British billionaire Richard Branson has sold about $300m in Virgin Galactic stock, tapping his biggest listed asset again to prop up his business empire during the pandemic.
The 71-year-old offloaded almost 10.5m shares – about 4pc of the space-travel company – through a company he controls, leaving him with an 18pc stake, according to a regulatory filing.
The proceeds will support Branson’s travel and leisure businesses, as well as help develop new and existing ventures, a Virgin Group representative said. Branson, 71, remains Virgin Galactic’s biggest shareholder.
The company’s shares fell more than 5pc in premarket trading in New York.
Yesterday Credit Suisse said Virgin Galactic’s stock price would struggle to move higher until the company schedules more flights.
12:37 PM
FTSE 100 up 0.4pc
Time for a lunchtime check up on the FTSE 100.
The blue-chip index is up 0.4pc at 7,220.45, still headed for it’s fourth straight week of gains.
The FTSE 250 mid cap index was also up 0.2pc at 23,802.80 points.
12:10 PM
Rooney Anan acquires Coaching Inn Group
The former boss of pubs giant Greene King will acquire a group of 18 historic coaching inns located in UK market towns.
Rooney Anand, who ran Greene King for 14 years, snapped up The Coaching Inn Group’s 18 historic coaching inns through his investment vehicle, RedCat Pub Company.
The Coaching Inn Group was founded in 1996 and has sites in the Cotswolds, Peak District and Cambridgeshire.
Current boss Kevin Charity and finance chief Edward Walsh will continue to lead and run the business within RedCat, and to build its presence, scale and momentum, the company said.
The amount paid was not disclosed.
11:53 AM
Amazon moves Lord of the Rings from New Zealand to UK in blow for Ardern
Amazon will film its $1bn Lord of the Rings prequel series in Britain rather than New Zealand in a “nightmare scenario” for the Pacific nation’s Tolkein tourism and a political blow to the prime minister, Jacinda Ardern, reports Matthew Field.
He writes:
The online giant will sever the 20-year relationship between NZ and JRR Tolkein’s “Middle Earth” after it completes the first season of its series set thousands of years before the events of The Hobbit and The Lord of The Rings trilogy.
Post production will conclude in June 2022 and pre-production of season two will begin in the UK at the same time. Amazon said the shift aligned with its plans to ramp up its studio capacity in Britain.
Read Matthew’s full story here.
11:25 AM
Olam Ingredients spin off to list in London
Major Singaporean food company Olam International has decided to list its recently spun off ingredients division on the London Stock Exchange in the first half of next year.
The listing of Olam Food Ingredients (OFI) would be a boost for the LSE as it attempts to move away from its reliance on natural resource firms as environmental concerns rise up investors’ agendas.
OFI works with some of the world’s best-known food and drinks brands, has 15,000 employees, operates more than 100 manufacturing plants and sources commodities including cocoa beans, coffee and nuts from 2.6m farmers across the globe.
Anantharaman Shekhar, chief executive of OFI, said:
The primary listing on the LSE will give us access to London’s large and diverse investor base, with its deep and liquid capital markets, and enable us to benefit from its strong understanding of and research coverage across the food and beverage sector.
The concurrent listing in Singapore will also enable us to retain our strong local shareholder base and further tap into growing investor appetite in Asia.
Olam is majority-owned by Temasek Holdings, Singapore’s state-backed investment company, which holds a 53.2pc stake, with 15pc owned by Japan’s Mitsu
11:00 AM
Staff shortages faced by 44pc of businesses says IoD
Almost half of businesses – 44pc – are currently experiencing staff shortages, according to a new survey from the Institute of Directors (IoD).
Of those businesses, 65pc say shortages are linked to the UK’s long-term skills gap, 40pc are missing EU workers and 21pc says shortages are due to staff having to isolate.
Roles are hardest to fill in the ‘professionals’ and ‘associate professionals’ categories, according to directors although the sector worst hit by shortages is hospitality.
Employers are keen to re-build following an incredibly turbulent 18 months for business. But the issue of labour shortages is proving disruptive across a huge range of sectors and at all levels, says Joe Fitzsimons, senior policy advisor at the IoD.
“The long-term skills gap combined with both a reduced talent pool since leaving the EU, and the immediate impact of the ‘pingdemic’, are the primary pressure points. The resultant rising wage bill is the next bitter pill to swallow. It is understandable that directors are very concerned.”
The survey found that 81pc of directors would support relaxing immigration requirements in response.
10:33 AM
Adidas to sell Reebok
Adidas has announced it will sell its Reebok brand to New York based Authentic Brands for €2.1bn (£1.8bn), a significant reduction on the price it paid for the brand.
Adidas bought Reebok for €3.1bn back in 2006 in an acquisition intended to help the company compete with rival Nike.
However investors have recently been pressuring Adidas to offload Reebok and double down on its core brand.
Adidas shares rose 1.8pc after the announcement.
10:16 AM
Anglo American spin out reports rocketing revenue
The South African coal business that was spun out of British miner Anglo American has reported a sixfold increase in revenue.
Thungela Resources said that revenue had grown by more than 500pc to 10 billion South African rand (£490m) in the first six months of the year.
The business also recorded a 351 million rand (£17m) pre-tax profit from a 122 rand (£6m) loss.
“Thungela is pleased to announce a significant increase in interim earnings as we report for the first time as an independent, focused coal export business,” said chief executive July Ndlovu.
He said: “After a month of operating as a standalone business, we are cash positive and well positioned to deliver on our targets.
“We are pleased to note the recent recovery of global thermal coal prices. These are reflective of the continued demand for high quality coal amid challenging supply dynamics across many regions.”
10:01 AM
More on Avon Protection’s profit downgrade
My colleague Alan Tovey writes:
Gas mask and body armour company Avon Protection’s profit downgrades for the coming two years are “significant” but the company’s prospects “remain compelling” according to house broker Peel Hunt.
The broker examined Avon’s 42pc and 19pc reductions to pre-tax profit forecasts for 2021 and 2022 caused by coronavirus-related order delays, supply chain disruption and a tightening US labour market.
Peel Hunt called the problems “temporary, outside of Avon’s control, and don’t impact the underlying contract or relationship with the customer” – thought to be the US military.
Avon said the delays to shipping products meant it has built up inventory and is facing delayed payments from customers which are likely to remain until the end of the year.
Peel, predicted a “significant negative share price reaction” – and there has been, with a 25pc plunge – but talked up Avon, saying the business “remains in great shape”, calling the share price fall a buying opportunity.
09:49 AM
Money round-up
Here’s the daily round-up from The Telegraph’s Money team:
09:38 AM
Expert reaction: FTSE up 0.3pc
AJ Bell financial analyst Danni Hewson comments:
The FTSE 100 looks like rounding off a decent week in fine fashion on Friday as investors shrugged off a Delta variant linked sell-off in Asia.
However, the closure of Chinese ports in an effort to control the spread of the more infectious Covid strain could add to global supply chain disruptions and become something the market cares about in fairly short order.
For now UK stocks are taking their cue from the US, where the S&P 500 closed at a record high for a third consecutive day.
09:31 AM
Airbnb warns of Covid uncertainty ahead
Airbnb reported its second-quarter loss had narrowed to $68m but warned that new coronavirus variants will make future bookings harder to predict.
“We do not yet know how willing people will be to travel in the fall as compared to summer,” the company told shareholders last night, prompting its stock to fall 5pc.
Revenue rose 10pc over 2019 to $1.34bn and Airbnb said it expects to post record revenue in the third quarter, “well above” the 2019 peak of $1.65bn.
That is based on a sharp rise in unearned fees, or revenue that, based on bookings, the company expects to receive after customers check in.
The company is spending heavily to recruit new hosts. CEO Brian Chesky said it is tweaking its product to appeal to people who are increasingly flexible about when and where they travel and who combine work and leisure for long trips.
Airbnb said that stays of at least 28 days are its fastest-growing category.
09:10 AM
Record deal activity propels profits at magic circle law firms
Record deal activity has propelled four elite “Magic Circle” London law firms to report bumper financial results in the year to April, with transactional lawyers around the world advising on over $4 trillion worth of deals according to data compiled by Bloomberg.
Freshfields Bruckhaus Deringer led the way posting a 5pc revenue boost to £1.6bn for the financial year, much of the growth was attributed to their work deals including AstraZeneca’s $39bn acquisition of Alexion Pharmaceuticals and the sale of Cazoo for $7bn, one of the largest ever SPAC deals.
Clifford Chance reported an 8pc increase in partnership profit and a 1pc rise in revenue, its sixth straight year of growth after helping Pfizer on its vaccine partnership with BioNTech.
The surge in deals isn’t slowing. So far this year, around $3 trillion of global deals have been reported and it’s the busiest ever summer for merger activity.
At Linklaters, revenue climbed over 2pc to £1.6bn while pretax profit jumped over 12pc. Meanwhile, Allen & Overy saw 5pc revenue growth over the same period to £1.7bn and a rise in pretax profit of 19pc.
The fifth member of the Magic Circle, Slaughter and May, does not disclose its financial results.
08:49 AM
Pound falls to three week low
The Pound has fallen to its lowest price against the dollar since July 23, as the greenback gained on speculation the US Federal Reserve could announce plans to reduce its stimulus in the coming weeks.
Data on Thursday showed US producer prices posted their largest annual increase in more than a decade in the 12 months through July.
While the data comes a day after consumer price data that indicated inflation may be peaking, analysts said producer price data helps the case for removing some of the Fed’s stimulus.
“With producer prices feeding into consumer prices, this suggests that the CPIs may have not hit a ceiling yet, and may have increased again bets on a potential tapering announcement by the Fed in September,” said Charalambos Pissouros, head of research at JFD Group.
The Fed will announce a plan to taper its asset purchases in September, according to a solid majority of economists polled by Reuters.
08:41 AM
CMA investigating ‘immediate’ action on PCR testing industry
The CMA has said it is investigating “immediate actions” the Government could take to tackle concerns about price, reliability and quality of PCR coronavirus tests.
Health secretary Sajid Javid, wrote to the Competition and Markets Authority earlier this month asking the CMA to investigate the PCR industry.
The CMA said it is exploring whether individual providers are breaching their obligations under consumer but in the meantime it was also looking at “whether there are any immediate actions that the Government could take in the meantime.”
George Lusty, CMA Senior Director for Consumer Protection, said in a statement last night:
It is essential that people paying for PCR tests are treated fairly, get what they pay for and that their rights are respected when things go wrong. We will not hesitate to take enforcement action if we find evidence that PCR providers are breaching consumer law.
We are also working closely with DHSC to get the data we need to identify the cause of any wider problems in the PCR testing market, and to ground our advice on what action may be needed.
This is a particularly pressing issue just now for families hoping to enjoy a well-earned holiday after such a difficult year, and for those reuniting with friends and relatives overseas. That is why we are also providing ongoing support to DHSC, including on steps that could be considered in the interim, before the rest of our work on the PCR testing market is concluded.
08:22 AM
Gatwick Airport reports £244m loss as passenger numbers collapse
Gatwick Airport has called on the government to simplify travel rules and remove testing requirements for double-vaccinated, as it reported “very low” passenger numbers of just 569,000 in the first six months of the year.
Although the airport remained open, the collapse in passenger contributed to a £244.6m loss for first half of the year, the company said.
The company warned the government against “squandering” its vaccine advantage and allowing travel to lag behind the US and Europe.
Chief executive, Stewart Wingate said:
In the UK we are all emerging to enjoy more freedoms due to our world class vaccination programme, however we are in danger of squandering the advantage that vaccination programme has afforded us for international travel. Our Government needs to act now and remove unnecessary and costly PCR testing requirements for passengers, particularly for those double vaccinated.
UK travel recovery should not be allowed to lag behind the US and Europe. Passengers need the travel rules simplified so they can choose to travel more freely and enjoy much needed breaks and reunions with family and friends which are currently much more attainable for those in Europe and the US.
08:08 AM
FTSE risers and fallers
The FTSE 100 is still up 0.4pc this morning, with only muted risers and fallers. Rolls Royce rose 1.5pc while the biggest losses came from Hagreaves Lansdown, down 1.3pc.
More dramatic movements however are taking place on the FTSE 250. Among the mid-caps, Babcock was the top riser, up 6.3pc, after announcing the sale of its Frazer-Nash consultancy while Avon Protection was weighing on the index, down 25pc, after reducing its revenue guidance.
07:48 AM
Avon Protection plummets 25pc
Shares of FTSE 250 gas mask maker Avon Protection have plummeted 25pc this morning, after the company said it was reducing its revenue guidance as a result of supply chain disruption.
“The impact of delays in the receipt of orders, supply chain disruption and a tight U.S. labour market has increased significantly through the second half of the financial year,” the company said in a trading update.
“Whilst this COVID-19 related disruption is expected to be temporary in nature, the impact has resulted in a reduction in our revenue guidance for FY21 to between $245m – $260m”.
The company said extended lead times for electronic and textile components had delayed the shipment of around $6m worth of orders.
“The Board is confident that the delayed orders will be received over the coming months, but expects supply chain disruption and a tight U.S. labour market to persist into next year,” it added.
07:33 AM
Babcock sells consultancy for £300m
Defence contractor Babcock said today it will sell its Surrey-based Frazer-Nash Consultancy to American engineering giant KBR in a deal worth £293m.
Last month, Babcock reported a £1.6bn operating loss for the year, and net debt – although falling – lay at £1.4bn.
Babcock had already revealed plans to sell businesses worth £400m over the next 12 months. The sale of Frazer-Nash Consultancy will fill a large part of that hole, and the money will be used to pay off debt.
On Friday, Mr Lockwood said: “We are making real progress on our plan to streamline and focus the group on our key markets.
“Divesting at least £400 million of businesses in our targeted disposals programme will enable us to reduce complexity and increase our focus as we return Babcock to strength.”
07:17 AM
Oil slips
Brent has declined 0.5pc to $70.96 this morning, as the fast-spreading delta virus variant continued to cloud the demand outlook.
The latest Covid-19 wave is leading to tighter curbs on movement across the globe, although there are mixed assessments on its impact. The International Energy Agency reduced its demand forecasts for the rest of the year, while Goldman Sachs Group predicts only a transient hit to consumption.
Delta has interrupted oil’s rally after a rapid rebound from the pandemic in big economies such as the US helped drive prices more than 50pc higher over the first half of the year.
The biggest concern is the flare-up in China, where authorities have taken an aggressive approach to containing the outbreak despite having one of the world’s highest vaccination rates.
“The oil market will likely continue to maintain a nervous watch, especially for a deterioration in China and the US,” said Vandana Hari, founder of energy consultant Vanda Insights. “Yesterday’s IEA report validated fears over a slowdown in second-half demand due to the delta wave.”
07:05 AM
FTSE rises on opening
The FTSE 100 has lifted 0.2pc on opening to 7,210 points.
The FTSE 250 has also edged 0.2pc higher, to 23,791.46 points.
07:01 AM
Disney results beat expectations
Disney beat expectations with its third-quarter results, with its theme parks turning a profit for the first time since March of last year and its Disney+ streaming service growing to 116m subscribers.
Revenue rose to $17.02bn, exceeding the $16.76bn analysts expected. Disney’s theme parks also beat expectations with operating income of $356m.
Chief executive Bob Chapek said theme-park reservations are running ahead of the just-ended period, despite the delta variant of Covid-19. Disney expects to be fully staffed at its resorts by the end of the year, after tens of thousands of layoffs in 2020.
The company’s direct-to-consumer unit – the home of its streaming business – narrowed its loss in the quarter, due to improved results at the Hulu online service. It said, movies released online, such as “Cruella” and “Luca,” as well as new TV shows from the Marvel superhero factory, drove customers to Disney+.
However the company is still catching up with pre-pandemic performance. Fiscal third-quarter sales, while up 45pc to $17bn, remain more than $3bn below their 2019 peak.
06:47 AM
More on China’s port closure
A Covid outbreak that has partially shut one of the world’s busiest container ports is sparking concern that the rapid spread of the delta variant will lead to a repeat of last year’s shipping nightmares.
The shutdown at Ningbo-Zhoushan in eastern China is raising fears that ports around the world will soon face the same kind of outbreaks and Covid restrictions that slowed the flows of everything from perishable food to electronics last year as the pandemic took hold.
Ningbo-Zhoushan Port said in a statement late Thursday that all other terminals aside from Meishan have been operating normally.
However the port’s decision to close the terminal on Meishan island until further notice will cut the capacity for cargo at China’s third busiest cargo port by about a quarter.
It seemed as if things were just starting to calm down, “and we’re now into delta delays,” Emmanouil Xidias, partner at Ifchor North America LLC, told Bloomberg. “You’re going to have a secondary hit.”
Ningbo city is still considered a low risk virus area, according to the city’s health commission, although flights to and from the capital Beijing have been cancelled.
06:13 AM
FTSE to fall after delta surge closes Chinese ports
Good morning.
The FTSE is set to extend losses this morning after a 0.4pc drop yesterday, as Asian stocks declined overnight following the partial closure of two of the world’s busiest ports in China.
Markets fear a repeat of last year’s strangled supply chains following the move to shut down parts of Ningbo-Zhoushan port in a bid to contain the rapidly spreading delta variant. The infections risk reaching docks even as shipping rates surge amid huge demand to transport goods as economies reopen.
Jeffrey Halley, senior market analyst at Oanda, said: “The partial closure of two of the busiest ports in the world in China, Shanghai and Ningbo, is likely to be another blow to supply chain disruptions. Those ripples won’t just be felt in China but also globally. The impact has been most noticeable in regional stock markets with a high beta to trade and China.”
5 things to start your day
1) Sturgeon calls for crackdown on North Sea oil and gas: Scottish First Minister tells Boris Johnson that ‘we all have a moral obligation to act’ on fossil fuels to combat climate change.
2) Inhaler maker backs takeover by tobacco titan behind Marlboro: Philip Morris says taking over Vectura, the FTSE 250 lung drug company, will allow it to go ‘beyond nicotine’.
3) Disney boosted by jump in subscribers to streaming service: Paying users of its internet TV service Disney Plus rose by more than 12m in the third quarter, to a total 116m, ahead of estimates
4) World’s largest offshore wind developer warns on low speeds: Orsted expects annual profits to be towards the lower end of its predicted range due to very low wind speeds in June and July.
5) Inside the £7bn dogfight for Meggitt: FTSE 250 firm already backed an 800p a share offer from one American rival when another swooped in with a potential 900p offer this week.
What happened overnight
Most Asian equity markets continued to ignore record highs hit elsewhere in the world and fell in early trading on Friday, though Australia bucked the trend.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.59pc, having closed lower on each of the past three days.
Traders have been pointing to continued worries about the potential for new regulatory crackdowns in China and the fallout from the surging delta variant in several countries in the region.
Japan’s Nikkei dropped 0.6pc.
Korea’s Kopsi dropped 1.45pc with Samsung Electronics falling to a seven-month low on concerns that memory chip prices may start to slip around the fourth quarter.
Hong Kong fell 0.45pc and Chinese blue chips fell 0.21pc.
Australia’s ASX200 rose 0.53pc to a new record high, lifted by healthcare and technology companies.
Overnight, MSCI’s gauge of stocks across the globe hit a new record high, and the Dow Jones Industrial Average and S&P 500 also closed at record highs for the third consecutive day. Big technology stocks drove the market higher as investors warmed to jobs data showing a steady US economic recovery.
Coming up today
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Economics: Trade balance (EU), import, export price index (US), retail sales, industrial production (China)
