UK stocks traded marginally higher at lunchtime despite European markets sinking deep into the red and US futures pointing to a weak opening on Wall Street.
Investors seemed to shrug off sharply rising European virus cases and the re-appointment of Fed chairman Jerome Powell, which stoked concerns the withdrawal of monetary stimulus would be accelerated to counter inflationary pressures.
Brent crude futures were 0.5% lower at $79 per barrel while gold gave up the last of its recent gains and once again slipped below the $1,800, trading down 0.8% at $1,794 an ounce.
At midday the FTSE 100 index of leading shares was up three points at 7,258 led by housebuilders and construction materials stocks following a broker upgrade and better results.
AO PLUNGES
Shares in online white goods retailer AO World (AO.) collapsed 16% to 104p after the company reported revenues and profits below its previous guidance and lowered its full year outlook.
The FTSE 250 company blamed UK delivery driver shortages and supply chain issues, while some shoppers have gone back to their old bricks and mortar shops.
The firm said 'the all-important current peak trading period is significantly softer than we anticipated only eight weeks ago'.
Water company Severn Trent (SVT) said first half revenues grew 8% to £958 million while profit before interest and taxes was almost 14% ahead at £256 million.
Growth was driven by higher consumption of non-household consumption as more customers returned to normal operations after restrictions were lifted.
Adjusted earnings per share were up 6% to 54.4p reflecting an exceptional deferred tax charge. The board recommended an 0.6$ increase in the interim dividend to 40.86p per share. The shares inched up 1% to £28.26.
Construction company CRH (CRH) was the best performer in the FTSE 100, gaining 3.7% to £37.92 after it said nine-month sales through September rose 11% to $22.8 billion, driving a 15% increase in EBITDA (earnings before interest, taxes, depreciation, and amortisation) to $3.9 billion.
The company said underlying demand and pricing progress continued across key markets and it expected full-year EBITDA to be more than $5.25 billion, along with further margin expansion.
Food-service company Compass (CPG) said fourth quarter underlying revenues recovered to 88% of 2019 levels and margins improved to 5.4%.
For the full year underlying revenues were 6.3% lower at £18.1 billion while operating profit was 55.4% higher at £811 million reflecting a 1.6% increase in operating margin to 4.5%.
The company expected organic revenue growth of between 20%-to-25% in fiscal 2022 and anticipated the underlying operating margin to be over 6%. Progress was expected to be second half weighted due to ‘mobilisation costs and inflationary pressures during H1’ the company said.
The dividend pay-out policy was reinstated to be around 50% of underlying earnings per share. The shares climbed 3% to £15.16.
PET OWNERSHIP BOOST
Shares in pet supplies retailer Pets at Home (PETS) leapt 6% higher to 486p after the company said it expected full year profit to be at the top end of analyst expectations.
First half profit jumped 81% to £70.6 million as revenues climbed 8% to £677.6 million, boosted by pet ownership.
The interim dividend per share was increased by 72% to 4.3p year-on-year. The company said it now saw a pathway to £2.3 billion of revenues over the medium term.
Industrial thread manufacturer Coats (COA) said revenues grew 22% across the four months to 30 October and eclipsed 2019 levels by 6% driven by market recovery and market share gains.
Looking ahead, the company anticipated performance for the full year 2021 would be in line with its expectations. The shares were flat at 68p.
Shares in food producer Cranswick (CWK) gained 1% to £36.68 after it said first half profit was 17.7% higher at £63.2 million as revenues climbed 6.6% to £993.1 million driven by elevated retail demand offset by reduced revenues from its Far East export markets.
The interim dividend was increased by 7.0% to 20.0p per share from 18.7p per share previously. The company kept its outlook for the full year, saying rising costs from labour and supply chain pressures had been 'proactively managed' with excellent customer service levels maintained.
News publisher Reach (RCH) said revenue growth was currently ahead of full-year expectations following a recovery in digital advertising despite growth returning to a more normalised pattern in the second half of the year.
For the period from 28 June 2021 to 21 November 2021, revenues grew 1.2% overall, with digital up 17.2% and print down 3.5%. However, investors were unimpressed and sold the shares down more than 5% to 283p.
