UK WINNERS & LOSERS SUMMARY: Amigo Sinks After Ending Sale Process

Mon, 08th Jun 2020 11:09

(Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Monday.

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FTSE 100 - WINNERS

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International Consolidated Airlines, up 7.9%, easyJet up 5.5%. The British Airways parent has begun legal proceedings over what it calls the UK government's "unlawful" quarantine measures, which came into effect on Monday. A leaked Home Office document seen by The Daily Telegraph reportedly said there was no method for officials to ensure a person's details are "genuine". Travellers arriving in the UK will now be required to self-isolate for 14 days under government measures to guard against a second wave of coronavirus. "The surge in travel and airline-related names comes on the day when the UK implements a quarantine for overseas travel, perhaps the very definition of shutting stable doors after the horse has bolted. With lockdowns easing across Europe and no sign of a second infection wave, this move has been staunchly opposed by airlines, and it looks like the market expects the restriction to remain in place for only a limited time," said IG Group's Chris Beauchamp.

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Royal Dutch Shell 'B', up 4.4%, Shell 'A', up 4.2%, BP, up 3.5%. The oil majors were tracking spot oil prices higher, quoted at USD42.78 a barrel Monday morning, up from USD42.16 late Friday after OPEC members, led by Saudi Arabia, and other key oil producers agreed on Saturday to extend historic output cuts through July. The North Sea benchmark hit a high of USD43.30 overnight - its highest level in three months. The 13-member cartel and its allies, notably Russia, decided to extend by a month deep May and June cuts agreed in April to boost prices, the Organization of the Petroleum Exporting Countries said in a statement. But Mexico, which had already made clear ahead of the talks that it "could not adjust...production further", announced that it would not be complying.

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FTSE 100 - LOSERS

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JD Sports Fashion, down 2.0%. RBC Capital downgraded the sportswear retailer to Underperform from Sector Perform.

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FTSE 250 - LOSERS

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Plus500, down 7.0%. The contract for difference provider said it has continued to see record levels of customer trading activity as heightened levels of market volatility persisted into April and May, but with customers winning at Plus500's expense more often than not. More positively, Plus500 said it has added 100,574 new customers since the start of the second quarter, which is already ahead of its expectations for the entire quarter. This is also in excess of the 82,951 new customers added in the first quarter. Plus500 said revenue from customer income remains at record levels, generating around USD249.0 million in the second quarter to date. Revenue from customer income means revenue from customer spreads and overnight charges. However, the company said that total revenue for the second quarter to date stands at less than half of that, at USD102.5 million, as customer trading performance has been positive for the customers and negative for Plus500.

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OTHER MAIN MARKET AND AIM - LOSERS

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Amigo Holdings, down 24%. The subprime lender said it has terminated its sales process as a potential acquirer with whom the company had been in discussions has withdrawn. Amigo also reported the formal resignation of Stephan Wilcke as board chair and said it has decided to cancel its final dividend for the year to March 31 due to a material rise in complaints and the associated costs in resolving them. Amigo said it has no other acquisition offers and therefore is terminating its formal sale process with immediate effect. The lender had been in talks with an unnamed buyer over a potential 20.9p each offer for Amigo, valuing the entire company at roughly GBP100 million, compared to its current market capitalisation of GBP61.5 million.

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Lookers, down 14%. The car dealer said it will not be able to publish its results by the June 30 deadline, meaning its shares likely will be temporarily suspended from trading in July. The initial reason behind the results delay has been a fraud investigation, following a March announcement that Lookers had identified potential fraudulent transactions in one of its operating divisions. Audit firm Grant Thornton is leading the investigation. Despite this, Lookers had been expecting to post its results by the end of June. Now, due to "the additional procedures that the company and Deloitte will now need to perform in order to finalise the 2019 results", this deadline will not be met. Having spoken to the UK Financial Conduct Authority, Lookers said it expects its shares to be suspended from July 1 until its results are published. This is to take place "at the earliest possible date and by no later than the end of August". Further, the company's auditor, Deloitte, has told Lookers that it plans to resign once the 2019 results are published. Lookers has begun "a competitive tender process to appoint a new auditor".

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By Arvind Bhunjun; arvindbhunjun@alliancenews.com