(Alliance News) - Darktrace climbed 40% at the start of conditional trading in London on Friday, giving it a GBP2.4 billion market capitalisation and entree into the top tier among listed companies.
The UK tech startup, founded in 2013, provides cybersecurity services to businesses using artificial intelligence.
Darktrace's initial public offering on the London Main Market was priced at 250 pence per share, giving a GBP1.7 billion market capitalisation, trimmed back from an earlier mooted valuation of GBP3 billion.
The scaled-back IPO priced seemed intended to avoid the disastrous recent debut of food delivery app Deliveroo, whose shares fell more than 30% on their first day.
If so, it succeeded. In early dealings Friday, the stock was quoted at 350p, up 40% on the IPO price.
"As an expert in assessing threats to other firms, it comes as little surprise that the target price was scaled back from expectations, to lower the risk of a disappointing debut following the Deliveroo listing debacle," commented Susannah Streeter, senior investment & markets analyst at Hargreaves Lansdown.
"The valuation reassessment came amid concerns investors might spy a possible reputational issue, following reports of links between DarkTrace and the former Autonomy CEO Mike Lynch. He is fighting a US extradition bid over fraud allegations relating to Autonomy’s sale to HP.
Darktrace Chief Executive Poppy Gustafsson said: "Our company is deeply rooted in the UK's tradition of scientific and mathematic research so we are especially proud to be listing on the London Stock Exchange."
With a market capitalisation of GBP2.4 billion, Darktrace would comfortably slip into the FTSE 250 in the next quarterly index review. Unconditional dealings begin on May 6.
On the London Stock Exchange, Darktrace joins fellow cybersecurity firm Avast, a FTSE 100 constituent with a GBP4.9 billion market cap. Avast shares were up 1.0% early Friday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.3% at 6,983.40
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Hang Seng: down 1.8% at 28,769.66
Nikkei 225: closed down 0.8% at 28,812.63
DJIA: closed up 239.98 points, or 0.7%, at 34,060.36
S&P 500: closed up 28.29 points, or 0.7%, at 4,211.47
Nasdaq Composite: closed up 31.52 points, or 0.2%, at 14,082.55
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EUR: soft at USD1.2111 (USD1.2120)
GBP: soft at USD1.3941 (USD1.3950)
USD: down at JPY108.77 (JPY108.94)
Gold: up at USD1,772.50 per ounce (USD1,768.68)
Oil (Brent): soft at USD68.17 a barrel (USD68.35)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Friday's Key Economic Events still to come
1000 CEST Germany gross domestic product - 1st release
1100 CEST EU preliminary flash estimate GDP
1100 CEST EU flash estimate euro area inflation
1100 CEST EU unemployment
0830 EDT US personal income & outlays
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People aged 40 and over in England are now being invited to book their coronavirus jabs as the UK prime minister faced further calls to launch an inquiry into the handling of the pandemic. NHS England said that text messages will be sent out from Friday to 40 and 41-year-olds allowing them to arrange their vaccination appointments. With people aged 42 to 44 having already been texted this week it means 2.5 million more people have been invited for their jab, it added. The expansion of the vaccine rollout comes as the latest data showed an estimated 91.5% of people aged 45 and over in England had received their first dose of Covid-19 vaccine by April 25, and just over four-in-five aged 70 and over had been given both doses.
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UK house price growth re-accelerated in April after the government extended the stamp duty holiday, figures from Nationwide showed. House prices jumped 7.1% on an annual basis in April, picking up from 5.7% in March. Annual house price growth had been above 6% in both January and February, but slowed down a touch in March in anticipation of the original stamp duty holiday end-date. In March, however, Chancellor Rishi Sunak extended the stamp duty holiday from the end of that month until the end of June, and after this a new GBP250,000 threshold will apply until the end of September. Month-on-month, UK house prices recorded the strongest growth since February 2004, up 2.1% in April after a 0.3% contraction in March.
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The Japanese manufacturing sector saw its strongest improvement in operating conditions in three years in April, the au Jibun Bank purchasing managers' index showed. The au Jibun Bank Japan Manufacturing purchasing managers' index rose to 53.6 in April from 52.7 in March. The figure climbed further above the 50.0 threshold, which separates growth from decline.
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BROKER RATING CHANGES
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SOCGEN RAISES MEGGITT TO 'HOLD' ('SELL') - TARGET 499 (418) PENCE
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BERENBERG RAISES SMITH & NEPHEW PRICE TARGET TO 2020 (1985) PENCE - 'BUY'
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COMPANIES - FTSE 100
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AstraZeneca retained its full-year guidance as profit grew in the first quarter, with the pharmaceutical firm expecting an "acceleration" in performance as the pandemic eases in the second half of this year. Total revenue for the first three months of the year was up 15% year-on-year at USD7.32 billion, with Product Sales revenue rising 15% to make up the bulk of group revenue at USD7.26 billion, while Collaboration revenue rose 43% to GBP63 million. Revenue from its beleaguered Covid-19 vaccine totalled USD275 million for the quarter. The jab's use has been restricted by age in many countries over links to rare blood clots - with this also listed as a side effect for the Johnson & Johnson Covid-19 vaccine - but regulatory agencies have stressed that the benefits outweigh the risks. Pretax profit for the quarter jumped 72% to USD1.61 billion from USD935 million a year ago. Chief Executive Pascal Soriot said: "Given the performance in the first quarter, in line with our expectations, we reiterate our full-year guidance. We expect the impact of Covid to reduce and anticipate a performance acceleration in the second half of 2021."
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Barclays posted a record quarterly profit figure as credit impairment charges were reduced. Pretax profit was a "record" GBP2.40 billion for the first quarter of 2021, up sharply from GBP913 million a year ago, even as total income fell 6% to GBP5.90 billion. Credit impairment charges were cut by 97% to GBP55 million from GBP2.12 billion. "As was the case throughout 2020, within Barclays International, performance in the CIB was strong this quarter, achieving a [return on tangible equity] of 17.9% on income of GBP3.6bn, just 1% down from our Q1 income performance last year, which was a very strong comparative. It also partially offset challenges in our consumer businesses that have been impacted by lower spend and activity levels as a result of the pandemic," said Chief Executive Jes Staley. For the year ahead, Barclays said the outlook remains uncertain due to the pandemic but expects to deliver "meaningful" year-on-year improvement in RoTE in 2021. The full-year impairment charge is expected to be "materially below" than of 2020's due to an improved economic outlook in the latter part of the first quarter - and if this persists, Barclays would expect to reduce the impairment provision level.
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Hikma Pharmaceuticals said the year is off to a good start with its Injectables, Generics and Branded divisions performing well. In Injectables, the firm said new product launches and demand for the broader portfolio in the US is partially offsetting reduced demand for Covid-19 related products, while Europe's strong performance has continued. The Branded business is performing well, Hikma added. The Generics business has seen continued demand for Covid-19 related products, and a good performance from recent launches, which more than offset increased competition on certain products. "We now expect our full year Generics revenue to be towards the top end of our guidance range of USD770 million to USD810 million and core operating margin to be around 20%," said Hikma. It also said the US Food & Drug Administration has approved Kloxxado for treatment of opioid overdose in adults and children.
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COMPANIES - MAIN MARKET AND AIM
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Card Factory said it has agreed headline refinancing terms, as it reported a better-than-expected store reopening. The greeting cards retailer said its performance since the reopening of stores in England and Wales on April 12 has exceeded its expectations, while shops in Scotland reopened at the beginning of the week and those in Northern Ireland open up on Friday. The firm added that it has agreed headline terms for refinancing with its current syndicate of commercial lending banks and will issue a further update once terms are documented. "Pending documentation of the revised facility terms, the banking syndicate has extended waivers in respect of anticipated covenant breaches to 31 May 2021, taking account of the company's cash flow projections, subject to certain conditions," said Card Factory.
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Friday's Shareholder Meetings
Admiral Group PLC - AGM
Argos Resources Ltd - GM re allotment of subscription shares
BBGI Global Infrastructure SA - AGM
Elixirr International PLC - GM re incentive stock options
James Fisher & Sons PLC - AGM
Minoan Group PLC - AGM
Pearson PLC - AGM
Rotork PLC - AGM
Safestay PLC - GM re hostel disposal
Supply@Me Capital PLC - AGM re 2019
Symphony International Holdings Ltd - AGM
Tremor International Ltd - EGM re appointment of non-executive directors
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By Tom Waite; thomaslwaite@alliancenews.com
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