London’s FTSE 100 and FTSE 250 open in negative territory on Thursday, off 28.7 points to 7,390 and trading 26.8 points lower at 19,987 respectively, weighed down by a cut in UK growth forecasts, volatile oil prices and weaker overnight trading on Wall Street and in Asia.
Among the blue chips, British Gas owner Centrica (CNA) crashes 16% lower to 137.1p on a full year profit warning. In its business division, Centrica is seeing ‘significant market pressure’ in North America while improved operational performance in the UK is not yet being felt on the bottom line. In the UK consumer operations, margins are being squeezed with account losses and warmer weather and British Gas is still losing customers and market share.
Centrica insists that with net debt expected to be within its targeted £2.5bn-to-£3bn range and 2017 adjusted operating cash flow expected to be above £2bn, ‘the current level of the full year dividend per share is underpinned’, although investors are unconvinced.
Struggling babywear retailer Mothercare (MTC) slumps 18% to 68.75p after swinging to a first half loss and warning of a recent softening in the UK market with lower footfall and spend. The maternity products specialist also says ‘there is no clear sight as to when things will bottom out’ in the Middle East region which is dragging down its international business.
Wine specialist Majestic Wine (WINE:AIM) fizzes up 19.25p or 5% to 402.5p as the market toasts strong half year results across all measures, with sales, profits, free cash flow and the dividend all rising. Moving back into the black as Naked Wines turned a profit in all three geographic markets, Majestic Wine's earnings were also up sharply in the traditional retail business.
Pubs and restaurants play Mitchells & Butlers (MAB) cheapens 10.5% to 231.1p after serving up a decline in full year adjusted operating profits. The group has been hit by a combination of higher food and drink, property and labour costs.
Paragon Banking (PAG) perks up 11.5p to 472.4p on robust full year results and the announcement of a further £50m share buyback programme. CEO Nigel Terrington says his charge made ‘outstanding progress across all business lines with lending growth exceeding 29% and deposit funding nearly doubling to £3.6bn over the year.’
Elsewhere, Peter Cruddas-led online financial trading play CMC Markets (CMCX) sparks up 7.2% to 178.75p as half year pre-tax profit jumps 58% to £29.8m, reflecting high value client business and the group’s operational gearing.
Engineer Rotork (ROR) grinds 6.3p higher to 266.8p on news of an 11.8% increase in third quarter orders, the actuator manufacturer and flow control specialist also flagging good progress across the water, power, and industrial process markets.
