There have been several notable winners from the pandemic, and Mitie — which has been running quarantine hotels and knocking on people’s doors to make sure that they are self-isolating — is one. Now, however, the outsourcer’s eyes are on the electric vehicle-charging market.
It has splashed out £14.5 million on Rock Power Connection, an electricity connection supplier, in an effort to cash in on the boom in electric cars. Phil Bentley, Mitie’s chief executive, said that the acquisition would allow the group “to capture a greater share” of the market and claimed that it would lift earnings in the first 12 months of ownership. Investors like to hear talk of early returns from any deal and so, not surprisingly, Mitie’s shares rose 1¾p, or 2.7 per cent, to 67¼p.
The FTSE 100 enjoyed a strong start to the month as it rose 51.05 points, or 0.7 per cent, to 7,288.62, while the more domestically focused FTSE 250 added 104.61, or 0.5 per cent, to 23,211.22.
Jes Staley’s resignation as chief executive of Barclays pushed investors towards its rivals and NatWest rose 3½p, or 1.6 per cent, to 244½p, while shares in Standard Chartered improved ahead of today’s interim results, adding 11p, or 2.2 per cent, to 505¾p. Barclays closed down 1½p, or 0.7 per cent, at 200¾p.
Investors put a call into BT ahead of its half-year earnings update this week after the telecoms group said that it had delivered on its cost savings programme 18 months ahead of its original target. The shares topped the Footsie leaderboard, closing up 6¼p, or 4.4 per cent, at 145p.
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Royal Mail rallied after analysts at JP Morgan reiterated their “overweight” recommendation on the group. The bank expects letter volumes to be stronger than expected and shares in Royal Mail, which is due to publish half-year results this month, closed up 9¼p, or 2.2 per cent, to 429½p.
The freeze on insiders selling shares in Darktrace is about to expire and the cybersecurity specialist dropped 121p, or 15.1 per cent, to 681½p.
Having peaked in the spring, housebuilders’ shares have come off the boil amid worries that the Bank of England might increase interest rates, leading to an inevitable rise in mortgage rates, and the sector was dripping in red ink yesterday. Barratt Developments led the sell-off, falling 19½p, or 2.9 per cent, to 643¾p; Persimmon declined 55p, or 2 per cent, to £26.66; and shares in Berkeley Group retreated 98p, or 2.3 per cent, to £42.57. The losses extended on to the mid-cap index as Bellway and Vistry sank towards the bottom, closing down 68p, or 2 per cent, at £32.45 and 28p, or 2.3 per cent, at £11.92, respectively.
Hochschild Mining, the Peruvian goldminer, shone at the top of the FTSE 250 as gold and silver prices advanced. It put on 8½p, or 6 per cent, to 151¼p.
Lok’nStore, the Aim-listed self-storage company, said that it would pursue a “more progressive” dividend policy. As part of an upbeat set of full-year results, it increased the dividend for a tenth consecutive year, recommending an annual payout of 15p per share, up from 13p in 2020. Its share price hit a record high, closing up 22p, or 2.7 per cent, to 857p.
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Among smaller listed companies, investors decided to try on Shoe Zone after the discount footwear retailer upgraded its forecasts for pre-tax profits for the year to a range of between £9 million and £10 million. The shares closed at their highest level in eight months, rising 14½p, or 16 per cent, to 105p.
Amazon proves too tempting
Terry Smith appears to have had a change of heart about Amazon. The fund manager previously had claimed that he wasn’t its biggest fan because its cloud-based Amazon Web Services division was subsidising its “barely profitable” core shopping business. He went as far to say: “If Mr Bezos would float off Amazon Web Services, we would be very interested.”
In the event, it seems Bezos didn’t need to float AWS to entice Smith, who has been buying shares in the £1.7 trillion business through his company’s main Fundsmith Equity Fund as well as through the Fundsmith Long/Short hedge fund, which was set up last summer to manage part of Smith’s personal fortune. Last week Amazon reported third-quarter earnings of $3.2 billion, while revenue increased by 15 per cent year-on-year to $110.8 billion.
Smith has sold his InterContinental Hotels Group holding, which he said last year was one of the biggest drags performance-wise as the stock suffered during the pandemic.
The Fundsmith Equity Fund is the biggest in the UK and manages about £27.1 billion of assets. It was set up by the Mauritius-based Smith in 2010.
Wall Street report
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Strong earnings lifted indices to new records. The S&P 500 added 8.29 points, or 0.2 per cent, to 4,613.67, the Nasdaq was up 97.53, or 0.6 per cent, at 15,595.92 and the Dow Jones industrial average rose 94.28 points, or 0.3 per cent, to 35,913.84.
