Shares round-up: Mitie roar, Bunzl on a high, N Brown, fundraisings

On a day when the FTSE 100 quickly recovered an initial plunge, these are the big winners and losers.

Outsourcing firm MITIE (LSE:MTO) was London's stand-out stock today in another session dominated by fundraisings and jitters about the threat of a second wave of Covid-19 cases.

The 19% surge for Mitie shares followed a jam-packed set of full-year results, including a planned deal to acquire Interserve Facilities Management for £271 million in cash and shares.

Encouraging updates from internet retailer N Brown (LSE:BWNG) and Auto Trader (LSE:AUTO) failed to push their respective share prices higher, while there were also falls for easyJet (LSE:EZJ), pubs group Young's & Co (LSE:YNGA) and student accommodation group Unite following fundraisings at various discounted levels.

Underlying these developments were ongoing market fears about the state of the Covid-19 recovery after a spike in case numbers in several US states. The FTSE 100 index tumbled 3% on Wednesday and fell in early trading today before eventually finding positive territory.

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Risers included defence giant BAE Systems (LSE:BA.), which climbed 7.2p to 486.8p after forecasting that its second-half performance should be much stronger than the first. Half-year profits are likely to be 15% lower, due in part to reduced volumes in higher margin commercial work.

The safe haven appeal of Bunzl (LSE:BNZL), which supplies shops, factories and hospitals with essential items, also continued. The FTSE 100 index company is trading near to a high for the year, having recently revealed that it had paid back European state support in the wake of better-than-expected trading. Shares rose another 2% to 2,097p, compared with 1,277p in March.

Source: TradingView. Past performance is not a guide to future performance.

Rolls-Royce (LSE:RR.) and ITV (LSE:ITV) were among the biggest top flight fallers with declines of more than 3%, while former blue-chip stock easyJet (LSE:EZJ) was down 6% to 697.6p in the FTSE 250 index after completing a £415 million share placing at a price of 703p, a 5% discount on last night’s price.

The company, which recently returned to flying after an absence of 11 weeks, said the fundraising and other measures meant its cash balances of over £3 billion offered a significant liquidity buffer in the event of further disruption or a more protracted recovery.

AIM-listed pubs company Young's & Co also bolstered its balance sheet with an £88 million share placing. The sale was priced at 1,160p, compared with last night's 1,290p, with retail investors able to participate through the PrimaryBid platform.

Proceeds will go towards improving the estate and in acquisition opportunities, although in the light of temporary pub closures Young's noted that net debt had risen to £227 million from its historical average of £152 million. Shares fell more than 15% to 1,095p.

A much smaller discount was on offer from UNITE (LSE:UTG), which raised about £300 million after issuing new shares at 870p. Encouraged by signs that most universities will stage in-person teaching this autumn, UNITE wants the proceeds to help pursue growth opportunities in London and provincial markets. Shares were 7p lower at 890.5p today.

Auto Trader was one of the first companies to take the opportunity to issue new shares, with its fundraising on 1 April securing £186 million towards strengthening its balance sheet.

The online automotive marketplace has been among the most resilient performers in the FTSE 100 index since then, despite being loss-making in April and May as most car showrooms remained closed until the start of this month.

Visitor numbers and enquiries have quickly rebounded to record levels, but Auto Trader shares fell back 7.2p to 518.5p today after it also disclosed a 3% decline in the average number of retailers on its platform. Profits for the year to 31 March were 4% higher at £251.5 million.

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There were also some hopeful signs on the trading front from online fashion chain N Brown, with product sales down 21% in the last three weeks compared with 28% across the first quarter. Cash collections in its financial services operation have stabilised, despite guidance from the City regulator giving customers the option to defer payments.

Shares in the Jacamo and SimplyBe owner were down 3% at 37.75p at one point, having rallied off their April low of just 10p.

The improvement for Mitie shares to 95p - the highest level since the March sell-off - came after it revealed its business was proving more resilient to Covid-19 than initially expected.  Revenues in April and May were £301.4 million, which is 12% lower than a year earlier.

Source: TradingView. Past performance is not a guide to future performance.

It plans to strengthen its balance sheet with a fully underwritten rights issue to raise £201 million, while it has also extended its £250 million revolving credit facility to the end of 2022.

CEO Phil Bentley called the proposed Interserve deal a transformative acquisition that will expand the footprint of the business to create the UK's largest facilities management company.

He added:  

"The transaction will better balance our public and private sector divisions, driving greater returns from the investments we have made in technology and customer service over the past three years.”