London’s FTSE 100 began the day in a cautious mode as the US presidential election goes to the wire with both sides claiming victory.
The election race remains tight, with Republican candidate Donald Trump declaring a ‘big win’ having held onto the vote in Florida, seen as a must-win state for his re-election bid.
But Democrat Joe Biden has also declared himself ‘on track’ to claim victory, and has been given a boost by winning Arizona, a southwestern state which has usually been a Republican stronghold.
Markets also face the prospect of something they fear most - a contested outcome, with Trump calling the election a ‘fraud’ and insisting he’ll go to the Supreme Court over the result.
At around 8.30, the UK’s benchmark index was trading 0.08%, or 4.83 points, higher to 5,791.60,
The midcap FTSE 250 index, expected to fall further than the FTSE 100 given its domestic focus and therefore lack of support from a weaker pound, defied expectations to trade 0.33% higher to 17,550.05.
MARKS & SPENCER HAILS ‘ROBUST’ PERFORMANCE
On a relatively quiet day for corporate news, retailer Marks & Spencer (MKS) gained 2.9% to 94.6p despite seeing revenue fall 15.8% in the six-month period to 26 September, as it hailed a ‘robust performance’ overall in the face of Covid-19.
The company posted a statutory pre-tax loss of £87.6 million, down from a pre-tax profit of £158.8 million a year ago, but free cash flow was up from £23.3 million to £77.6 million.
Its food business saw life-for-like sales growth of 2.7%, and 6.6% if hospitality is taken out of the equation, with the company also enjoying a net profit of £38.8 million from its 50% share of Ocado Retail.
Packaging company Smurfit Kappa (SKG) increased 2.59% to £31.74 after it reported a third quarter performance ahead of internal expectations with earnings before interest, tax, depreciation and amortisation (EBITDA) of €390 million.
For the nine months to 30 September the company delivered EBITDA of €1.13 billion at an EBITDA margin of 17.8%. The company said it was still on track to deliver full year earnings in a range of €1.46 billion to €1.48 billion.
The company announced a quarterly dividend of 27.9 cent per share putting it in line with ‘the dividend payment cycles of previous years’, according to CEO Tony Smurfit.
Food company Kerry (KYGA) gained 2% to €106.60 after it reinstated earnings guidance, forecasting a return to growth in the fourth quarter on signs of recovery in its foodservice business.
‘While there remains a high level of uncertainty, based on current market conditions, we expect business volumes to return to growth in the final quarter and are guiding a full year earnings per share decrease of 8%-to-11% in constant currency,’ the company said.
For the three months ended 30 September, revenue fell 4.5%, reflecting a volume reduction of 4.7%, increased pricing of 0.3%, an adverse translation currency impact of 1.1% and contribution from acquisitions of 1%.
OTHER COMPANY NEWS
Construction firm Morgan Sindall (MGNS) gained 5.7% to £12.30 as it said it expected full year profit to be slightly above the top end of its previously guided range of £50 million to £60 million.
The company announced plans to pay an interim dividend of 21p per share, in line with 2019’s payment as it noted ‘momentum within the group’s operations has continued to increase following the Covid-related disruption in the first half’.
Sub-prime credit provider Provident Financial (PFG) rose 2.87% to 240.1p after it continued to trade in-line with internal plans in the third quarter and remained on track to hit expectations for 2020.
Fund manager Apax Global Alpha (APAX) edged 0.13% higher to 159.4p after it reported strong third-quarter performance as net asset value return grew thanks to a boost from its private equity portfolio.
For the three months ended 30 September 2020, net asset value return was 8.5% as the private equity portfolio returned 12.4% in the quarter. The company paid a dividend of 4.87p during the period.
Cybersecurity services provider ECSC (ECSC:AIM) jumped 9.4% to 74p after it said third-quarter revenue had exceeded its average quarterly revenue for 2019.
For the four months since the interim period end of June 2020, its managed detection and response recurring revenue was up 22% compared with Q3 2019, and adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) profit exceeded £50,000 per month.
