Insurer shares hit record after GoCompare spin-off MARKET REPORT
SHARES in Esure surged to a record high as traders cheered a bumper year for the business.
Profits at the insurer jumped 12pc to £72.7m, with earned premiums up £59.3m to £554.9m, and it increased its dividend by 2p to 13.5p per share.
Investors’ pulses were sent racing by Esure’s ability to ride out controversial changes to compensation payouts, which will increase payments for victims of serious accidents.
However, the industry will have to stump up the cash for it.
Rivals have said this will cost hundreds of millions of pounds, but Esure said its bill for the furore would be just £1m.
Chief executive Stuart Vann boasted the company was in ‘full growth mode’ and traders agreed, sending shares soaring 7.9pc, or 17.5p, to 240p. It was a new high for the firm after the demerger with price-comparison arm
GoCompare in November. The FTSE 100 index climbed 0.4pc, or 28.1 points, to 7,343.1. It was helped by a later surge from BP, which gained on speculation that the oil giant might be in line for a huge deal.
City sources claimed yesterday afternoon that ExxonMobil could be sounding out shareholders ahead of a possible takeover.
Gossips were suggesting a price of more than 600p a share or nearly £120bn, making it the sector’s biggest-ever tie-up.
It was claimed that Shell would also throw its hat in the ring if Exxon made a move.
All firms involved dismissed the suggestions as speculation and stressed that similar rumours had been circulating for years. But this did nothing to deter speculators on a fairly quiet day for the market, and shares closed up 3.7pc, or 16.7p, to 470.7p. The news for oil minnow Angus
Energy was less good. It was forced to respond to media claims that drilling at a controversial well in Brockham, Surrey, was unauthorised.
In a statement it said it believed that drilling ‘did not constitute a breach of the planning consents’.
‘Discussions with Surrey County Council are ongoing and the company will update the market as soon as these are complete,’ the business said. Shares dived 6.6pc, or 0.7p, to 10.6p.
At the bottom end of the FTSE, real estate investors were out of fashion due to a rise in gilt yields.
The improvement in government bonds gives savers an alternative place to park their cash, rather than sticking it in more risky property investments where assets can be slow to sell.
A survey from accountancy firm BDO also cast a pall over the sector. It found that high streets had their worst February since 2009 as price rises started to bite. Shopping centre developer Hammerson was down 1.4pc, or 8.5p, to 581p, and British Land – which focuses on retail, leisure assets, offices and homes – dropped 1.5pc, or 9.5p, to 612.5p.
Intu Properties was the hardest hit as traders fretted over its £465m acquisition of the Xanadu shopping centre in Madrid, Spain. Liberum Capital reaffirmed its sell rating on the stock, giving it a target price of 240p. Shares dropped 1.7pc, or 4.7p, to 277.5p.
Cider maker C&C Group lost its fizz after revealing profits for the year to February 28 could be 9pc lower. The firm behind Bulmers and Magners said the fall in the pound was a big factor. It expects profits of £82.5m to £84.2m. Shares fell 2.1pc, or 0.1p, to 3.8p. Meanwhile, drugs firm Hikma
Pharmaceuticals introduced an antidepressant in the US, boosting shares by 1.1pc, or 24p, to 2139p.