It’s a less predictable day, but as always there are winners and losers. Here are the interesting movers.
A bleak day for Lloyds Banking Group (LSE:LLOY) and other financial stocks was offset by cheer elsewhere after updates from companies including SSE (LSE:SSE), Sabre Insurance (LSE:SBRE) and B.P. Marsh & Partners (LSE:BPM).
Lloyds was worth less than £20 billion after its shares fell another 3% to just above 27p, albeit still higher than the low of 24p seen last month. A combination of rising unemployment figures, Brexit uncertainty and the prospect of negative interest rates kept investors on the sidelines, particularly as progress towards a Covid-19 vaccine is still far from clear.
The risk-off session meant the FTSE 100 index shed half a percentage point to return below 6,000, despite a strong session for energy company SSE after a deal worth £1 billion to sell its 50% stake in energy-from-waste assets at Ferrybridge and Skelton Grange in West Yorkshire.
The move is part of SSE's plan to raise at least £2 billion from disposals by autumn 2021 as it looks to support investment in low-carbon businesses over the next five years. The disposal sent shares to the top of the FTSE 100 risers board, up 49.5p to 1,375p.
The domestic-focused FTSE 250 index, meanwhile, bore the brunt of the latest Covid-19 restrictions after falling 0.8% to just above 18,000.
Sabre Insurance initially bucked the gloom in the financials sector and the FTSE 250 index after its third quarter update promised investors an “attractive” dividend from 2020 trading.
The underwriter is seen as one of the most disciplined players in the motor insurance sector, having focused on optimising profit rather than chasing volume. This has meant prices have reflected its assumption for claims and other cost inflation of around 10% a year.
Making prices appropriate for the life of a policy rather than just the next few months may serve the company well in 2021 if some competitors need to catch up pricing levels.
Sabre's strong capital generation supports a solvency coverage ratio of 186%, which is well above its 140% to 160% target range and should mean an attractive dividend for the year.
Numis Securities anticipates a full-year payment of 20p a share, which at Sabre's current valuation points to a 2020 dividend yield of more than 7%.
Shares have failed to respond to the income potential and are near to their lowest level since the market sell-off in March, with the stock today surrendering a bright start to fall 3p to 250p. Numis has a price target of 310p.
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On AIM, shares in agent-owned property portal OnTheMarket.com (LSE:OTMP) have recently been trading at close to highs for the year after a strong rebound for the UK property market. This was shown in figures published today for August and September, with website visits averaging over 26 million and leads above 1.9 million.
Assuming the UK housing market remains open and active, the group expects revenues and costs to increase in the second half year to 31 January and lead to a broadly breakeven adjusted operating profit position for the full financial year.
House broker Shore Capital sees “considerable scope” for medium-term organic growth and share price upside, as long as the property market holds firm. Zeus Capital noted that the company benefited from about £10.3 million of net cash, equivalent to 14.3p a share, as well as a capital light model, long-term contracted revenues and flexibility to manage its costs.
Shares were broadly unchanged at 101p after today's half-year results, having rebounded from the 30p seen in March.
B.P. Marsh & Partners put in one of the strongest performances in the AIM All-Share index after the investor in early stage financial services business said it had grown its net asset value (NAV) in difficult market conditions. NAV per share at the end of July was recorded at 396.2p, compared with 380.1p in January.
The total shareholder return of 4.8% for the half-year included a dividend of 2.22p paid in July, leaving the company with a cash balance of £1.2 million and undrawn loan facility of £3 million.
The group said it was well positioned to carry out new investments, with a focus on specialist SME sectors in financial services. Shares rose 15% to 270p.
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