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(Alliance News) - Renishaw announced Monday it is launching a formal sale process, after the pair who started the engineering and scientific technology firm in 1973 decided it is time to pass on the business.
Executive Chair David McMurtry and Non-Executive Deputy Chair John Deer, the company's founders, have indicated they intend to sell their "very substantial" shareholdings in Renishaw. Together, the founders own around 53% of the group, and have expressed a preference for the disposal of their entire combined shareholding.
The board has mulled over various options with its advisers, Renishaw said, and has unanimously concluded that it would be appropriate to investigate the sale of the company and thus is launching a formal sale process. UBS is acting as sole financial adviser and corporate broker to the company.
"We are both grateful for our continued good health, however we recognise that neither of us is getting any younger. Now finding ourselves in our 80s, our thoughts have increasingly turned to considering the future of our shareholdings in the company and how we can actively contribute to securing the future success of the business. With that in mind, we approached the rest of the board to indicate that we felt the time was now right to discuss the best way to achieve this," said McMurtry and Deer.
The company said it is looking for a buyer "who will respect the unique heritage and culture of the business, its commitment to the local communities in which its operations are based, and who will enable the company to continue to prosper in the long-term."
Renishaw shares up 12% in early trade on Tuesday, giving a GBP4.22 billion market capitalisation.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.2% at 6,602.64
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Hang Seng: down 1.3% at 29,071.17
Nikkei 225: closed down 0.9% at 29,407.89
DJIA: closed up 603.14 points, 2.0%, at 31,535.51
S&P 500: closed up 2.4% at 3,901.82
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EUR: down at USD1.2009 (USD1.2055)
GBP: down at USD1.3882 (USD1.3953)
USD: up at JPY106.79 (JPY106.62)
Gold: down at USD1,718.61 per ounce (USD1,737.01)
Oil (Brent): down at USD63.10 a barrel (USD64.94)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
0955 CET Germany unemployment data
1100 CET EU euro area inflation
0855 EST US Johnson Redbook retail sales index
1600 EST US domestic auto industry sales
1630 EST US API weekly statistical bulletin
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UK house price growth surprisingly accelerated in February, according to figures from mortgage lender Nationwide. Annually, UK house price growth was 6.9% in February, strengthening from the 6.4% rise seen for January. On a monthly basis, prices grew 0.7%, reversing the 0.2% dip seen at the start of the year. This brought the average house price in the UK to GBP231,068 in February, the highest on record, from GBP229,748 in January. "This increase is a surprise. It seemed more likely that annual price growth would soften further ahead of the end of the stamp duty holiday, which prompted many people considering a house move to bring forward their purchase," said Robert Gardner, Nationwide's chief economist. Last week, The Times said it had been told that Chancellor Rishi Sunak – who has been urged not to end the stamp duty holiday – will use his budget statement on Wednesday to move the deadline to the end of June.
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The chancellor is to launch a GBP520 million initiative to support small UK businesses with training and software in this week's government budget. Sunak said the Help to Grow scheme could help 130,000 small and medium enterprises become more productive by providing access to some of the UK's top business schools. The Treasury said that firms will receive expert technology advice and discounted software, as it aims to spark innovation as the UK plots its recovery out of the pandemic. Sunak said: "Our brilliant SMEs are the backbone of our economy, creating jobs and generating prosperity – so it's vital they can access the tools they need to succeed."
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BROKER RATING CHANGES
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CITIGROUP RAISES PENNON GROUP TO 'BUY' ('NEUTRAL') - TARGET 1034 (1056) PENCE
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RBC RAISES PRUDENTIAL TO 'OUTPERFORM' (SECTOR PERFORM)
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SOCGEN RAISES ROYAL MAIL TO 'BUY' ('SELL') - TARGET 675 (105) PENCE
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COMPANIES - FTSE 100
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Ashtead guided to full-year results ahead of previous expectations. The equipment rental firm said that in the third quarter, underlying rental revenue was down 1% at GBP1.08 billion, with underlying pretax profit down 10% to GBP225 million. Statutory revenue was down 1% to GBP1.21 billion for the third quarter and down 2% to GBP3.76 billion for the nine-month period to January 31. Statutory pretax profit was down 4% to GBP210 million in the third quarter and down 17% to GBP716 million in the nine months. "This performance illustrates the successful execution of our long-term strategy, which we embarked upon after the last recession, to broaden and diversify our end markets and strengthen our balance sheet. This has enabled us to capitalise on our increasing scale while, at the same time, maintaining the business' agility," said Chief Executive Brendan Horgan. "The strength of our business model and balance sheet positions the group well in markets that are likely to remain uncertain. With our businesses performing well, we now expect full year results ahead of our previous expectations. The benefit we derive from the diversity of our products, services and end markets, coupled with ongoing structural change, enables the board to look to the future with confidence."
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Flutter Entertainment's 2020 revenue more than doubled, boosted by its merger with Stars Group during the year. The gambling firm's revenue for 2020 jumped to GBP4.40 billion from GBP2.14 billion in 2019, with adjusted earnings before interest, taxes, depreciation and amortisation also doubling to GBP889 million from GBP425 million. Pretax profit all but evaporated, dropping to GBP1 million from GBP136 million. The sharp slide in profit came after separately disclosed items totalling GBP565 million for 2020, up from just GBP131 million in similar charges in 2019 and related to the combination with Stars Group. On a proforma basis, which adjusts for the completion of the Stars Group deal in May, revenue rose a more moderate, but still robust, 27% to GBP5.26 billion and adjusted Ebitda rose 13% to GBP1.23 billion. Flutter said it has seen strong momentum in 2021 with growth in player volumes across all divisions. Revenue has been up 36% year-on-year in the first seven weeks of 2021. "Covid restrictions continue to impact our retail business in the UK and Ireland. The latest government guidelines suggest that our UK shops may re-open in mid-April while it looks like it could be May at the earliest before we are able to reopen our Irish shops. For each month that our UK estate is shut, we anticipate an EBITDA loss of GBP5 million while in Ireland, the monthly loss is expected to be GBP4 million," the firm noted.
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Housebuilder Taylor Wimpey noted a good recovery in the second half of a "very challenging" year. Completions fell 39% to 9,799, primarily due to site shutdowns in the second quarter due to the pandemic, with revenue for 2020 falling 36% to GBP2.79 billion. Pretax profit slumped 68% to GBP264.4 million. "After an unusual and volatile year, our 2020 results are in line with market expectations," said Taylor Wimpey, adding the 2021 selling season has started well, following on from a stronger-than-expected housing market recovery in the second half of 2020. Taylor Wimpey added that it will be resuming ordinary dividend payments by returning GBP151 million, or 4.14 pence per share, as a final payout for 2020. The firm cancelled its 2019 final dividend and a planned special payout.
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Rio Tinto said it plans to dispute amended assessments brought forward by the Australian Taxation Office. The tax office has issued the miner with amended assessments of AUD359.4 million - around USD279.8 million - primary tax and AUD47.1 million of interest. This is on top of more than AUD8.4 billion of Australian income tax paid during the same period, the company highlighted. "The assessments relate to the denial of interest deductions on an isolated borrowing used to pay an intragroup dividend in 2015. This borrowing was repaid in 2018. Borrowing to fund the payment of a dividend is a normal commercial practice. Rio Tinto is confident of its position and will dispute the assessments," the miner said. In line with its usual practice, Rio will pay 50% of the primary tax upfront as part of the objections process.
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AstraZeneca and FibroGen on Monday said a US regulator will convene a committee meeting to review the new drug application for roxadustat. Cambridge, England-based biopharmaceutical company Astra and San Francisco, California-based FibroGen are collaborating on the development of roxadustat, which is intended to treat anaemia of chronic kidney disease. The US Food & Drug Administration will convene the Cardiovascular & Renal Drugs Advisory Committee meeting to review the application for the drug. This follows a December FDA decision to extend the review period for roxadustat in order to carry out further analysis of study data.
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COMPANIES - FTSE 250
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Man Group reported record funds under management of USD123.6 billion on December 31, up 5% from USD117.7 billion a year before. Investment performance fell by two-thirds to USD3.3 billion in 2020 from USD10.1 billion in 2019, while net inflows increased by 38% to USD1.8 billion from USD1.3 billion. Man raises its annual dividend by 8% to 10.6 cents from 9.8 cents. "We have increased our management fee profits and our dividend to shareholders, and grown client assets to end the year at a new record high for funds under management," said CEO Luke Ellis.
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COMPANIES - MAIN MARKET AND AIM
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Ryanair carried 500,000 passengers in February, down 95% from 10.5 million a year before. The budget airline said it ran just 6% of its normal February schedule with a 78% load factor.
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Foxtons Group agreed to buy fellow London estate agent Douglas & Gordon for GBP14.3 million in cash from the Talbot Willcox family and former employee shareholders. Foxtons said the purchase continues its expansion in the lettings market and will be materially earnings enhancing from 2022.
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Tuesday's Shareholder Meetings
JPMorgan Russian Securities PLC - AGM
Mountfield Group PLC - GM re placing, change of business, name change
Redx Pharma PLC - AGM
River & Mercantile UK Micro Cap Investment Co Ltd - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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