MARKET REPORT: Shares in Deliveroo and Just Eat Takeaway notable fallers as JP Morgan downgrades both stocks
Shares in Deliveroo and Just Eat Takeaway were notable fallers after JP Morgan downgraded both stocks.
The bank highlighted the cost-of-living crisis, which will probably hit consumers’ pockets and lead to fewer takeaways being ordered as people spend more on energy bills instead.
Both stocks performed strongly during the pandemic as consumers ordered food to their doors.
Writing on the wall: Both stocks performed strongly during the pandemic as consumers ordered food to their doors
It was part of a wider note in which JP Morgan assessed the outlook for Europe’s leading internet stocks, warning that they face an uncertain future as economic dark clouds gather.
Deliveroo was down by 1.4 per cent, or 1.24p, to 85.92p and Just Eat by 0.8 per cent, or 14.2p, to 1706p.
Yesterday was a day of muted advances for the FTSE 100, though the 2.5 per cent gain this week will be its best in 10 weeks.
The blue-chip index added 20.54 points to trade at 7585.46. The FTSE 250 ended the day at 20,372.52, up 123.78 points. The big riser – up 6.6 per cent, or 49p, at 794.8p – was Scottish Mortgage Investment Trust.
One of Britain’s biggest investors in Silicon Valley, it was dragged higher by Thursday’s revival of interest in US tech stocks and a positive set of results for China’s Alibaba, one of its top10 holdings. Last week the trust had warned it had become too invested in China.
But Harbour Energy’s hopes of for a hassle-free, cash-rich summer have been spoiled by the Chancellor’s windfall tax.
It is the North Sea’s largest independent oil producer but more of the cash it is generating will be going into Rishi Sunak’s coffers rather than paying off debts, which currently stand at £1.35billion. It fell 10.8 per cent, or 46.1p, to 382.1p.
Following the alert on Thursday from AJ Bell that the worsening cost of living was dampening retail investor enthusiasm for shares, it was not surprising that asset manager Premier Miton reported a half-year net outflow of £401m.
However, shares jumped 8.9 per cent, or 10p, to 123p, even as boss Mike O’Shea cautioned that the outlook for investment markets ‘remains uncertain and, in my view, this is likely to remain the position for some months’.
Investors had been expecting worse, it seemed, with the shares having dropped 36 per cent since the start of the year, but results showed revenue up 13.5 per cent to £43.7m and adjusted profit before tax jumping 26.7 per cent to £14.6m.
Down among the minnows, a big beast was found fishing.
Brandshield Systems jumped 17 per cent, or 1.4p to 9.65p after Sir Terry Leahy revealed a 6.96 per cent stake. The former Tesco boss, who is chairman of Morrisons among his corporate interests, bought shares in the cybersecurity company’s £1m fundraising this week.
Chief executive Yoav Keren said the money means it can capitalise on ‘a significant market opportunity’. Last month it won a contact with a pharma firm to identify and eradicate online threats, including fake pharmacies.
Savannah Energy was up 5.8 per cent, or 2.1p, to 38.1p after it struck a deal with Chad to develop up to 500 megawatts of solar and wind energy projects to supply electricity to the capital, N’Djamena, and other locations. A solar farm at Kome, in the south, would be the largest between the Sahara desert and South Africa.
Back in England, car dealer Caffyns vroomed up 9.6 per cent, or 52.5p, to 602.5p after reporting better profits and a ‘strong’ order book for new cars.
The Sussex and Kent group, which runs showrooms for Audi, Vauxhall, Lotus and others, reported a threefold increase in profits to £4.4m.
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