London’s FTSE 100 softens 0.6% to 7,377 on Thursday amid a mixture of big names falling such as Royal Dutch Shell (RDSB) and BP (BP.), and several large caps trading without the rights to their dividend including Lloyds Banking (LLOY) and Direct Line Insurance (DLG).
Over-50s specialist SAGA (SAGA) slumps 39% lower to 65.1p on the news earnings are going backwards as it struggles to make a success with insurance broking and says volumes and margins are under pressure with its tour operations. Amid a fundamental strategy shift to address long-term challenges, SAGA slashes the dividend and warns profits for 2019/20 will disappoint due to lower insurance margins, investment in new products and ‘a change in approach to renewal pricing’.
However home repairs-to-improvements business Homeserve (HSV) is marked 19p higher to £10.91 on the news adjusted pre-tax profit for the year to March 2019 will be ‘at the upper end’ of market expectations - consensus calls for £160.6m - and well ahead of the prior year’s £141.7m haul.
Homeserve is basking in the glow of ‘another very good year’, having generated rapid growth in North America and seen revenue at its Checkatrade business rise more than 30%.
Electrocomponents (ECM) sparks up 13.4p to 610.2p as the industrial and electronics products supplier expects to deliver strong adjusted pre-tax profit growth for the year to March following a good fourth quarter showing.
Online electricals retailer AO World (AO.) cheapens 2.9% to 94.2p as a full year trading update fails to impress. While the performance for the year to March is expected to ‘fall within the range of current market forecasts’, with sales up 13% to around £900m, Bolton-based AO World guides to annual adjusted EBITDA ‘at the lower end of market expectations’, so a profit warning in all but name.
Restructured maternity products purveyor Mothercare (MTC) sheds 3.8% to trade at 21.5p, despite guiding towards full year profit in line with market expectations, as investors home in on an 8.8% decline in fourth quarter UK like-for-like sales. Turnaround prospects remain uncertain, with CEO Mark Newton-Jones expecting ‘market conditions in the UK and in some international markets to remain challenging’.
TV and film rights business Entertainment One (ETO) clips ahead 3.5% to 460p as CEO Darren Throop updates on a solid showing for the year to March 2019, driven by strong momentum in television, growth in its Family & Brands business and the restructuring of the Film operations. There’s also a confident outlook statement from the Peppa Pig-to-PJ Masks brand owner, which flags a ‘growing network of creative partners and exciting content development and production pipeline’.
Israeli tailoring tiddler Bagir (BAGR:AIM) rebounds 17% to 1.4p on 2018 results showing a return to underlying profitability in the second half and news of a strong start to 2019, with sales up 46% for the first three months.
Digital marketing technology minnow Mporium (MPM:AIM) improves 2.7% to 5.75p after reporting ‘outstanding’ first quarter growth following the introduction of new business division MporiumX, and reiterating its target of EBITDA break-even during 2019.
