Market report: Funding round sees Shaftesbury dive

Louis Ashworth
·2-min read
Shaftesbury Avenue
Shaftesbury Avenue

Shares in West End landlord Shaftesbury dived yesterday after it announced plans to raise £307m from shareholders to help it weather the pandemic.

The FTSE 250 group – which previously warned many of its tenants were struggling to meet obligations due to Covid-19 disruption – said it had launched the capital raising to ensure it “maintains a strong financial base”.

Shaftesbury’s board said it is “focused on eliminating short-term financing risk while Covid-19 disruption and uncertainty continues to materially affect the group’s operating performance”.

It will raise the money through a combination of a firm placing and an open offer, which will be at 400p per share. Its stock ended down 67.4p at 420p.

Fellow mid-cap Capital & Counties and lender Norges Bank, its two biggest shareholders, are backing the plan with £65m and £77m respectively. CapCo shares fell 10.7p to 103.2p.

Stifel’s John Cahill said Shaftesbury should have not problem raising the full amount targeted, but added “we think earnings downgrades are now likely for next year”.

The 14pc drop left Shaftesbury as the biggest FTSE 350 faller on yet another day of lukewarm trading that left the blue-chip almost totally flat.

Hargreaves Lansdown led risers on the FTSE 100 after broker Peel Hunt said the investment platform’s shares look “oversold”. 

Analyst Stuart Duncan said “there is still potential upside to revenues, and therefore profits, if trading volumes remain elevated, with little sign so far of a sustained slowing”. He pointed to potentially favourable trends in HL’s user base, including a rise in younger customers – who often have smaller portfolio sizes but may offer “higher lifetime values” than older users.

On the FTSE 250, Moneysupermarket shares slid 26.4p to 240.6p after reporting weakness in its home, money and insurance segments amid falling search interest. The group’s revenue for the three month to the end of September was £85.1m, down 16pc on the same period last year.

Travis Perkins rose 11p to £12.31 after the builders’ merchant and retailer reported like-for-like  revenue growth of 3.9pc across the third quarter.  It said strong demand for domestic DIY supplies had continued, but warned trade activity from “larger housebuilding and construction projects” was lagging other areas of its operations.

Among small-caps, Daily Mail and i paper owner DMGT rose 41p to 717p after saying its full-year profit is likely to beat market estimates. The publisher said adjusted operating profit would be in the range of £85m –£90m, following “stronger than expected” performance from its consumer media and property information businesses.  DMGT’s board said it “remains cautious” about the period ahead, however.