MARKET REPORT: Ascential shares soar 23% to a five-month high as events giant lays out breakout plans
Shares in Ascential hit a six-month high as the events giant outlined its proposals to break up the business.
The FTSE 250 company behind the Cannes Lions advertising festival soared 26%, or 54p, to 262p – a level not seen since July last year – after saying it would seek shareholder approval to launch its digital operations in the US, sell a brand and keep the rest of the business listed in London.
Ascential first announced its intention to separate in April to create more shareholder value.
Breakup plan: Ascential, the company behind the Cannes Lions advertising festival, will seek shareholder approval to launch its digital business in the United States and sell one of its brands
The case for splitting up its business was bolstered by “double-digit revenue growth” last year.
In a positive end to its fiscal year, Ascential said revenue and profit for 2022 would have likely exceeded market expectations.
Under the proposals, Ascential’s US-focused digital commerce arm would float in New York, while the events business, which includes the Cannes Lions and Money 20/20 conferences, would remain within the company listed in London.
And he wants to sell his trend forecasting company WGSN.
Peel Hunt analysts said: “We have long emphasized that the underlying assets are worth more than the combined group and therefore management is now taking steps to maximize value.”
The FTSE 100 fell 0.16%, or 12.49 points, to 7744.87 and the FTSE 250 fell 0.26%, or 51.27 points, to 19804.04.
Insurance giant Aviva was among the blue-chip winners, even though it warned that December’s cold snap would cost £50million in claims from customers affected by burst water pipes and more. Despite the cost, Aviva said it would still pay a dividend.
This was in stark contrast to rival Direct Line, whose shares fell 23% in a single day this month after scrapping its dividend, saying the cold snap would cost £90m.
Aviva rose 3.3%, or 14.4p, to 455.7p while Direct Line was down a further 1.9%, or 3.4p, to 172.5p.
Experian fell after Credit Suisse downgraded its “outperform” rating to “neutral” and cut the target price to 2900p from 3250p.
Mexican miner Fresnillo has warned that its production costs are likely to have increased by around 20% in the second half of 2022.
Silver production also fell 3% in the last three months of 2022, while gold production increased over the period.
This led Fresnillo to raise its gold production forecast for this year. Its shares fell 2.1%, or 18.4p, to 860.2p.
Trading platform CMC Markets reassured investors that business was improving after last year’s turmoil. Revenues fell towards the end of 2022, but have since “recovered strongly”.
The stock fell 3.7%, or 9p, to 234.5p.
Meanwhile, Keywords Studios raised its full-year forecast due to growing demand for increasingly complex video games.
The developer now expects its revenue for 2022 to be around £608m, down from a previous forecast of at least £595m. The shares gained 6.5%, or 168p, to 2,774p.
At Pendragon, the car dealership warned there would still be “constraints” with the supply of new and used vehicles this year.
This happened even though its new car sales were up 4% in the final three months of 2022 from a year earlier.
And used car sales rose 5.2%.
Pendragon said its profit for 2022 is expected to be around £57m – up on the £54m analysts expected, but still a long way off the £83m it made 12 months earlier.
The shares edged down 0.8%, or 0.15p, to 19.45p.
