UK Defense Companies Shares Rise on German Pledge to Increase Defense Spending

Shares in U.K. defense companies Chemring and QinetiQ rose on Monday after Germany's Chancellor Olaf Scholz announced on Sunday a commitment to increase the country's defense spending to 2% of GDP, as well as a EUR100 billion one-off investment fund to be included in 2022's armed-forces budget following Russia's invasion of Ukraine. The Chancellor highlighted the need for a modern armed forces and reiterated the case for European cooperation in development programs such as the Future Combat Air System aircraft, of which QinetiQ is a part. He also noted the MGCS tank program--in which Chemring participates--as well as the Eurodrone development program. QinetiQ shares were up 12% at 293.40 pence, with Chemring Group shares up 13% at 309 pence. 


 
Companies News:

AB Foods Expects Higher 1H Revenue, Adusted Operating Profit

Associated British Foods PLC said Monday that revenue and adjusted operating profit for the first half of fiscal 2022 are expected to be significantly higher than a year earlier.

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Centralnic Buys German Online Marketing Company for Initial EUR67M, Funded via Equity Issue

Centralnic Group PLC said Monday that it is buying German online marketing business VGL Verlagsgesellschaft mbH for an initial sum of 67 million Euros ($75.5 million), which will be part funded via a share placing and open offer.

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Safestyle UK Sees January Cyberattack Hitting 1H Revenue by 10%

Safestyle UK PLC said Monday that a cyberattack upon it on Jan. 25 has caused around a 10% hit to its first-half revenue, and that it has been advised that the attack came from Russia.

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OnTheMarket Sees FY 2022 Adjusted Operating Profit in Line After Implementation of Partnerships

OnTheMarket PLC said Monday that it expects to report adjusted operating profit in line with raised expectations, after the successful implementation of a number of commercial partnerships.

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OptiBiotix 2021 Sales, Gross Profit Rose as It Expanded to New Regions

OptiBiotix Health PLC said Monday that sales and gross profit in 2021 significantly rose, with both its prebiotic and probiotic divisions showing growth.

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Senior Swung to 2021 Pretax Profit, Sees Return to Growth in 2022

Senior PLC reported on Monday a swing to pretax profit for 2021, in line with he board's expectations, backed by markets' recovery from the pandemic and said that it sees a return to growth in 2022.

GlaxoSmithKline to Spin Off Haleon Consumer Business in July; Targets 4%-6% Sales Growth

GlaxoSmithKline PLC said Monday that it plans to demerge and list its consumer healthcare business--recently named Haleon--in July 2022, and set targets for the company, including 4%-to-6% sales growth in the medium term.

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NIO, Novavax, Lockheed, Yandex, First Horizon: What to Watch When the Stock Market Opens Today -- WSJ

Stock futures fell, oil prices jumped and Russian authorities scrambled to keep a grip on domestic markets, as investors rushed to adjust to geopolitical developments including new sanctions against Russia. Here's what we're watching in Monday's trading: 


 
Market Talk:

Russia-Ukraine Crisis Tipped to Boost Defense Stocks

1307 GMT - The Russia-Ukraine crisis and its impact on European defense is likely to boost shares in the sector, J.P. Morgan says, upgrading two stocks. European defense spending will be higher than previously expected, JPM says, pointing to Germany's announcements about sending weapons to Ukraine and increasing military spending. It may also improve the sector's environmental, social and governance credentials, with more investors potentially accepting that defense is needed to preserve peace and democracy, JPM says. The U.S. bank increases its sector price targets by an average of 25% to reflect a high probability of meaningful earnings upgrades and higher target multiples. "We upgrade Hensoldt to over-weight from neutral. We upgrade Qinetiq to neutral from under-weight," JPM says.

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Increasing Exposure to ESG Value Might Help Investors Weather Future Volatility

1301 GMT - Investors concerned about future volatility with growth companies in their ESG portfolios might consider adding stocks that are undervalued in price, Jon Hale, Morningstar's global head of sustainability research, says. "It's true that growth stocks tend to have better ESG credentials than value stocks, but ESG value funds can help companies improve their sustainability profile through active ownership," Hale says. ESG value funds have less exposure to traditional energy and utilities than value funds, and are overweight in financial services, industrials, and consumer staples, he says. Some funds in Morningstar's value category include Calvert U.S. Large-Cap Value Responsible Index, Nuveen ESG Large-Cap Value ETF and the actively-managed Parnassus Endeavor, he says.

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abrdn Supports BP's Decision to Exit Rosneft

1227 GMT - Abrdn is strongly supportive of BP's decision to exit its 19.75% shareholding in Russian oil company Rosneft and applauds its board for taking swift action following the events of the last week, Andrew Millington, head of U.K. equities at the investment company, says. "While there may be a significant financial cost to BP in exiting Rosneft, it is unquestionably the right thing to do," he says. Abrdn owns a 1.70% stake in BP. Shares in the U.K. oil major fall 6.2% after announcing that it will sell its assets in Russia.

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UK Household Inflation Expectations Reach Record Highs

1203 GMT - Household inflation expectations for the next five-to-ten years increased to 4.1% in February, matching the previous survey record from June 2011 and 0.9 percentage point above their long-run average, Citi says. "For now, these data suggest upside risks to inflation expectations are growing," the U.S. bank says. Expectations for the next 12 months also increased to a new record of 5.6%, 3.1% above their long-term average, it adds. In recent months, an improving cyclical outlook, tightness in consumer goods markets and increases in energy prices have all driven near-term expectations higher, the bank says.

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Bunzl Gains After Upbeat FY Results

1153 GMT - Shares in Bunzl rise 4% after the distribution group said its 2021 pretax profit rose but missed market expectations, while revenue growth on the recovery of its main business and acquisitions more than offset a pandemic-related sales hit. The results were positive, with 2H group margins about 40 basis points ahead, a small upgrade to margins in FY22 and revenue growth so far more than offsetting cost inflation, Barclays says. "Seeing as the impact of cost inflation on margins was a key focus of investors heading into results, we'd expect the release to be taken positively," the U.K. bank says, reiterating its equal-weight rating.

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Bunzl's Growth Could Be Heavily Dependent on Acquisitions

1141 GMT - Bunzl's 2021 performance was broadly in line with expectations, but medium-term concerns over growth remain, Davy Research says. Inflation was the main driver of the group's recent share price rise, but this is expected to abate in the second half of 2022 and into 2023, the Irish research firm says. While Bunzl's historic organic revenue growth is around 2%, the distribution-and-outsourcing group is now heavily reliant on acquisitions, expecting only moderate revenue growth in 2022 against acquisitions of GBP508 million in 2021, Davy says. Despite this, margins should return to just above pre-pandemic levels this year, it says. Davy has a underperform rating on the stock.

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RHI Magnesita Is Expected to Continue Gaining Market Share

1119 GMT - RHI Magnesita's 1H results show solid growth and it is on track to realize its potential, Peel Hunt says. The FTSE 250 refractory-products supplier's position as the market and technology leader creates a platform for continuing to gain market share and add value as its customers seek more sustainable solutions--a common goal in the current steel mill reporting season, Peel Hunt says. "The higher-than-expected leverage might catch the eye in the short term, but the macro industry drivers the company highlighted, coupled with the ongoing cost reduction programs and greater penetration in markets such as China and India reinforce our confidence and continued buy," the brokerage says, retaining its 5,000 pence price target.

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Safestyle UK Offers Plenty of Upside to Investors

1111 GMT - Safestyle UK's assault from a cyberattack in January is expected to hit first-half revenue by around 10%, but there is significant upside to the company's share price, Liberum says. The U.K. manufacturer of doors and windows says the attack has only created operational problems and it has expressed confidence for the rest of the year, and is due for a recovery in volumes after several years of market disruption, the brokerage says. "We see almost 60% total shareholder return upside to our revised target price of 75 pence, [down] from 80 pence," Liberum says, maintaining its buy rating on Safestyle's stock. Shares are down 7.4% at 44.0 pence.


Contact: London NewsPlus, Dow Jones Newswires; Write to Sarka Halas at sarka.halas@wsj.com

(END) Dow Jones Newswires

02-28-22 0842ET