£100m for Motorpoint’s second-hand car boss
MOTORPOINT had a strong debut on the London market, netting the founder of the used car dealer a multi-million-pound fortune.
Second-hand car salesman David Shelton set up Derby-based Motorpoint in 1998, and the 63-year-old is likely to enjoy the lion’s share of a £100m cash windfall after a company he controls, MP Group Holdings, sold 50m shares at a price of 200p a pop to public market investors.
Motorpoint’s shares jumped around 8pc or 17.5p to 217.5p on their first day of conditional dealing on the London Stock Exchange before closing at 216.5p. Elsewhere in the used car sector, Lookers was down 5.9pc, or 8.2p, to 131p, Pendragon ticked up 1.4pc, or 0.4p, to 35p, and BCA (British Car Auctions) dipped 1.1pc, or 1.75p, to 160.75p.
Motorpoint’s strong performance follows the flotation of Hotel Chocolat, flat at 207.5p. The high-end chocolate retailer saw its shares leap 28pc when it floated on the Alternative Investment Market last Tuesday, offering shares at 148p to institutional investors.
Dealers are hoping the revival of the moribund flotation market will continue as it is ominously quiet in the City ahead of the Brexit referendum next month. Indeed, trading volumes were thin on a choppy day that eventually saw the FTSE 100 close up 34.31 points at 6138.50.
Manoj Ladwa of broker TJM Partners said: ‘Trading activity dropped off a cliff today after yesterday’s rollercoaster ride. With ongoing concerns about Brexit, a continued poor performance from China and seasonal weakness, traders seem happy to stay out of the market as we head into the weekend.’
Tesco topped the leader board as traders picked up on its upbeat annual report. The supermarket giant’s shares climbed 3.9pc, or 6.05p, to 161.65p.
Some mining companies rallied following a sell-off last week driven by a bearish UBS note. BHP Billiton, for example, increased 1.9pc, or 15.5p, to 822.8p while silver and gold mining specialist Fresnillo moved 3.7pc, or 40p, higher to 1115p.
Second liner Vedanta Resources was also in vogue. The business released full-year results last week and paid a final dividend. Yesterday dealers chased the stock 6.8pc or 23.5p higher to 368.5p as analysts pointed out it had convinced Cairn India to roll over a £871m loan to THL Zinc, one of Vedanta Resources’ subsidiaries. Traders had a good laugh at CocaCola HBC’s expense after the company released a pretty dire trading update but for some reason entitled the regulatory announcement A Good Start To The Year.
Dealers weren’t impressed by a drop in first-quarter revenue, which was hit by a strong euro and weak emerging market currencies.
Analysts at Barclays had been expecting Coca-Cola HBC’s firstquarter revenues to have grown by 2.7pc, but in fact they fell by 2.7pc.
Coke bottler Coca-Cola HBC, which is also listed in Athens, slid 3.5pc, or 49p, to 1348p.
Satellite operator Inmarsat was sold off following a huge profit warning from rival French rival Eutelsat, which plunged 28pc. Inmarsat itself gave up 4.2pc, or 33.5p, to 760.5p.
Bearish broker comment weighed on ITV. Analysts at UBS have a ‘sell’ rating on the stock and lowered their price target to 195p from 230p following last week’s firstquarter results, which saw revenues miss expectations. Several other major stockbrokers also lowered their price targets, sending its shares down 2.4pc, or 5.1p, to 204.9p.
Among the smaller companies, oil services group Hunting took a pasting after Barclays cut its target price from 450p to 380p. The reduction came after Hunting said revenues had declined between 30pc and 40pc and that the full-year outlook was ‘uncertain’. Hunting fell 10.3pc, or 30.7p, to 267.5p.
Micro Focus fell 2.6pc, or 41p, to 1522p as Wizard, one of the company’s largest shareholders, said it planned to sell 24.1m shares, or 10.5pc of the company. Numis is running the placing for Wizard, which is a holding company for a consortium of US private equity and hedge funds, including Elliott Management.