LONDON MARKET PRE-OPEN: S4 moves into tech services; Safestay for sale

Fri, 17th Sep 2021 07:56

(Alliance News) - Stock prices in London are seen opening higher, leaving the FTSE 100 index on track for a weekly gain, as investors turn their attention to next week's big central bank meetings.

The US Federal Reserve and Bank of Japan announce interest rate decisions on Wednesday, before the Bank of England does the same on Thursday.

In economic figures out early Friday, UK retail sales saw a surprising decline in August.

IG futures indicate the FTSE 100 index is to open 40.3 points higher, 0.6%, at 7,067.78. The blue-chip index closed up 10.99 points, 0.2% at 7,027.48 on Thursday. The FTSE is marginally lower than it was at the end of last week but could post a weekly gain should it have a positive session on Friday.

In early UK corporate news, advertising firm S4 Capital unveiled a new acquisition, Virgin Wines UK has struck a partnership with online gift card firm Moonpig, estate agent Foxtons has appointed a new chair, and hostels firm Safestay has put itself up for sale. Elsewhere, Aquis-listed Love Hemp is partnering with Amazon.

UK retail sales declined in August from the month before, figures on Friday showed, with more consumers going out as lockdown measures have eased, hurting the grocery sector.

Retail sales declined 0.9% in August from July, confounding expectations of 0.5% growth, according to market consensus cited by FXStreet. It was a second straight month of lower sales. In July, they had declined 2.5% from June.

Excluding fuel, UK retail sales declined 1.2% monthly and 0.9% yearly. Fuel sales rose 1.5% in August, though are still 1.2% below pre-virus levels.

"Food store sales volumes fell by 1.2% in August 2021, with some evidence to suggest that the further easing of hospitality restrictions had an impact on sales; people increased their social spending such as eating and drinking at restaurants and bars," the Office for National Statistics said.

The pound was trading at USD1.3794 following the data, up from USD1.3765 late Thursday but off a Friday morning high of USD1.3810.

The euro stood at USD1.1771, improved from USD1.1762 late Thursday. However, against the yen, the dollar was trading at JPY109.87, up from JPY109.65.

Martin Sorrell's advertising firm S4 announced the acquisition of Zemoga, which S4 will merge with its Media.Monks brand.

Zemoga provides product design, engineering and delivery services to enterprise clients including Bridgestone, Morningstar, Sony and Roku. It has offices in Los Angeles, New York and Wilton, Connecticut and delivery centres in several cities in Colombia.

The deal marks a foray into the technology services sector for S4, which it said will become its third practice area.

"Entry into the technology services sector through Zemoga gives us the full capability to talk to the chief technology or information officer, as well as the chief marketing and chief sales officer. We now have the full set," Sorrell said.

Estate agent chain Foxtons has named Nigel Rich as its new chair, with effect October 1. He replaces Ian Barlow from October 1.

Barlow's departure was announced in July, after a major shareholder called for "radical" changes to the board following years of share price declines. Foxtons has faced investor dissatisfaction after years of share price declines since a peak of almost 400p in 2014. The Times reported in June that Hosking Partners called for "radical board-level changes" and wrote to Barlow.

Barlow has been a board member since the estate agent's IPO in September 2013. He took the role of chair in March 2020.

Newly-appointed Rich has served as chair of estate agency Hamptons International and of FTSE 100-listed Segro. He has also served as a non-executive of ITV.

Virgin Wines said it has entered into a "first of its kind" partnership with Moonpig. Virgin Wines will launch a range of products on Moonpig's online gifting platform.

"As part of the new and innovative partnership, Virgin Wines will launch a range of 32 different wines, some of which are available exclusively via the Moonpig website, as part of the latter's ever expanding gifting proposition. The first of its kind 'shop in a shop' launch allows customers to buy a bottle or wine gift either as a standalone purchase or as an add-on to any card purchase," the company said.

AIM-listed Virgin Wines said the partnership is effective immediately.

Fellow AIM listing Safestay has put itself up for sale as part of a strategic review. It has a market capitalisation of GBP12.5 million.

The London-based hostels operator noted it has already received a "very early stage and highly conditional approach" from a potential buyer.

"Individual and group bookings are coming in for the winter and for 2022 and underpin our confidence of returning to pre-Covid levels of trading. We believe strongly in the appeal of the Safestay brand. However, we recognise that this is a natural point, as we relaunch the business post covid, to undertake a strategic review, in order to maximise value for all shareholders. This process will reveal whether there is additional value for shareholders compared to the upside we believe we can deliver," Chair Larry Lipman said.

Safestay has appointed PricewaterhouseCoopers as financial adviser for strategic review and formal sale process.

Aquis-listed Love Hemp will list its products on Amazon, after being selected by the US e-commerce firm. The CBD and hemp products firm said this follows a "rigorous compliance process". A selection of its stock will be available initially, and Love Hemp expects the range to increase as an authorisation process continues.

Love Hemp said: "As an Amazon Vendor, Love Hemp will also have its own dedicated virtual store through which Amazon and the company will conduct marketing activities to drive awareness and visibility of Love Hemp products. Operating on the Amazon Vendor platform, Amazon will place orders with Love Hemp in order to fulfil consumer orders from Amazon's central depot. These orders will be shipped across the UK and into Europe."

In Asia, equity markets were mixed.

The Nikkei 225 in Tokyo closed up 0.6% as the campaign to become Japan's next prime minister kicked off. Four candidates are vying for leadership in a close race.

Prime Minister Yoshihide Suga announced last month that he would not run for head of the ruling Liberal Democratic Party.

In China, the Shanghai Composite was marginally lower. The Hang Seng Index in Hong Kong was 0.5% higher.

In Sydney, the S&P/ASX 200 ended 0.8% lower.

Brent oil was quoted at USD75.38 a barrel early Friday, up from USD75.00 at the London equities close on Thursday. Gold was quoted at USD1,765.33 an ounce, up from USD1,756.55.

By Eric Cunha; ericcunha@alliancenews.com