MARKET REPORT: Shares in Hastings are skyrocketing after auto insurer turns out to be an acquisition target
Shares in Hastings surged after the auto insurer became an acquisition target.
Finnish Sampo and South African Rand Merchant Investment (RMI) – Hastings’ largest investor – are in talks to make a cash offer for the group.
Sampo likes the technically savvy activities and wants to expand into the non-life insurance market. Geographically, it would also like to go beyond its Scandinavian base.
RMI has owned just under 30 percent of Hastings since 2017 and has a representative, Herman Bosman, on the board of the FTSE 250 group. Hastings has now set up an independent committee that excludes Bosman from thinking about the approach.
Sampo and RMI have until August 26 to decide whether to continue – or run away.
Before the pandemic, Hastings warned of a profit and cut the dividend due to the consequences of rising repair costs and a number of claims from people who were seriously injured in accidents. This is partly due to changes in how the damage is calculated by the government, also known as the Ogden rate.
Investors in Hastings, who were worth £ 1.1 billion before the talks were revealed, yanked the pedal last night and steered their shares 18 percent higher, up 30.6 percent, to 200.6 pence.
Hastings wasn’t the only keen riser. Funeral director Dignity rose by more than a third after profit increases. The horrific toll from the pandemic caused death rates to rise by 23 percent between January and June. Unfortunately, this of course meant that more funerals had to be held. Revenue was up about 9 percent to £ 169 million, although higher costs resulted in a loss of £ 13.6 million.
Average income per funeral dropped by £ 458 to £ 2,461 as people were forced to opt for smaller and simpler services.
Shares ended 35.5 percent higher, up from 86.5 p to 330 p.
Home builder Taylor Wimpey, on the other hand, slumped to the bottom of the FTSE 100 rankings after losing a £ 40 million loss in the first half of the year and predicted the number of homes to be completed with it by 40 percent decrease year.
The company and its rivals made solid gains on Tuesday, following reports that ministers are planning to extend the Help to Buy scheme to boost the vulnerable housing market.
But the mood soured yesterday: Taylor Wimpey fell 8.1 percent, or 10.75 points, to 122.2 p, and equals like Persimmon – 2.3 percent, or 57 p, to 2479 p – and Bovis Homes owner Vistry , which is 4.4 per cent, or 29.5 p, to 638.5 p, which falls into the red.
London’s two major indexes were significantly flatter: the FTSE 100 finished 0.04 percent higher, up 2.2 points to 6131.46, while the FTSE 250 lost 0.2 percent or 30.57 points to 17,247, 66.
Pandemic delays in elective surgery such as hip and knee replacements caused a loss of £ 26 million for Smith & Nephew and double sales growth in April, May and June.
Shares fell 0.6 percent, or 10.5 percentage points, to 1,619.5 percentage points, while investors may have been reassured by their commitment to pay out an interim dividend.
Elsewhere, Oxo, Loyd Grossman sauces and Bisto gravy maker Premier Foods have served up a robust set of numbers.
Shares were up 4.7 percent, or 4p, to 90p, after first quarter sales were up 23 percent in the UK when the country was at the peak of its lockdown. Total sales increased by 22.5 percent.
However, Mr. Kipling’s cake maker sold fewer cakes and saw only a small increase in the total sales of sweet treats during those months. Still, it said it outperformed the market in each category.