Warehouses in demand as web shopping booms
THE online shopping boom has boosted warehouse owner Segro.
The company, which provides warehouses to Amazon, stormed to the top of the FTSE 100 leader board yesterday after delivering a strong set of results.
A shortage of available warehouses saw it benefit from demand for its space, sending profits soaring 26pc last year.
A huge shift away from the High Street toward online shopping has boosted the need for warehouses as retailers look for distribution space to cash in on demand.
But a lack of available warehouses is pitting retailers against each other to fight for space.
According to investment firm AJ Bell, the vacancy rate for warehouses is running at 4pc which is below a 5pc to 7pc target.
Segro, which invests in warehouses near major transport hubs, said it was positive about the prospects for rental growth, particularly in the UK market.
In addition to Amazon, Segro’s clients include delivery firm DHL and Swedish flatpack furniture maker Ikea. Shares ended the day at 591.2p, up 6.5pc, or 36p.
Segro’s results had positive implications for smaller rivals
London Metric P roperty and Tritax Big Box which also made gains. London Metric ended the day 2.5pc higher, or 4.3p, at 177p, while Tritax edged up 1.8pc, or 2.5p, to 143p. Investors in veterinary group
CVS suffered a blow as shares dived 8.2pc, or 100p, to 1120p. The company’s bottom line has been hit by a number of acquisitions, causing profits to drop 21.3pc to £6.2m, despite rising sales.
CVS, which was once an AIM superstar, saw its share price soar by 563pc in its first ten years as a listed company. But after a slowdown in sales and shortage of vets in the UK around three months ago, almost a third of its market value was wiped off in a week.
The company revealed plans to raise £67m yesterday by issuing up to 6.4m shares at 1050p each – an almost 14pc discount to its share price at the time.
Russ Mould, investment director at AJ Bell, said: ‘Investors may be surprised at the scale of this discount given how previous fundraisings were carried out.
‘For example, CVS raised £30.2m in December 2016 by issuing new shares at a mere 3.85pc discount. In February 2010 it raised £12.2m by issuing new shares at a 2.8pc price discount.’
Better news for healthcare company Advanced Oncotherapy which provides radiotherapy services for cancer treatment using proton technology.
The company’s shares edged up 5.7pc, or 3p, to 56p, after Chinese authorities approved a distribution deal with Yantai CIPU, which will sell its light proton therapy system in the region. Investors in fishing tackle retailer Angling
Direct landed a healthy share price rise of 7.7pc, or 7.5p, to 104.5p as the AIM-listed company reported a 44pc leap in sales for the 12 months to January 31. Sales topped £30m as the firm continued to invest in its online business, racking up several months of over 1m visits to its website.
Georgian bank BGEO Group reported a record annual profit after boosting the size of its loan book. The Tbilisi-based bank said profits increased 8.1pc to £135.16m, while revenues jumped 24pc. Despite the positive update, shares fell 2.2pc, or 74p, to 3326p.
Towards the bottom of the pile on the FTSE 350 was power generator provider Aggreko, which fell following a downgrade from Bank of America Merrill Lynch. Shares ended the day 3.6pc, or 28.4p lower, at 759p.
The FTSE 100 enjoyed a bounce back to soothe investor jitters following a run of volatility last week. The index rose 0.83pc or 59.89 points to end the day at 7294.70.