The UK equity market started Thursday’s trading struggling for direction despite positive trading updates from companies including Spirent Communications (SPT) and Associated British Foods (ABF).
However the performance of overseas markets provided contradictory messages with the US equity markets ending their session on a weaker note, despite treasury yields retracing from their highs.
In contrast Asian markets put in a more encouraging performance, following news that China had cut another two key lending rates in an attempt to further stimulate the economy. The Hang Seng Index ended the session 3.4% firmer and the Nikkei 1.1% higher.
In early trading the blue chip FTSE 100 index was trading 0.12% lower at 7,580.32 and the mid-cap 250 index was 0.12% higher at 22,682.65.
CORPORATE NEWS
Shares in Primark owner Associated British Foods (ABF) drifted 1% lower to 2108p despite reporting a rise in revenue underpinned by growth in its food and retail businesses. This was despite the impact of cost pressures and omicron.
Retail sales were 36% ahead of last year at £2.6 billion, with the operating margin ahead of expectations.
Its grocery, sugar, agriculture and ingredients revenues in aggregate were 6% ahead of last year at constant currency, while retail sales were up 36% ahead of last year.
Looking ahead, the company said it expects 'Primark sales from now to April to be significantly better than sales in the comparable period in the last financial year, when the estate was largely closed.'
Shares in assurance solutions provider Spirent Communications (SPT) rose 5.6% after announcing that it expected to deliver adjusted operating profit 'slightly ahead' of market expectations following a 'strong' performance in the final quarter of the year.
The company said it now expected to deliver an adjusted operating profit slightly ahead of market consensus of $116 million.
'Strong order intake growth continued through to the end of the year, resulting in full year revenue growing by 10% (7% organically) to $576 million,' it added.
Mr. Kipling cake maker Premier Foods (PFD) raised its annual profit guidance following better-than-expected growth in the third quarter of the year.
Trading profit for this financial year was now expected to be at least £145 million and adjusted profit before tax at least £125 million, following the delivery of 'three strong quarters of trading, and taking good momentum into the final quarter,' the company said.
The upbeat guidance was supported by stronger sales in Q3, with sales up 11.3% on a two year basis.
The shares responded positively to the news rising 3.6% to 114p.
Gambling company Entain (ENT) upgraded its outlook on profitability as revenue grew in the fourth quarter of the year, led by a boost from the reopening of the retail estate.
Fiscal 2021 EBITDA (earnings before interest, taxes, depreciation, and amortisation) was expected to be in the range of £875 million to £885 million, ahead of previous expectations.
For the period from 1 October to 31 December 2021, net gaming revenues were up 4%, as retail grew 60% year-on-year, offsetting a 9% decline in online gaming revenue, which was due to 'particularly strong comparatives,' the company said. The shares added 0.5% to £17.19.
Shares in clothing retailer Superdry (SDRY) jumped 3.5% to 257.76p after announcing that it had made a profit in the first half of the year as lower revenue, was offset by an improvement in margins as the fashion retailer increased prices .
For the 26-week period from 25 April 2021 to 23 October 2021, pre-tax profit was £4 million compared with a loss of £18.9 million last year, while revenues fell 1.9% year-on-year and 24.9% on a two-year basis.
Looking ahead, the company said it expects to report 'further gross margin improvement, together with some price realignments in selected categories and markets.'
'Our performance over the peak trading period has given us confidence that we will achieve current market expectations for FY22 adjusted PBT.'
Shares in clay and concrete building products manufacturer Ibstock (IBST) rose 4.2% to 210.8p after announcing that full-year profit was set to be 'modestly' ahead of its previous guidance following strong trading in the final quarter.
Ibstock now expects full-year revenues to rise 29% on the year to £409m, while adjusted earnings before interest, tax, depreciation and amortisation are forecast to be modestly ahead of its previous expectations.
A list of FTSE 100 index movers can be seen here.
