LONDON BRIEFING: Consumer Products Firm Supreme Adds To 2021 IPOs

(Alliance News) - New listings have continued to flood onto the London market early in the new ...

Alliance News 27 January, 2021 | 8:16AM
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(Alliance News) - New listings have continued to flood onto the London market early in the new year, as companies look to the future, and also get their initial public offerings out before the pandemic gloom potentially gets even worse.

With large-size floats by bootmaker Dr Martens and card seller Moonpig still to come, fast moving consumer products manufacture Supreme priced its IPO with a plan to start trading on AIM on Monday next week.

Supreme said it placed 5.0 million shares at 134 pence each to raise GBP67.5 million. Of this, GBP60.0 million is for selling shareholders, and GBP7.5 million from new shares for the company, which it said will be used to pay off debt.

Supreme will have a GBP156.1 million market capitalisation and 43% free float.

Berenberg acted as sole global coordinator and broker, while Grant Thornton UK was nominated advisor.

Supreme supplies products across five target categories: batteries, lighting, vaping, sports nutrition & wellness, and branded household consumer goods. It recording adjusted earnings before interest, tax, depreciation and amortisation of GBP16.2 million on revenue of GBP92.3 million in the financial year that ended March 31 last year.

"I am deeply proud of the business we have developed and believe our flotation on AIM will provide Supreme with the tools with which to capitalise on a number of exciting growth opportunities," said Chief Executive Officer Sandy Chadha. "We have created a profitable business of significant scale, underpinned by a platform which provides a seamless route to market for a number of leading brands and product categories."

Here is what you need to know at the London market open:

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MARKETS

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FTSE 100: down 0.4% at 6,625.87

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Hang Seng: down 0.2% at 29,344.10

Nikkei 225: closed up 0.3% at 28,635.21

DJIA: closed down 22.96 points, or 0.1%, at 30,937.04

S&P 500: closed down 5.74 points, or 0.2%, at 3,849.62

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GBP: up at USD1.3755 (USD1.3737)

EUR: unchanged at USD1.2160 (USD1.2162)

Gold: down at USD1,849.96 per ounce (USD1,854.00)

Oil (Brent): up at USD56.30 a barrel (USD55.87)

(changes since previous London equities close)

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ECONOMICS AND GENERAL

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Wednesday's Key Economic Events still to come

World Economic Forum's Davos Agenda virtual meeting continues.

0700 EST US MBA weekly mortgage applications survey

0830 EST US advance report on durable goods

1030 EST US GfK consumer climate survey

1400 EST US Federal Reserve interest rate decision

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The UK could see another 50,000 deaths from coronavirus, a scientist advising the government has warned, as the prime minister said he was "deeply sorry" for every life lost. Boris Johnson insisted he takes "full responsibility" for the response to the pandemic and said "we did everything we could" to minimise suffering as the government's figure for coronavirus deaths passed 100,000. Separate data published by statistics agencies places the toll at 115,000. Labour leader Keir Starmer said the milestone was a "national tragedy" and accused the government of being "behind the curve at every stage" in its response to the pandemic, ahead of grilling Johnson during Prime Minister's Questions on Wednesday. Home Secretary Priti Patel is widely expected to announce a limited plan for new arrivals in England to quarantine in hotels when she later details to the House of Commons border protections against new coronavirus variants arriving from overseas.

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London was the only region of Britain to register an increase in the supply of fresh homes coming to market in the first two weeks of 2021, according to analysis. Across Britain generally, the supply of new properties dipped by 12% compared with early 2020, but in the capital there was a 12% increase, Zoopla said. The new stock in London is mainly made up of flats, the research suggests. This is partly due to home-owners looking to trade up to houses, and investors looking to sell homes as rents fall, Zoopla said.

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Asking rents in some of the UK's biggest city centres saw annual falls of up to 12% in the last three months of 2020, a study has found. Inner London has been hardest hit, with average asking rents falling annually by 12%, followed by Edinburgh city centre, where the drop in asking rents was also in double digits at 10%, and Manchester city centre, where they were down by 5.3%, according to Rightmove. The study looked specifically at the centres of 10 of the biggest cities around Britain. In all of the cities there has been a shift upwards in the number of tenants who currently live in a city inquiring about properties outside that city, Rightmove said, as the popularity of a quieter life and more space driven by lockdown continues.

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BROKER RATING CHANGES

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BERENBERG RAISES INTERTEK TO 'BUY' ('HOLD') - TARGET 6450 (5750) PENCE

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BARCLAYS CUTS BABCOCK TO 'UNDERWEIGHT' ('OVERWEIGHT') - TARGET 145 (347) PENCE

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GOLDMAN SACHS REINITIATES CENTRICA WITH 'BUY' - PRICE TARGET 67 PENCE

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JEFFERIES RAISES GREENCORE TO 'BUY' ('HOLD') - TARGET 150 (106) PENCE

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COMPANIES - FTSE 100

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Fresnillo said fourth-quarter production was in line with expectations, with silver and gold output both falling on a year ago. Quarterly attributable silver production was 13.0 million ounces, down 6.0% on a year ago and 2.5% lower than the third quarter of 2020. This was driven by a lower ore grade and volume of ore processed at the Saucito mine, mitigated by a higher ore grade at the San Julian disseminated ore body. Quarterly attributable gold output was 215,600 ounces, down 7.8% on a year ago but up 25% on the third quarter of 2020. "This followed a weaker 3Q20 due to Covid-19 operational restrictions earlier in the year which resulted in lower volumes of ore deposited at our open pits during 2Q20 and subsequently affected the recovery cycle at the leaching pads in 3Q20," Frensillo explained. Full year attributable silver production was 53.1 million ounces, down 2.9% on 2019, while full-year gold production was down 12% at 769,600 ounces. For the year ahead, Fresnillo expects silver production in the range of 53.5 million to 59.5 million ounces and gold output for 2021 around 675,000 to 725,000 ounces.

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AstraZeneca's boss insisted Tuesday that the company was not selling vaccines ordered by the EU to other countries at a profit, after delayed orders sparked fury from EU leaders. The pharmaceutical firm admitted last week that it would not meet its contractual delivery commitments to the EU because of "reduced yields" in its European supply chain. That prompted European Health Commissioner Stella Kyriakides to announce that the EU plans to start tracking vaccine shipments exported to non-member countries – a sign of growing distrust. "The EU wants to know exactly which doses have been produced where by AstraZeneca so far, and if or to whom they have been delivered," she said Monday. AstraZeneca's Chief Executive Pascal Soriot sought to calm the situation on Tuesday, acknowledging that European governments were growing "aggravated or emotional" due to repeated stumbling blocks in their vaccine rollouts. "Our team is working 24/7 to fix the very much issues of production of the vaccine itself," he told the LENA European newspaper alliance.

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BT announced plans to recruit more than 400 apprentices and graduates for its September 2021 intake. The roles will be in areas including engineering, customer service, applied research and cyber-security, as well as supporting the company's plans to build and extend the latest 5G networks around the UK. BT has recruited more than 1,600 apprentices and graduates over the past two years. The new roles are spread across a number of locations including Belfast, Birmingham, Bristol, Cardiff, Dundee, Edinburgh, Ipswich, London and Manchester.

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COMPANIES - FTSE 250

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FDM Group said it delivered a "solid" performance in the second half of 2020, with its full-year results seen in line with its expectations. The IT recruitment, training and consultant deployment provider said revenue for 2020 is expected to be GBP268 million, down from GBP272 million in 2019, and adjusted pretax profit is forecast at GBP42.0 million, lower than GBP54.5 million the year before. Given the "continued solid performance, strong cash position and encouraging prospects," FDM declared a second interim dividend of 13.0 pence, which follows a 18.5p interim dividend paid in September. "The board confirms that going forward it plans to resume the group's normal dividend policy and timetable, commencing with the final dividend for the year to 31 December 2020," said FDM. The company added that the current year has started "promisingly" with "encouraging" demand levels.

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Brewin Dolphin said total funds hit a record level in its first quarter. Total funds increased by 8.0% to a record GBP51.4 billion in the quarter ended December 31 from GBP47.6 billion at the end of September, with total discretionary funds up 8.3% to GBP44.6 billion. Total quarterly income increased by 7.0% to GBP95.9 million, driven by strong market performance in the quarter and continued high levels of commissions. "We had a strong start to our financial year and saw growth across both our direct and indirect business. We are consistently delivering positive inflows, even with the tightened social distancing restrictions imposed in November and December 2020," said Chief Executive Robin Beer.

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HomeServe said it has appointed former DCC chief executive Tommy Breen as a non-executive director and chair-designate, to succeed Barry Gibson. Gibson has been chair of HomeServe since 2010 and was appointed for one final term in April 2019. Breen was CEO of sales, marketing and support services group DCC until 2017, and will join the HomeServe board with immediate effect. Breen will become chair on May 19, after HomeServe publishes its full-year results. Breen also is senior independent director of plastics and fibre products manufacturer Essentra.

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COMPANIES - LONDON MAIN MARKET AND AIM

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Tullow Oil said it expects 2020 revenue to be about GBP1.4 billion, as working interest oil production averaged 74,900 barrels of oil per day and the average realised price was USD50.8 per barrel. It expects 2021 production to decline to 60,000 to 66,000 bopd, due to a drilling hiatus, a planned shutdown on Jubilee in September, and deferred development drilling on Simba in Gabon.

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COMPANIES - GLOBAL

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US drugstore giant Walgreens Boots Alliance on Tuesday named Starbucks executive Roz Brewer as its new CEO – an appointment that US media said would make her the only Black woman leading a Fortune 500 company. "Brewer brings to WBA a proven track record of leadership and operational expertise at multi-national corporations," WBA said in a statement, adding outgoing CEO Stefano Pessina would become executive chairman of the board. The Wall Street Journal said there are just four Black male CEOs of Fortune 500 companies – a ranking of America's largest 500 companies. Meanwhile, Starbucks reported results on Tuesday, slightly raising its annual earnings guidance despite a first-quarter which saw the Seattle, Washington-based coffee-house chain's revenue hit by store closures and reduced footfall due to Covid-19 restrictions, with revenue down 4.9% on a year before.

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Wednesday's Shareholder Meetings

AJ Bell PLC - AGM

Cairn Homes PLC - EGM re replacement of CREST with Euroclear

Critical Metals PLC - AGM

Lowland Investment Co PLC - AGM

Marston's PLC - AGM

Renew Holdings PLC - AGM

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By Tom Waite; thomaslwaite@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Intertek Group PLC 5,356.00 GBX -2.44
Babcock International Group PLC 259.70 GBX -3.99 -
Centrica PLC 52.76 GBX 1.46
Greencore Group PLC 151.90 GBX -1.87 -

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