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FTSE 100 live: Shell commits to the UK, McLaren denies Audi rumour, Serco upgrade, CMC considers split

·14-min read
 (ESI)
(ESI)

FTSE 100 heavyweight Shell has announced a major restructuring of its business that will see it commit to the UK and end a structure that saw part of its business based in the Netherlands.

Shell said today its CEO and CFO will move to the UK and promised to “align Shell’s tax residence with its country of incorporation in the UK”. As part of the change the company’s ‘A’ and ‘B’ shares will be consolidated.

Shell’s Chair Sir Andrew Mackenzie, said: “A simpler structure will enable Shell to speed up the delivery of its Powering Progress strategy, while creating value for our shareholders, customers and wider society.”

Elsewhere, Serco has upgraded profit and revenue forecasts for the full-year thanks to longer-than-expected Covid-19 work.

Key Points

  • Shell commits to the UK with restructuring

  • CMC considers splitting in two

  • Serco upgrade profit and revenue forecasts

  • Cineworld passes pre-pandemic sales thanks to Bond boost

Coal wobbles drag on blue-chip

Monday 15 November 2021 17:34 , Simon Freeman

 (BHP)
(BHP)

The COP26 agreement to start “phasing down” the use of coal cast a pall over the miner-heavy FTSE 100 from which it only just clawed its way out.

The blue-chip index managed to close the day out up 3.95 points, or a measly 0.05%, at 7351.86.

Russia-focused steel miner Evraz was down 16.8p at 603.2p; BHP fell 37.4p to 1923.4p; Antofagasta went down 28p at 1,460p and Anglo American down 41p at 2,850p.

By comparison, the French Cac closed up 0.53% and the German Dax was up 0.34%.

The market also felt a chill after Bank of England Governor Andrew Bailey told MPs he was “very uneasy about the inflation situation”, leading to speculation that a rates rise will come in December.

Royal Dutch Shell’s bombshell decision to ditch the Dutch and make London its corporate home lightened the mood: its A shares closed up 35.2p at 1,676.4p and its B shares up 23.8p at 1,680.8p.

Cineworld brought some glamour to the FTSE250, with shares up 4.12p to 67p as it reported booming box office returns in October.

Outsourcer Serco said contracts running the Government’s Covid-19 test-and-trace system have helped the firm surpass revenue and profit targets. Shares closed up 3.2p at 134p.

Online trading firm CMC Markets confirmed it is considering a move to split its financial betting arm from its broking business in a move which would boost returns for stock market investors.

Shares in the company, led by Conservative peer Lord Peter Cruddas, closed up 16.5p at 275.5p.

The biggest risers on the FTSE 100 were Avast up 39.4p at 598.2p; London Stock Exchange Group up 228p at 7,166p; Standard Chartered up 12.9p at 474.5p; Royal Mail up 12p at 445.7p and Johnson Matthey up 55p at 2,328p.

The biggest fallers were Aveva down 94p at 3,265p; Evraz down 16.8p at 603.2p; B&M down 14.4p at 585p; Darktrace down 13.5p at 568.5p and Rentokil down 12.6p at 623.6p.

That’s a wrap from us for the day. Come back here from 7am tomorrow when unemployment figures will set the mood.

Job vacancies at record high

07:48 , Simon English

JOB vacancies hit a record high and unemployment is down to where it was prior to Covid 19.

Figures from the Office for National Statistics show that there were 160,000 more workers on payrolls in October than in September despite the end of the furlough scheme.

read more here

Bain Capital defends LV= deal

Monday 15 November 2021 14:10 , Oscar Williams-Grut

Bain Capital today sweetened its offer for LV= as the private equity company fights to win approval for the controversial deal.

Bain shared fresh details of the proposed takeover and pledged not to saddle the insurer with debts.

The private equity giant said it will invest £264 million to safeguard the pensions of more than 10,000 policy- holders and staff. Bain had previously committed to investing £168 million to fund pension liabilities.

Bain promised to invest £160 million in LV=’s IT infrastructure, the first public pledge on tech. And the investment company said no new debt would be added to LV=’s balance sheet as part of the takeover. LV= will look to reduce its debt pile as soon as possible under Bain’s ownership.

The defence comes as Bain’s takeover of LV= faces mounting opposition from politicians, mutual members and the press.

Read the full story.

McLaren denies rumoured sale

Monday 15 November 2021 13:35 , Oscar Williams-Grut

McLaren has denied reports it has been sold to Audi. Autocar reported that the Formula 1 car maker had been sold.

McLaren said in a statement: “McLaren Group is aware of a news media report stating it has been sold to Audi. This is wholly inaccurate and McLaren is seeking to have the story removed.

“McLaren’s technology strategy has always involved ongoing discussions and collaboration with relevant partners and suppliers, including other carmakers, however, there has been no change in the ownership structure of the McLaren Group.”

FTSE slightly lower in lunchtime trade

Monday 15 November 2021 13:25 , Oscar Williams-Grut

The FTSE 100 is down 9.2 points at 7338 at 1.20pm London time.

Cyber security firm Avast is top of the index, up over 7% after updating the market on the progress of its takeover by NortonLifeLock. The deal has cleared a key regulatory hurdle in the US.

B&M Value retail is at the bottom of the FTSE 100 index, down 4.6%. The company said this morning it plans to raise £250 million in new debt to help pay for general business expenses and costs.

Miners are also still under pressure: Glencore is down 2% after the global COP26 statement on “phasing down” coal and Evraz is also 2% lower.

Deutsche Bank says UK inflation set to spike

Monday 15 November 2021 12:00 , Oscar Williams-Grut

Deutsche Bank’s chief UK economist Sanjay Raja is out with a new note today predicting a spike in inflation.

“After September inflation cooled a little, coming in below expectations, we expect to see a big jump in the October inflation report,” Raja writes.

“We see headline CPI jumping to 4% y-o-y, a near decade high, a tenth above consensus and the Bank of England’s (BoE) projection. Core CPI is expected to shift up to 3.2% y-o-y. On RPI, our models point to a 5.7% y-o-y print.

“Overall, the bulk of price pressures will come from a rise in energy prices, as the Ofgem price cap bumps up. Unwinding VAT cuts should also push up services inflation. Risks to our October projections are tilted slightly to the downside.”

The next inflation reading from the Office for National Statistics comes on Wednesday.

AIM-listed bar chain owner Nightcap hails cheaper rents on sites as it pursues expansion

Monday 15 November 2021 10:56 , Naomi Ackerman

Bar owner Nightcap, behind new sites in the capital including a fresh London Cocktail Club in the heart of the City, today gave an upbeat update to investors in its first annual report.

The AIM-listed chain, which operates premium bars across London, Bristol and Birmingham, recently took over the Adventure Bar Group.

Nightcap today said many of its venues have posted record sales weeks since reopening, and chairman Gareth Edwards said a “silver lining” to the pandemic’s impact has been greater availability of prime sites for the chain to explore.

He said Covid has “had the effect of introducing a degree of reality to the rents being sought by landlords, resulting in sites with lower rents being offered”.

Edwards said this situation provides “an undeniable opportunity for an operator like Nightcap, which is undertaking a “buy-and-build” strategy”.

The chain’s co-founder and former Dragon’s Den star, Sarah Willingham, said: “We are acquiring fundamentally strong businesses that have been weakened by the impact of the pandemic.”

She added: “Most of our sites have posted record sales weeks and our teams have worked tirelessly to meet the demand from customers.”

Shares rose 0.2% this morning.

Heavy metal takes a hit as markets eye inflation

Monday 15 November 2021 10:43 , Simon English

MARKETS were choppy today as the City nervously eyed inflation figures from the Bank of England due on Wednesday.

By consensus inflation will come in at above 3%, but how much higher? The Bank expects it will rise above 5% in the next few months; some investors think the Bank is behind the curve and that its decision to hold rates last week was a mistake.

Mining shares, seen as a hedge against inflation, took a hit today. Glencore lost 7p to 361p, Evraz tumbled 8p to 611p and Antofagasta lost 20p to 1470p.

Only nice bumps for both classes of Shell stock and Royal Mail kept the FTSE 100 from a hard fall and then only just. The main index was down 2.54 at 7344.07.

read more here

Lord Cruddas could do the splits at CMC

Monday 15 November 2021 09:51 , Simon English

CMC Markets could split itself into two under plans being considered by founder and chief executive Peter Cruddas, the Tory peer.

Lord Cruddas is in “very early stage” talks on breaking the trading house into a spread-betting arm and a non-leveraged business that would contain the stockbroking arm and other new investment platforms.

read more here

Cineworld’s UK sales pass pre-pandemic levels thanks to Bond and Dune

Monday 15 November 2021 09:00 , Oscar Williams-Grut

Cinema has had a turbulent year but James Bond has indeed come to the rescue of one of the sector’s biggest chains.

Screen giant Cineworld said on Monday that UK and Ireland sales in October soared 27% above those seen in October 2019.

Ticket sales for Daniel Craig’s final outing as 007 have boomed since its release in late September, and studios have finally begun to release long-awaited films as vaccine rollouts speed up around the world.

Other major releases turbo-charging operators’ revenues over the past month include Denis Villeneuve’s long-awaited Dune and Marvel movie Venom.

Shares are up 4p or 6.5% at 66.7p.

Read the full story.

Sir Martin Sorrell’s S4 Capital strikes 11th deal so far this year

Monday 15 November 2021 08:52 , Oscar Williams-Grut

Sir Martin Sorrell’s new digital agency S4 Capital has struck its 11th deal in as many months as it continues to expand rapidly.

S4 capital’s main subsidiary Media.Monks is merging with Italian firm Miyagi, a content marketing company that works with the likes of Red Bull, Campari, and Danone.

Sorrel said the deal would give S4 an “even stronger” presence in Italy, Europe’s fourth largest advertising market. Miyagi, founded in 2013, employs 70 people.

Separately, S4 today named former Just Eat finance boss Mary Basterfield as its new CFO. Basterfield, who left Just Eat last September, will replace Peter Rademaker from January. Rademaker has been CFO for three years but plans to retire from day-to-day duties.

Shares in S4 dipped 10p or 1.5% to 663p.

Shell to ditch crown in major overhaul

Monday 15 November 2021 08:51 , Simon Freeman

ROYAL DUTCH Shell is to ditch its regal title and become plain old Shell under the FTSE 100 energy giant’s proposals to shift its centre of gravity from the Netherlands to London.

CEO Ben van Beurden and other senior executives will move to the capital full-time as part of what the £130 billion super-major called a “simplification” of its corporate structure.

Its complex dual-class structure will be merged into a single line, in a move designed to free up liquidity in the pool of Class A shares as it presses on with a $7 billion buyback programme.

Its tax residence will be moved to the UK where board and high-level meetings will be held. Analysts suggest that will lead to a one-off demand from exit tax of up to £400 million from Dutch authorities.

The company will still be listed in Amsterdam, London and New York, but will drop the words “Royal Dutch” from its title saying it will no longer meet the criteria for the designation. That ends 130 years of royal association for the company and its forerunners.

The clearer separation from the Netherlands may also ease pressure from a legal ruling at The Hague ordering the company to accelerate reaching emissions reduction targets.

It comes less than a month after the company came under attack from activist investor Third Point which called for its legacy fossil fuel and renewables divisions to be demerged.

Shell said: “The simplification is designed to strengthen Shell’s competitiveness and accelerate both shareholder distributions and the delivery of its strategy to become a net zero emissions business.”

CMC surges on split talk

Monday 15 November 2021 08:39 , Oscar Williams-Grut

Shares in CMC have surged after the company confirmed it was considering splitting into two businesses.

CMC is up 12% this morning after saying it was mulling a split between its leveraged and unleveraged businesses. CMC said: “The Review is consistent with the Board’s continuous evaluation of strategic opportunities to maximise shareholder value.”

Flat open for the FTSE

Monday 15 November 2021 08:23 , Oscar Williams-Grut

The FTSE 100 has opened more or less flat at 7343. Richard Hunter at Interactive Investor calls it a “lackluster” open.

Shell’s restructure plans have helped the stock up 1% in early trade, while AstraZeneca is topping the index with a gain of 1.6%. The pharma giant is benefiting from continued momentum after Friday’s results.

B&M Value Retail is at the other end of the index, down 3.5%.

British Airways-owner IAG is also falling, down 1.3%.

CMC confirms it is considering splitting business

Monday 15 November 2021 08:14 , Oscar Williams-Grut

CMC Markets could split itself into two under plans being considered by founder and chief executive Peter Cruddas, the Tory peer.

Lord Cruddas is considering breaking the trading house into a spread-betting arm and a non-leveraged business that would contain the stockbroking arm and other new investment platforms.

CMC said today that the stock broking arm is growing quickly.

Read the full story.

‘Quieter week'

Monday 15 November 2021 08:11 , Oscar Williams-Grut

With COP26 over and inflation data out of the way, market watchers expect this week to be quieter than last.

Jim Reid, a strategist at Deutsche Bank, and his team write this morning: “After a tiring last week at home and in the markets it’s a quieter week ahead in terms of the calendar, though market attention will continue to focus on the question of who might be appointed as the next Fed Chair, as well as the latest inflation statistics from a number of countries, including the UK (Wednesday). “

UK unemployment data due tomorrow will could also prove market moving.

US President Joe Biden is due to host a virtual meeting with Chinese counterpart Xi Jinping this evening, which will be closely watched.

Serco hikes outlook

Monday 15 November 2021 08:04 , Oscar Williams-Grut

Test and trace operator Serco has upgraded forecasts for full-year profits and revenues thanks in part to Covid-19 work running for longer than it had first anticipated.

Serco said it now expects revenue to be £4.4 billion for the year and underlying profits to be no less than £225 million. In August, the company had guided revenue of £4.3 billion for the full year and underlying profit of £200 million.

Read the full story.

Big changes at Shell

Monday 15 November 2021 07:58 , Oscar Williams-Grut

Shell has announced plans to overhaul its corporate structure and commit to the UK.

Shell said today it would shake up its structure to pay tax in the UK and have key executives relocate to Britain. Shell is currently headquartered in the UK but pays tax in the Netherlands.

As part of the overhaul, Shell will also consolidate its ‘A’ and ‘B’ shares into a single stock.

Shell’s Chair Sir Andrew Mackenzie said: “At a time of unprecedented change for the industry, it’s even more important that we have an increased ability to accelerate the transition to a lower-carbon global energy system. A simpler structure will enable Shell to speed up the delivery of its Powering Progress strategy, while creating value for our shareholders, customers and wider society.”

Investors will be asked to approve the changes in a vote on 5 December.

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