Three things you need to know as the UK financial markets open, from Tony Cross.
#1. Direct Line on course to fold into Aviva
There’s a joint statement out from Aviva LON:AV. and Direct Line Group LON:DLG this morning following the recent merger talk. Aviva have upped their offer to 275p per share, a 73.3% premium to the closing price on 27th November, so before the deal was announced. Whilst Direct Line management believe the business has good prospects as a standalone business, at this price they are ready to yield to the bigger rival.
#2. Berkeley eyes prospects from new government housing plans
There’s a half year report out from Berkeley Group LON:BKG this morning, noting revenues up 7% and gross profits up by almost 9%, although return on equity stats are down. Management are cheered by the government’s position on new home building, specifically the focus on brownfield sites, something the business believes it can play a key role in.
The company also reiterates its commitment to returning capital to shareholders, although the rate in the coming years isn’t set to be quite as robust as has been seen of late.
#3. Low cash balance and poor sales raise questions at QUIZ
Fashion brand QUIZ LON:QUIZ issued a trading update this morning. Critically, sales in November came in lower than would have been expected, failing to reflect the momentum that had been building since the summer. That’s raising concerns over how performance will look in the run up to Christmas and management are flagging the limited cash reserves, noting that they anticipate additional funding will be necessary in Q1 ’25 unless a marked improvement in trading is seen, or a shareholder loan can be secured.
