Tuesday has the look of another down day as early trading sees the FTSE 100 index slide back below the 7,000 mark. At 8.30am the UK’s blue-chip benchmark is trading around 30 points off at 6,970.32.
This follows a rocky ride for lading US stocks overnight with the Dow down nearly 400 points and Nasdaq falling 219 points lower as technology-led stock market heavyweights such as Apple, Amazon and Facebook slumped.
In today’s UK corporate news, health and safety kit supplier Halma (HLMA) is today’s biggest FTSE 100 riser, up 3.5% at £13.57. The company, exposed to regulatory and demographic trend benefits, reports 20%-plus rises in statutory pre-tax profit and earnings on a 16% rise in revenue, to £585.5m. The dividend is raised by 7% to 6.11p.
PLUS500 BEATS
Broking house Plus500 (PLUS) says it is on track beat market forecasts for full year 2018 after strong momentum reported at a third quarter trading continued into November.
'We are delighted to report positive momentum for October and November as we move towards the end of the financial year,' chief executive Asaf Elimelech said. Plus500 shares jump 4.6% to £13.44.
Yet the market fallers continue to mount up. One of the worst hit today is online white goods retailer AO World (AO.), which reports almost no progress at cutting losses. The company reports first half operating losses of £11.7m, making little dent in the £12m deficit chalked-up in 2017.
The latest figures does include £1.4m of one-off costs after its proposed acquisition of Mobile Phones Direct, however, but investors remain concerned that the group is simply not growing fast enough to neutralise losses. AO reported first half revenue growth of just 9% to £404.2m, sending the share price spinning more than 12% lower to 108.8p, their lowest level since January.
Discount air passengers seems to be largely ignoring Brexit woes, judging by a 40% full year profits surge at EasyJet (EZJ). The budget airline posted a 10% jump in passenger numbers to 88.5m with load factor (the number of available seats filled) stable at 92.9%.
But while pre-tax profit rise from £405m to £578m, and the flyer hikes the dividend by 43% to 40.9p per share, investors remain far more worried about the near-term political impact of laboured Brexit negotiations. That likely explains today’s 2.5%% share price slide to £11.47.
KCOM HALVES DIVIDEND AFTER WARNING
It’s a disastrous day for shareholders in consumer and business communications provider KCOM (KCOM) which issues another profit warning on Tuesday and slashes its dividend in half.
Earnings before interest, tax, depreciation and amortisation (EBITDA) is now expected to be circa 5% below expectations for the year to March 2019, forecasts which were already factoring in an 8% decline on last year.
That news sparks a massive sell-off in the share price, which collapses by nearly 40% to 57p, valuing the business at less than £300m. The savagery of the market’s reaction is not terribly surprising since income was one of the few attraction so the stock, now largely taken off the table.
Elsewhere, films and TV shows producer Entertainment One (ETO) continues to talk up a busy list of movie blockbusters, including the soon to air Stan & Ollie film. The company reports a 7% increase in adjusted pre-tax profit for the six months to 30 September to £42m.
The company is also mulling ‘a number of initiatives for Peppa Pig,’ its super popular kids series. Yet investors shrug this news off, leaving the shares down 3.4% at 371.4p.
BANK PROFITS UP, SHARES DOWN
Banking group CYBG (CYBG), which owns Yorkshire and Clydesdale banks, reports a 13% rise in annual pre-tax profits to 30 September, but sparks shockwaves after issuing a stern warning about Brexit.
The company, which earlier this year paid £1.7bn to buy out Virgin Money, said that ‘Brexit negotiations mean the external political and macroeconomic environment remains inherently uncertain’.
That caution sends the stock spinning nearly 8% lower to 228.8p as investors head for safer investments, ignoring the firm rise in underlying pre-tax profit to £331m.
Instrumentation and controls company Spectris (SXS) reports sales up 9% in the four months through October, while its full-year performance was expected to be in line with its expectations.
But perhaps more interesting, the company is also looking at attempts to streamline and focus itself, unveiling a strategic review. Shares in Spectris dip 0.5% to 118.2p.
Catering firm Compass (CPG) said it had a strong year with healthy revenue growth, driven by an excellent performance in North America, an acceleration in Europe and good progress in Rest of World.
For the financial year to 30 September it reported revenue nudging 1.7% higher to just shy of £23bn from and operating profit up from £1.67bn to £1.69bn.
