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(Alliance News) - Stock prices in London are seen opening lower on Monday as coronavirus cases spike in Europe and more countries impose new measures against the pandemic.
In early company news, newly listed online retailer THG Group raised its annual revenue guidance. Student accommodation provider Unite Group named a new chair. Equipment rentals firm HSS Hire proposed a capital raise and possible delisting.
IG futures indicate the FTSE 100 index is to open 40.28 points lower at 5,820.00. The blue-chip index closed up 74.63 points, or 1.3%, at 5,860.28 Friday.
THG Holdings - which trades as The Hut Group - reported a strong third-quarter performance, which prompted the e-commerce company to raise its annual revenue guidance.
For the third quarter ended September 30, THG reported revenue of GBP378.1 million, which was up 39% from the same time last year.
THG listed in London last month with a market capitalisation of GBP5.40 billion and at the time guided for annual revenue of GBP1.43 billion. However, due to the third quarter performance, THG raised its financial 2020 revenue guidance on Monday to a range of GBP1.48 billion to GBP1.52 billion.
THG said the fourth quarter "remains a key and important trading period each year", accounting for 30% to 32% of revenue each year, with Black Friday playing a key role.
"Our decision to list on the London Stock Exchange provides us with a strong platform to raise the profile of both Ingenuity and our Brands, and further supports their strong organic growth. Our acquisition strategy remains unchanged, with a focus to complement organic growth with brand IP and Ingenuity infrastructure additions. THG has a very strong balance sheet, enabling us to further invest across each of our growth pillars," said Chief Executive Matthew Moulding.
Unite Group said Phil White has advised the board of directors that he will retire as chairman and step down from the board with effect from March 31. Earlier this year, White had said he would not offer himself for re-election at the 2021 annual general meeting.
White will be replaced by Richard Huntingford who is the chair of magazine publisher Future. Huntingford will join Unite as chair-designate on December 1 and take up the role on April 1. He also is a non-executive director at JPMorgan Mid Cap Investment Trust and Bankers Investment Trust.
HSS Hire Group proposed to raise up to GBP54.0 million gross by way of a firm placing and open offer, with its three major shareholders - Toscafund, Ravenscroft And Exponent - agreeing to subscribe GBP43.5 million worth of the shares.
HSS Hire said the Covid-19 pandemic and the significant disruption that it has caused has dealt a blow to revenue in 2020 and has concluded it is "prudent" to raise capital before the year end.
HSS Hire said the shares are to be placed at 10 pence each, which is a 55% discount to Friday's closing price of 22.40p. The company will use the funds to continue investment in its technology platform, invest in its hire fleet and repay GBP15 million of debt that falls due in January 2021.
In addition, HSS said it is exploring alternative listing venues for the company, given that its three major shareholders own around 78% of its issued share capital.
"This transaction is a major vote of confidence from three shareholders representing over 75% of the company's shares. It is testament to the significant strategic and operational progress HSS Hire has made since the start of 2018 as well as its resilience in challenging economic conditions. This capital injection will enable the group to further reduce its leverage - one of our foremost objectives - and gives us a strong platform from which to continue to implement change and drive growth," Chair Alan Peterson said.
Meanwhile, investor sentiment was hurt early Monday by a surge of coronavirus cases across the US and Europe. The new wave already had forced governments in several countries including the UK, Germany and France to reimpose tough restrictions to prevent the disease from spreading.
Spain declared a national state of emergency on Sunday to tackle a second coronavirus wave as the World Health Organization reported a third straight day of record new infections across the world.
The WHO has warned that some countries are on a "dangerous track", with too many witnessing an exponential increase in cases, and called on countries to take further action to curb the spread of the disease.
In total, the UN agency's figures showed that 465,319 cases were declared on Saturday alone, half of them in Europe.
Italy has ordered the closure of theatres, cinemas and gyms and said bars and restaurants must shut early.
In the US, a record of nearly 80,000 new Covid-19 infections over the course of a day were reported on Friday, according to figures from Johns Hopkins University.
The virus has now claimed the lives of 1.1 million people and infected more than 42 million globally.
The Japanese Nikkei 225 index closed down 0.1%. In mainland China, the Shanghai Composite is down 1.1%. Financial markets in Hong Kong are closed for a local holiday, the Chung Yeung festival.
"On the health crisis front, things seem to be taking a turn for the worse. A number of US states, and countries, like Italy, The Netherlands and Hungry have registered a jump in Covid-19 cases. Spain has declared a state of emergency, and France is believed to be preparing for tougher restrictions. Stocks in Asia are showing modest losses. The deteriorating health situation has put pressure on US index futures and European indices are pointing lower," CMC Markets analyst David Madden said.
China's communist leadership on Monday kicked off a four-day meeting to draw the next five-year economic plan and set development goals until 2035.
China's 14th five-year plan is set to focus on economic self-reliance, technological innovation and a cleaner environment. The plenum is set to run until Thursday, but decisions made there will likely not be announced until the next parliamentary session, which usually takes place in March.
The pound was quoted at USD1.3025 early Monday, down from USD1.3050 at the London equities close Friday.
The euro was priced at USD1.1838, flat from USD1.1840. Against the yen, the dollar was trading at JPY104.87, flat from JPY104.80.
Brent oil was trading at USD40.88 a barrel on Monday morning, down sharply from USD42.25 late Friday. Gold was quoted at USD1,897.25 an ounce, lower from USD1,900.50.
The economic events calendar on Monday has US new home sales at 1500 GMT.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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