Burford boosted by bid to clear muddy waters
FOR a small and, until recently, relatively unassuming company, it’s fair to say Burford Capital has had a busy summer.
AIM-listed Burford specialises in funding lawsuits, and had been the second-best performing stock in troubled fund manager Neil Woodford’s portfolio until an attack from US hedge fund Muddy Waters in August sheared almost twothirds off its market value.
Added to its links to the Woodford blow-up and Muddy Waters fallout, it is now embroiled in a sex-tape scandal to boot.
In what will be interpreted by the City as some much-needed firefighting, Burford released a 45-page briefing for investors on its website that seeks to answer some of the questions it has been facing.
The briefing showed that Burford is good – and perhaps even conservative – at estimating how much profit it expects to bring in from each case. On the downside, investors are still in the dark about what proportion of profits a huge case in Argentina accounts for. The move towards greater transparency and accountability was welcomed by investors, with shares rising 7.5pc, or 60.5p, to 871p. Pharmaceuticals giant Astrazeneca lifted slightly, by 0.04pc, or 3p, to 7170p, after it said its type 2 diabetes drug Qtrilmet is a step closer to getting approval from EU regulators.
The FTSE 100 was dented by economic data from the eurozone, which showed a deepening in the manufacturing downturn and uncertainty about trade tensions between the US and China.
The blue-chip index shed 0.3pc, or 18.84 points, to close at 7326.08, while the mid-cap
FTSE 250 closed down 0.6pc, or 125.61 points, to 20043.79. High Street pub favourite
Wetherspoons was unmoved by an increase to its target price from 1400p to 1750p from Berenberg brokers, who say it could be in line to benefit from higher earnings from fruit machines.
Regulations that have cut down the amount punters can stake on fixed-odds betting terminals (FOBTs) has hammered gambling companies but, analysts say, with their low labour costs, could be a boon to pubs. Wetherspoons rose 0.5pc, or 8p, to 1541p.
Petra Diamonds edged up after unearthing a 20.08-carat rare blue diamond from its Cullinan mine in South Africa, the source of two of the largest diamonds in the Crown Jewels.
And Berenberg analysts upgraded Petra’s stock from ‘sell’ to ‘hold’, arguing its shares fell after full-year results last week because of worries about the global diamond industry rather than Petra’s performance, per se. Petra closed up 1.7pc, or 0.14p, at 8.29p.
Smiths Group dropped a further 4.8pc, or 79p, to 1559p, after reporting on Friday that profits had slid in its catheter-making medical division, which it is planning to demerge and spin off as a separate company. Building materials group Low &
Bonar almost doubled its value as traders celebrated a 15.5p per share cash offer from Germany’s Freudenberg. Low & Bonar announced the £107m takeover after the market closed on Friday, which is usually a time companies sneak out bad news. Shares jumped 99.4pc, or 7.08p, to 14.2p.
Northgate revved up 5.8pc, or 17.5p, to 320p after new chairman Avril Palmer-Baunack kicked off a strategic review of the van and lorry hire group’s growth options.
Escape Hunt, which organises games in which teams are ‘locked’ in a room and must solve puzzles to get out, rose 4pc, or 2p, to 52.5p, after it inked a deal with franchise partner Proprietors Capital Holdings to roll out across the US.