p.
Daily Mail and General Trust shares (LON: DMGT) are +3.52% at 705,00 (0945GMT).
Cake Box shares rise on strong sales
Cake Box shares (LON: CBOX) have opened higher on Monday morning after the group posted a rise in revenue for the first half of the year.
In the 20 weeks to 30 September revenue surged from £6.6m to £8.6m – a 30% rise.
Gross margin has improved to 48.4% over the half-year.
Despite all stores being shut for six weeks during the six-week lockdown, the group posted a rise in online sales by 51% for the first half of the year thanks to delivery services such as Deliveroo and Uber Eats.
Chief executive Sukh Chamdal said: “We have shown considerable resilience during an unprecedented half year period and have emerged a stronger business for it.
“This gives us confidence that the momentum in our national rollout will return to pre-Covid levels. This has all been the result of a monumental effort from our franchisees, who have continued to focus on giving customers the very best service, and a delicious product, in difficult times.”
“With a strong balance sheet and unique proposition, we remain confident of making continued progress in the second half.”
Back in September, Cake Box said they will give the government £156,000 of furlough cash.
The interim dividend rose 15% to 1.85p.
Cake Box shares (LON: CBOX) are currently +3.50% at 197,69 (0852GMT).
