UK WINNERS & LOSERS SUMMARY: Ashtead Rises After Bolstering Finances

Mon, 27th Apr 2020 10:46

(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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Ashtead Group, up 7.0%. The equipment rental firm said it remains in a strong financial position with long-term committed debt facilities, despite lockdowns putting pressure on end-markets. The company has modelled a variety of downside scenarios over the coming year. Under such scenarios, Ashtead said it remains free cash flow positive throughout the next financial year. Further, Ashtead said it has accessed an additional USD500 million through its senior-secured credit facility for one year, increasing the facility size to USD4.6 billion. Ashtead has suspended all merger and acquisition activity, as well as reducing its planned capital expenditure for the year ending April 2021 to GBP500 million from the initial range of GBP1.1 billion to GBP1.3 billion. "Rental revenue is lower but stable, and given the group's forecasting positive free cash flow in all its modelling that should provide some reassurance Ashtead will emerge from the current disruption in one piece," Hargreaves Lansdown analyst Nick Hyett said.

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InterContinental Hotels Group, up 4.2%. The hotel operator announced new financing arrangements to strengthen its liquidity amid the Covid-19 pandemic. IHG said it has amended its revolving credit facility to include a waiver of existing covenants until the end of 2021 and to introduce a minimum liquidity covenant of USD400 million until June 30, 2021. It added that it has issued GBP600 million in commercial paper under the UK Government's Covid Corporate Financing Facility. IHG said it now has access to USD1.35 billion of cash on deposit with existing bank facilities of USD660 million currently undrawn, taking its total available liquidity to USD2 billion.

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BP, up 1.7%. The oil major reiterated its commitment to completing the sale of its Alaskan operations to US-based Hilcorp Energy for the same USD5.6 billion consideration, despite the steep fall in oil prices due to the Covid-19 pandemic and overproduction. The company initially agreed to sell its Alaskan operations to Houston, Texas-based Hilcorp for USD5.6 billion in August 2019, as part of its overall USD15 billion divestment programme. The sale included BP's entire upstream and midstream business in the state, including BP Exploration (Alaska), which owns all of BP's upstream oil and gas interests in the region, and BP Pipelines (Alaska)'s interest in the Trans Alaska Pipeline System. BP said it and Hilcorp have renegotiated the financial terms of the deal, while retaining the overall consideration, in light of the recent significant market volatility and oil price falls.

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FTSE 100 - LOSERS

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Melrose Industries, down 1.2%. Goldman Sachs downgraded the industrial turnaround specialist to Neutral from Buy.

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FTSE 250 - WINNERS

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Capita, up 9.0%. The outsourcer said it has secured a four-year GBP60 million contract extension to administer a pension scheme for teachers on behalf of the UK Department for Education. Under the contract extension, which is due to start on October 1, 2021, Capita will continue to deliver the administration of the UK Government Teachers' Pension Scheme for all members in England and Wales. The contract also covers multiple services, including all stakeholder, member and employer engagement; customer contact and digital solutions; data analytics; and change management and innovation.

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FTSE 250 - LOSERS

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Dunelm Group, down 1.5%. RBC Capital downgraded the home furnishings retailer to Sector Perform from Outperform.

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OTHER MAIN MARKET AND AIM - WINNERS

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RPS Group, up 21%. The consultancy firm reported a drop in first-quarter fee revenue, but looked to bolster its funding by increasing its available banking facilities. In addition to its existing GBP100 million committed revolving credit facility, a further GBP60 million facility for 12 months has been provided by HSBC, Lloyds Banking and NatWest. Drawing down against this additional facility requires RPS to provide several non-UK subsidiary guarantees to the banks. RPS also agreed to new financial covenant tests that allow operational flexibility during the next 12 months. The tests include a monthly minimum threshold covenant and leverage and interest cover tests as on December 31, 2020 and March 31, 2021. For the three months to the end of March, fee revenue was down 6.6% year-on-year to GBP125.4 million from GBP134.3 million the year before, due to lower levels of activity from Consulting UK & Ireland, and subdued trading in Services UK & Netherlands.

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By Arvind Bhunjun; arvindbhunjun@alliancenews.com