The pandemic-driven desire for cleaner air has boosted both the bottom line and the share price of Volution. The FTSE 250 extractor fan company said that its group revenue was up 14.6 per cent in the four months to the end of November to £104 million, compared with the same period last year, citing how it was “well placed to capitalise” on the growing awareness of how indoor air quality affects health. The company also revealed that there had been growth in all three regions it operated in, including Britain, Europe and Australasia, and that it had been able to mitigate supply chain problems by holding increased levels of stock.
However, analysts were most impressed by the news that operating profit margins had been maintained despite rising inflation. Charlie Campbell, at Liberum, said: “Holding margins in this environment demonstrates its pricing power and should enhance its reputation.” Volution promptly enjoyed its best single day in seven months, with its shares closing up 25p, or 4.8 per cent, at 539p.
On the wider stock market, investors were less cheerful as the government’s move to “Plan B” restrictions to curb the spread of the Omicron Covid-19 variant cast a shadow over travel and leisure stocks. International Consolidated Airlines Group, the British Airways owner, fell by 4¼p, or 3.3 per cent, to 138p; Wizz Air lost 108p, or 2.4 per cent, to £43.64; and easyJet dropped 14p, or 2.5 per cent, to 536¼p. Rolls-Royce also went into reverse, losing 4½p, or 3.5 per cent, to 124½p, even though the aircraft engine maker said that it had finally stopped bleeding cash. Among leisure stocks, The Restaurant Group, the owner of Wagamama, shed 4½p, or 4.8 per cent, to 86½p and Cineworld fell 1¾p, or 3.4 per cent, to 49¾p because of concerns that the new face covering mandate might put off filmgoers.
Overall, the FTSE 100 closed down 15.79 points, or 0.2 per cent, at 7,321.26 and the more UK-focused FTSE 250 dropped 82.39 points, or 0.4 per cent, to 23,148.04.
Harbour Energy was another heavy faller after it warned that output at the Tolmount UK North Sea gas project would be at the lower end of previous expectations. It represented an extra blow for the oil explorer after it was revealed on Wednesday that Navitas Petroleum would replace the company as Rockhopper’s partner on the Sea Lion oil project in the Falkland Islands. The shares tumbled 51p, or 11.8 per cent, to 379½p.
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However, a string of upbeat corporate updates provided a reason for investors to be cheerful. Balfour Beatty, for example, was lifted higher after the construction group said that it was on track for full-year figures to be in line with pre-pandemic levels. The company said that it expected annual revenue to be roughly double the £4.2 billion made in the first half of the year. The shares added 5½p, or 2.3 per cent, to 252¾p.
Among the smaller listed companies, Renew Holdings enjoyed its best day since April after the engineering services group reported a 27.5 per cent rise in revenue to £791 million for the year to the end of September, while pre-tax profit increased to £40.8 million, up from £32.1 million the year before. The shares closed up 43p, or 5.4 per cent, at 845p.
LendInvest, the recently floated property finance company, rose 4½p, or 2.3 per cent, to 198p on the back of reporting a 28 per cent rise in revenue for the first half of the year, up to £72.4 million.
Supermarkets mull over Boots
Two of Britain’s biggest supermarkets could bid for Boots, according to a City analyst. Shore Capital, the broker, believes that Tesco, the UK’s largest grocer, and Sainsbury’s may want to give the company a “good look” after reports last week that Walgreens Boots Alliance, Boots’ American parent, may be considering a sale of the high street chemist.
“A wide range of businesses, notably financial with so much liquidity and leverage available, will take a good look at Boots, but conceptually, at least, the UK supermarkets could harvest among the most significant benefits,” Clive Black, a retail analyst at Shore, said.
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While he did not rule out the idea that the acquisitive Asda-owning Issa brothers may express interest, he suggested that it might not be unreasonable to think that Simon Roberts or Ken Murphy, the respective bosses of Sainsbury’s and Tesco and both former Boots executives, might be interested.
However, Black did not ignore the challenges that probably would make it hard for a deal to go through, such as the Boots leasehold estate. “We would suggest that it would be sensible for both businesses to keep a file live,” he said.
Wall Street report
With investors taking profits after recent gains and amid nerves about inflation data today, indices fell into the red. The S&P 500 shed 33.76 points, 0.7 per cent, to 4,667.45 while the Dow Jones industrial average was flat at 35,754.69, down a mere 0.06.
