Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
There’s a solid message out from Tesco [LON:TSCO] this morning that ought to cheer any investor with a conscience. The company has elected to return the £585m worth of business rate relief it received from the government, a move which acknowledges the significant upside seen by the retailer both through its home deliveries and ability to see non-essential items in store through the lockdown periods (at least in their major England market). Whilst the company notes it has spent over £700m responding to the pandemic, even with this rebate the guidance for operating profits for the year before exceptional items will be at least as high as was seen in 2019/20. Other supermarkets will now presumably be under pressure to follow.
In a last ditch attempt, Garda World has upped its offer for G4S [LON:GFS] from 190p per share to 235p. Since we mentioned this story at the start of the week, investors have remained reluctant to sell out, instead seeming happy to buy into the management’s defence. Whether the lure of more cash will be sufficient to move the needle here remains to be seen, although with the support of less than 2% of shareholders, there’s still a long way to go in the next two weeks.
On the day the England-wide lockdown ends, it seems worth picking up on results for the first 24 weeks of the year, published by bar and café operators Loungers [LON:LGRS]. Given this period includes 11 weeks of lockdown, revenues fell from £80m a year earlier to £54m which is perhaps better than would be expected. The company turned a pre-tax profit during this time, reversing a loss from 2019 and the company has strong hopes over the future. Non-property debt is being paid down and they anticipate opening 25 sites in the 2021/22 financial year. Shares were already closing in on pre-COVID highs – will this news offer a further push in that direction?
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