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(Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Wednesday.
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FTSE 100 - WINNERS
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United Utilities, up 4.4%. The water utility said profit in the first half rose despite a fall in revenue due to average customer bills being reduced. The Warrington, England-based water company posted a pretax profit in the six months to September 30 of GBP201.1 million, increasing by 3.1% from GBP195.1 million a year before. Finance expenses fell 32% to GBP132.0 million from GBP193.9 million a year ago. Revenue declined by 4.3% to GBP894.4 million from GBP935.5 million a year prior. The company said this largely reflected a reduction in its average customer bill. United Utilities upped its interim dividend by 1.5% to 14.41 pence per share from 14.20 pence per share the prior year. Going forward, the company expects its revenue for the year ending March 2021 to be between GBP1.75 billion and GBP1.80 billion.
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Melrose Industries, up 4.3%. The industrial turnaround specialist said it is currently trading at the top end of its expectations for 2020, but warned that short-term uncertainty remains. Melrose, which specialises in buying and improving underperforming businesses, said its performance in the four months to the end of October reflected a faster-than-expected recovery in automotive markets, the continued strong performance in Nortek Air Management, and "more challenging" market conditions in Aerospace. "Trading in the period has been encouraging in a number of our end markets, and we are seeing the benefits of actions taken by management in our businesses' performance," said Chair Justin Dowley.
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FTSE 100 - LOSERS
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AVEVA, down 20%. The information technology firm said 125.7 million rights issue shares were admitted to the London Stock Exchange on Wednesday morning. Under the rights issue, announced at the start of November, shareholders were entitled to buy seven rights issue shares for every nine existing shares held in AVEVA. Separately, the company said regulatory and antitrust approvals remain on track for its takeover of OSIsoft. The deal is expected to complete between late December and February 2021.
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FTSE 250 - WINNERS
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Genus, up 5.8%. The animal biotechnology company reported good trading momentum in the four months to the end of October. Genus sells products made using biotechnology to cattle and pig farmers. It said trading was ahead of its expectations in the four-month period, with adjusted pretax profit showing strong growth compared to the same period in 2019. The Basingstoke, Hampshire-based company said revenue, volumes and adjusted operating profit for its porcine and bovine businesses all grew during the recent four months, while porcine royalty revenue increased in Latin America, Europe and Asia. Looking ahead, Genus said that it expects the continued prevalence of Covid-19 to impact the business, its customers and employees. Genus said that based on the first four months' trading momentum, the company currently anticipates that it "will continue to make strategic and financial progress and is likely to perform ahead of its previous profit growth expectations for the financial year 2021".
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FTSE 250 - LOSERS
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Future, down 8.2%. The magazine publisher has made a GBP594 million takeover offer for price comparison site GoCo. Under the agreed combination, GoCo shareholders will be entitled to receive 0.052497 new shares in magazine publisher Future and 33 pence in cash, valuing each GoCo share at 136p each. This represents a premium of 24% to Tuesday's closing price, when GoCo shares closed at 110p. GoCo shareholders will own around 19% of the combined group. GoCo directors intend to recommend shareholders vote in favour of the deal, as do Future's directors. Future expects the transition to be "immediately" earnings per share accretive. Separately on Wednesday, Future published its full-year results. Revenue surged 53% to GBP339.6 million in the financial year to September 30, and pretax profit rallied four-fold to GBP52.0 million from GBP12.7 million. Future said the revenue growth was driven by a combination of organic growth and acquisitions, underpinned by a 56% rise in total online users. GoCo shares were up 14% at 125.40 pence on Wednesday.
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Virgin Money UK, down 5.5%. The lender reported a narrowed annual loss, after putting behind it the payment protection insurance remediation costs of a year before, but this was hampered by a jump in credit impairment charges, reflecting a "cautious approach to an uncertain economic environment". For the financial year that ended September 30, Virgin Money's pretax loss narrowed to GBP168 million from GBP232 million the year before. The lender's total impairment losses on credit exposures jumped to GBP501 million from GBP153 million the year before. But this was offset by Virgin Money's legacy conduct costs dropping to GBP26 million from GBP433 million the year before. The sharp drop was due to the non-recurrence of significant one-off acquisition costs and legacy PPI conduct charges. Net interest income dropped 15% to GBP1.28 billion from GBP1.51 billion. As total operating income fell 18% to GBP1.44 billion.
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OTHER MAIN MARKET AND AIM - WINNERS
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AA, up 6.9% at 34.00 pence. The roadside rescue firm received a 35 pence-per-share firm offer from a consortium of TowerBrook funds and Warburg Pincus funds. On Monday, AA confirmed it had received a non-binding takeover offer from TowerBrook Capital Partners and Warburg Pincus International. The consortium made a 35p cash approach and had until 1700 GMT on Tuesday to either announce a firm intention to make an offer, or walk away. AA then secured an extension, giving the consortium until 1700 GMT on Wednesday to make a firm offer. The deal values AA at GBP219 million, and the purchase price represents a premium of 40% to AA's closing price on August 3, the last day before the offer period began. "Having carefully considered the range of options available to the AA including the terms of the proposed acquisition by the consortium, the AA board has concluded that the acquisition, which offers certain cash value to the AA's shareholders as well as a significant equity injection to reduce indebtedness, is in the best interests of the AA, its shareholders and wider stakeholders, and as such is unanimously recommending the acquisition to shareholders," said AA Chair John Leach.
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By Lucy Heming; lucyheming@alliancenews.com
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