Shares round-up: Mitchells & Butlers, Air Partner, LondonMetric

Despite rising infection rates, risk appetite has been boosted by optimism over a coronavirus vaccine.

2nd July 2020 13:30

Despite rising infection rates, risk appetite has been boosted by optimism over a coronavirus vaccine.

Three of the best-performing stocks during the Covid-19 lockdown - Air Partner (LSE:AIR), LondonMetric Properties (LSE:LMP) and Avon Rubber (LSE:AVON) — needed no help from a resurgent London market today after their latest updates powered shares higher.

The trio's success was built around a promised dividend hike from LondonMetric, stronger-than-expected trading at Air Partner and a transformational business sale by Avon Rubber.

Avon's 3% surge took shares to a new record, while Air Partner and LondonMetric are trading at levels seen at the start of the year. Their performances were among the highlights of an upbeat session in which risk appetite was boosted by optimism over a coronavirus vaccine.

The FTSE 100 index rose 50 points to 6,207 as it emerged that an early vaccine trial by a German firm had shown significantly elevated levels of virus-fighting antibodies. Rolls-Royce (LSE:RR.) and BA-owner International Consolidated Airlines Group (LSE:IAG) were among the biggest beneficiaries of the improved sentiment as their share prices rose by more than 3%.

Associated British Foods (LSE:ABF) was up 5% after its update from the first weeks of trading at re-opened Primark stores offered encouragement. With most stores now back trading, the company has placed orders worth over £800 million for autumn/winter season stock.

The update brought cheer across the retail sector, leading to gains of more than 2% for Next (LSE:NXT) and JD Sports Fashion (LSE:JD.). In the FTSE 250 index, pubs chain Mitchells & Butlers (LSE:MAB) jumped 5% to above 200p after publishing half-year results on the eve of most of its pubs reopening this weekend.

Sales at the All Bar One and Harvester owner had been on the front foot prior to the pandemic, but lost trade near the end of the period and a Covid-related property write-down meant it recorded a £121 million half-year loss. It has already re-opened its bars in Germany, where trading offers encouragement for the UK following week-on-week improvements in sales.

Airline easyJet (LSE:EZJ) gained 5% to 700p thanks to stronger market confidence, although the former blue-chip stock is still half the price seen prior to being forced to ground its fleet in late March. The shutdown has been to the advantage of charter business Air Partner (LSE:AIR), which has met corporate needs by laying on shuttles in Europe and the United States.

The freight division also continues to see high demand, with the business overall performing significantly ahead of budget in June. Early indications for this month suggest that Air Partner is returning to pre Covid-19 levels, including a recovery for its private jets operation.

The shares rose 8% to 91p, having rebounded from just 17p in mid-March to their highest level since January.

The chart for FTSE 250 index LondonMetric Property shows a similar V-shaped recovery after shares rallied 56% from their March low of 137p. They were up 2% to 215p today after the Real Estate Investment Trust said 95% of its advanced rent payments due for the period up to 24 June had been collected or were being paid monthly.

In light of the strong rent collection and following the completion of disposals worth £54.5 million, LondonMetric said it planned to increase the first quarter dividend due to be announced in August and paid in October.

LondonMetric was formed from a merger of London & Stamford Property and Metric Property Investments in 2013. It has grown assets under management from £1.2 billion to £2.3 billion and pivoted the portfolio towards distribution and urban logistics following over £4 billion of sales and acquisitions.

This shift away from retail parks, offices and residential has been well-timed, with recent annual results showing a 24% rise in net rental income to £115.9 million.

One of the strongest performing stocks during the pandemic crisis has been Avon Rubber (LSE:AVON), with shares rallying by 63% since the start of 2020 as the maker of masks and personal protection systems benefits from strong demand from military and first-aid responders.

That side of its business will now be strengthened after Avon today announced a £180 million deal to sell its other operation providing milking solutions to dairy farmers.

The disposal of milkrite | InterPuls will enable a one-off contribution of £20 million to strengthen the company's UK pension scheme, as well as boost the balance sheet for further acquisitions to grow the Avon Protection business.

Shares rose 3% to 3,400p, which is another record for the £1 billion-valued stock.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

Get more news and expert articles direct to your inbox