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MARKET REPORT: Ascential shares rise 23% to hit five-month high as events giant outlines breakup plans
Shares in Ascential hit a six-month high as the events giant laid out its proposals to break up the company.
The FTSE 250 company behind the Cannes Lions advertising festival rose 26 percent, or 54 pence, to 262 pence – a level not seen since July last year – after it said it will seek shareholder approval for its launch digital business in the US, sell a brand and keep the rest of the company listed in London.
Ascential first made plans to separate in April, as a way to create more value for shareholders.
Break-up plan: Ascential, the company behind the Cannes Lions advertising festival, will seek shareholder approval to launch its digital business in the US and sell one of its brands
The arguments for splitting the activities were strengthened last year by ‘double-digit sales growth’.
In a positive fiscal year end, Ascential said revenue and earnings for 2022 are likely to have beaten market expectations.
As part of the proposals, Ascential’s US-focused digital commerce arm would float in New York, while its events arm, which includes Cannes Lions and Money 20/20 conferences, would remain within the London-listed company.
And it wants to sell its trend forecasting agency WGSN.
Analysts from Peel Hunt said: “We have long emphasized that the underlying assets are worth more than the combined group and so management is now taking steps to maximize value.”
The FTSE 100 was down 0.16 percent, or 12.49 points, to 7744.87 and the FTSE 250 was down 0.26 percent, or 51.27 points, to 19804.04.
Insurance giant Aviva was among the blue-chip winners, even as it warned that the December cold snap will cost £50m in claims from customers affected by burst water pipes and the like. Despite the costs, Aviva said it would still pay a dividend.
This was in stark contrast to rival Direct Line, whose shares fell 23 per cent in one day this month after it cut its dividend, saying the cold snap would cost it £90m.
Aviva rose 3.3 percent, or 14.4p, to 455.7p, while Direct Line fell another 1.9 percent, or 3.4p, to 172.5p.
Experian fell after Credit Suisse downgraded its rating from “outperform” to “neutral” and lowered its price target from 3,250 pence to 2,900 pence.
Mexican miner Fresnillo warned that production costs are likely to increase by about 20 percent in the second half of 2022.
Silver production also fell 3 percent in the last three months of 2022, while gold production increased over that period.
This prompted Fresnillo to raise its gold production forecast for this year. Shares fell 2.1 percent, or 18.4 pence, to 860.2 pence.
Trading platform CMC Markets assured investors that things were improving after last year’s turmoil. Income slumped at the end of 2022, but has since “rebounded strongly.”
The stock fell 3.7 percent, or 9 pence, to 234.5 pence.
Meanwhile, Keywords Studios has raised its full-year forecasts due to rising demand for increasingly complex video games.
The developer now expects revenue for 2022 to be around £608m – up from a previous expectation of at least £595m. The shares gained 6.5 percent, or 168p, to 2774p.
At Pendragon, the car dealer warned that there would still be some “restrictions” with the delivery of new and used vehicles this year.
This despite the fact that sales of new cars in the last three months of 2022 were 4 percent higher than a year earlier.
And used car sales rose by 5.2 percent.
Pendragon said earnings for 2022 should be around £57m – more than the £54m analysts had expected, but still well below the £83m mark 12 months earlier.
Shares fell 0.8 percent, or 0.15 pence, to 19.45 pence.