UK stocks open 1.2% higher; Serco soars on profit upgrade

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UK stocks opened more than 1% higher on Friday, boosted by a persistently weak pound as Brexit talks reach a crunch phase, plus a positive trading update from Serco.

At 0826, the benchmark FTSE 100 index was up 68.33 points, or 1.2%, at 5,900.85.

Serco, a security, health and transport services group, soared 15% to 136.7p after it upgraded its annual revenue and profit guidance, citing strong third-quarter sales growth and tight cost control.

Serco's underlying trading profit for the year through December was now expected at between £160 million and £165 million, compared to previous guidance of £135 million-to-£150 million.

Mining titan Rio Tinto gained 1.2% to £47.175, having reported a slight fall in third-quarter iron-ore production year-on-year, as its operations returned to normal following pandemic-led disruptions.

Compared to the second quarter, Rio Tinto's iron ore production rose 4%. The company left its annual production guidance mostly intact, apart from a slight tightening of its titanium output forecast.

Pub chain J.D. Wetherspoon fell 4.6% to 915.5p on swinging to a £34.1 million annual loss, while warning of an uncertain outlook for pubs amid what it claimed where 'ill-thought-out' government restrictions to curb Covid-19.

Wetherspoon said its like-for-like sales in the first 11 weeks of the new fiscal year were down 15% amid the recent introduction of nationwide 10pm pub curfew and fresh local lockdown measures.

Fund manager Man firmed 5.2% to 123.35p as it reported an uptick in third-quarter funds under management after enjoying fresh inflows into its funds.

Rival money manager Jupiter Fund Management went in the opposite direction, falling 3.7% to 230p, as it reported quarterly outflows.

Out-of-favour fashion retailer Superdry dropped 9.3% to 136.99p on news that chief financial officer Nick Gresham had stood down, with immediate effect.

Superdry said a search for a permanent replacement would start while interim arrangements were put in place.

Industrial chain manufacturer Renold added 0.4% to 11.5p after announcing that it remained profitable in the first half of its financial year, despite revenue dropping 17% to £82 million.

Renold said trends suggested its order intake should continue to slowly improve, albeit at levels below the prior year in the near term.

Retail space management group SpaceandPeople sank 14% to 4p as it posted a deeper first-half loss after the pandemic hurt shopping centres and other high footfall venues, sending its revenue down 72%.