Few investors in London quit their tobacco stock investments yesterday, despite reports that Big Tobacco was planning to buy back shares in order to boost the share price.
Imperial Brands (owner of L&B, JPS, and Lucky Strike cigarettes) and British American Tobacco with its Lucky Strike brand are among those who have been affected. Investec believes it’s “entirely plausible” that share buybacks by the respective companies could grow in size. Alicia Forry said that this would help share prices as the long-awaited buybacks have not been re-rated in any meaningful way. She said that the demand for smoking alternatives with less harm, such as vapes or heated tobacco, was robust and had “plenty” of runway.
Imperial’s shares rose 20p or 1.2 percent to £17.621/2, as investors became more confident about the prospects of the sector. BAT’s stock closed the day largely flat.
Other defensive stocks were also on the FTSE 100 risers board. Unilever’s purchase the frozen yogurt brand Yasso propelled the consumer goods group to rise 53 1/2p or 1.4 percent to £40.21. Reckitt-Benckiser which owns Nurofen & Lemsip advanced 118p or 2 percent to £60.24.
The relative safety of healthcare shares, such as AstraZeneca rose 176p or 1.5 per cent to £116.86. Meanwhile, a rise in oil prices boosted Shell30p or 1.3 percent to £23.341/2.
The FTSE 100 closed at 7,628.26, up by 25.52 points or 0.3 percent, as a result of the move to defensive stocks. The FTSE 250, which is more focused on the UK, dropped 136.09, or 0.7 percent, to 19,039.41.
A lot of the corporate news yesterday generated a negative response. The announcement of Antonio Simoes’ appointment as the new chief executive officer of Legal & General sent shares of the insurer down by 6p or 2.5 percent to 232p. Halma suffered a loss of 83p or 3.4 percent to £23.46 due to a weaker outlook.
Bunzl shares fell 46p or 1.5 percent to £30.60, after the FTSE100 firm, which provides items like food packaging, rubber glove and detergent, stated that it expected underlying revenues to grow at a flat rate in the first half of the year.
Melrose Industries – the former industrial conglomerate – fell 10 3/4p or 2.1% to 513 1/4p after the company’s boss Simon Peckham had sold 2,000,000 shares. The company said that this was due to a “change in personal circumstances”.
There was some good news. JTC the global fund manager advanced 53 1/2p or 7.4 percent to 776 1/2p following a £62 million share placement to fund its $270 millions acquisition of South Dakota Trust Company.
RHI Magnesita shares soared 42p or 1.6 percent to £26.22, after the company said that operating margins and profit had increased in the first five month of the year.
Investors in Amte Power were scared off the main market after the electric batteries maker warned it only had four weeks to raise cash urgently. Investors fled in horror when Amte Power issued the ultimatum, and its shares crashed to a new record low of 12 3/4p after falling by 38 1/4p or 75 percent.
Shares of Eden Research (an Aim-listed developer of biopesticides) rose 1 1/2p or 22.4% to 8 1/4p. This was their highest level since 2021 after the company signed a distributor agreement with Anasac for its Mevalone to be used on Colombian cut flowers.
Amanda Holden, TV’s Amanda Holden, endorses Simply Be JD Williams Jacam
Online fashion group, behind brands such as Simply Be, JD Williams, and Jacamo has blamed bad spring weather for the slowdown of first-quarter sales. It also issued a new warning about the fragility in consumer confidence.
N Brown stated that challenging trading conditions continued to affect its performance. Group revenues fell 9.9 percent to £148.7 millions in the 13-week period ending June.
Steve Johnson, N Brown’s CEO said: “We expect the weak consumer confidence will continue into the 2024 fiscal year. We are taking a disciplined management approach and driving margin improvement while investing in the business to achieve medium-term growth.”
Manchester-based retailer founded in 1859 was among the first to list its products. The group announced earlier this month that its profit had dropped to £19.2million from £71.1million last year due to “challenging market conditions”.
After the disappointing update, the shares fell by nearly 3/4p or 2.3% to 23 3/4p.