The FTSE 100 dipped back below 7,000 in early trading on Tuesday following some mixed company updates and modest profit taking after the big gains of last week.
The UK’s benchmark index fell 0.2% to 6,986.18, taking its cue from Wall Street where stocks also fell overnight, with the tech-heavy Nasdaq dropping 1% and even the Dow Jones falling 0.3% as banks, energy firms and consumer-facing companies also headed lower.
It comes as the UK unemployment rate fell to 4.9% in the three months to February, according to latest figures from the Office for National Statistics. The fall, down from 5% previously, came despite most of the UK being under strict lockdown rules for at least some of the period. The ONS said the jobs market is ‘broadly stable’ but ‘remains subdued’.
In Asia, stocks had an up and down day with Japan’s benchmark Nikkei 225 plunging 1.97%, while the Hang Seng in Hong Kong gained 0.13% and China’s Shanghai Composite fell 0.13%.
As for commodities, gold dipped 0.12% to $1,772 per ounce, and Brent crude oil futures traded 1.1% higher to $67.78 a barrel.
PRIMARK OWNER CUTS DIVIDEND
In company news, Primark owner Associated British Foods (ABF) fell 2.5% to £23.98 after resuming its dividend payment at a lower rate as first-half profit halved following a slump in Primark sales as the national lockdowns forced stores to close.
For the 24 weeks ended 27 February 2021, adjusted pre-tax profit fell 50% to £319 million year-on-year as revenue slipped 17% to £6.3 billion. Primark’s adjusted operating profit slumped 90% to about £43 million.
The company declared an interim dividend of 6.2p per share, down from 12.05p per share last year. Looking ahead, the company said it continues to expect Primark profit to be lower than last year.
Chemicals group Elementis (ELM) jumped 17.5% to 159.5p after Sky News reported the firm has been the subject of a takeover bid from Nasdaq-listed Innospec in a cash and shares deal that values the FTSE 250 company at over 200p per share.
Mining giant Rio Tinto (RIO) edged 0.7% higher to £61.31 as it reported a drop in first-quarter production of iron ore, the commodity from which it makes the majority of its earnings, but maintained annual guidance ranges for all its products.
Output of the key steel-making ingredient from the group’s Pilbara operations in Australia in the three months through March fell to 76.4 million tons. That was down 2% year-on-year and 11% compared to the fourth quarter of 2020.
Rio Tinto said the fall was driven by above average wet weather at its mines through February and fixed plant reliability. Labour resource availability and weather challenges disrupted maintenance, while tropical cyclone Seroja impacted mine and port operations in April. Full-year iron ore guidance, however, remained unchanged.
AVAST LIFTS REVENUE GUIDANCE
Cybersecurity company Avast (AVST) jumped 4.2% to 491.4p after lifting its guidance on annual revenue growth following the sale of its family mobile business and continued demand seen in the first quarter of the year.
For full year 2021, the group now expects to deliver at the upper end of the 6-to-8% organic revenue growth guidance, with the consumer indirect segment revised to low single-digit percent growth.
Adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, margin percent was expected to remain broadly flat versus 2020. The sale of the family safety mobile business on 16 April, would be modestly earnings dilutive, benefiting reported growth rates over the balance of the year, the company said.
The updated guidance comes as revenue in the first quarter of the year, was boosted by strong demand for its cybersecurity products. For the first quarter ending 31 March 2021, revenue grew 10.5% to $237.1 million. The company recommended the payment of a final 2020 dividend of $0.112 cents per share.
Fresh prepared food provider Bakkavor (BAKK) gained 1.9% to 127.4p after resuming its dividend following improved performance in the first quarter of the year as lockdown restrictions begin to ease.
The company said that ‘while uncertainty remains, improved visibility on sales for the coming months has made the board more confident about the group's liquidity position’ and so it will be recommending the payment of the previously suspended final dividend for 2019 of 4p per share.
For the 13 weeks to 27 March 2021, revenue was 4.4% lower than the prior year and 2.6% lower on a like-for-like basis.
OTHER NEWS
Price comparison website Moneysupermarket.com (MONY) fell 1.3% to 267p after it said its first-quarter revenue had dropped 20%. Moneysupermarket, however, said it expected its full-year results to be in line with market expectations.
FTSE 250 gold miner Petropavlovsk (POG) gained 2% to 27.3p as it reported a 49% drop in first-quarter production but stuck to its annual output guidance.
Fund manager Jupiter Fund Management (JUP) shed 0.6% to 276.1p having reported an uptick in first-quarter assets under management, though with net outflows in the period of £800 million.
Investment manager and advisory support group Tatton Asset Management (TAM:AIM) jumped 8.5% to 410p on guiding for annual results to be ahead of analysts’ forecasts.
Tatton’s inflows for the year through March were £755 million, or 11.3% of opening assets under management, which jumped 35% to £9 billion, up from £6.7 billion year-on-year.
Cosmetics company Warpaint London (W7L:AIM) soared 11.1% to 120p as it said it had continued to experience improved trading conditions in the first quarter of 2021, with sales and margins both on the rise.
