UK stocks remained directionless at 1pm as investors weighed increasing risks to the global recovery and rising inflation.
Sterling gained as the latest UK inflation surprised to the upside. According to the Office for National Statistics, consumer prices jumped 3.2% in the year to August compared with a 2.1% rise the previous month.
At 1pm the FTSE 100 index of leading shares was flat at 7,029.
COMPANY NEWS
Housebuilder Redrow (RDW) posted a strong set of results for the period to the end of June. Full year revenues were up 45% to £1.94 billion, while pre-tax earnings were up 124% to £314 million, and the firm reinstated its dividend with an 18.5p per share payout.
It also reintroduced guidance for 2024, with revenues forecast to top £2.2 billion and earnings per share of more than 90p compared with around 74p for the year just ended. The shares added 0.5% to 703.3p.
Energy firm Tullow Oil (TLW) swung to a profit of $93 million for the first half to June compared with losses of more than $1.3 billion in the same period last year.
For the full year the company expects free cash flow to be around $100 million after all costs, assuming a crude price of $60 per barrel. At $70 per barrel, which looks the more likely scenario, free cash flow would rise to $150 million. The shares gained 2.8% to 46.3p.
Similarly, engineering consultancy Ricardo (RCDO) posted a full year pre-tax profit of £3.9 million against a loss of £5.3 million last year on the back of flat revenues as growth in its energy and environment, defence and rail businesses was offset by a decline in the automotive and industrial segments. The shares dropped 1% to 415.6p.
Motor group Pendragon (PDG) also reported a positive swing in earnings for the half to June, with a pre-tax profit of £35.1 million against last year’s loss of £31 million, on the back of a 49% jump in revenues.
Thanks to strong demand and tightness of supply, the firm reiterated its full year profit guidance of £55 million to £60 million and its target of £85 million to £90 million of profits by 2025. The shares gained 2.2% to 18.9p.
Shares in Restaurant Group (RTN) slipped 4.3% to 116p even after the firm posted better than expected like-for-like sales for the 15 weeks to the end of August, led by Wagamama which grew its revenues by 21% compared with just 8% growth for the restaurant market.
While the firm acknowledged there were ‘sector-wide challenges to navigate through financial year 2022’, better trading since re-opening led it to raise its full year operating outlook.
Shares in cyber-security firm Darktrace (DARK) jumped 12% to 716p after the company posted a 41% jump in revenues to $281.3 million for the full year to June and a 45% increase in new customers.
The group raised its guidance for the current financial year with revenues now seen rising between 35% and 37% instead of 29% to 32% and operating margins of between 2% and 5% compared with 1% to 4% previously.
Online review platform Trustpilot (TRST) slid 7.6% to 383p after first half losses rose from $5.8m a year ago to $17.2 million in the period to June, in spite of a 31% increase in revenues and raised guidance for the full year.
AIM ROUND-UP
Shares in legal services group RBG (RBGP:AIM) climbed 8.5% to 139.9p after the firm delivered a 52% uplift in first half revenues.
Data management firm Restore (RST:AIM) delivered a positive trading update for the eight months to the end of July, citing further positive momentum across its businesses and revenues running close to 20% above pre-pandemic levels, yet shares remained flat at 510p.
Games software and services provider Keywords Studios (KWS:AIM) reported strong organic revenue growth and margin performance for the six months to June, along with a return to dividend payments, yet the shares were out of favour, falling 4.3% to £30.64.
Shares in premium mixer-supplier Fevertree Drinks (FEVR:AIM) advanced 6.6% to £22.79 despite the firm posting lacklustre interim results and lowering its full year gross margin target.
Sales to the ‘on trade’, such as pubs, restaurants and hotels, were lower than analysts hoped, while gross margins were impacted by higher shipping costs to the US, with disruption and elevated logistics expenses seen continuing into 2022
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