UK stocks fell into the red by lunchtime on Thursday after the Bank of England maintained interest rates at 0.1%, which came as a host of corporate updates got an increasingly negative reception.
The UK’s benchmark FTSE 100 index fell 0.35% to 6,485, while the midcap FTSE 250 index gave up earlier gains to trade almost flat at 20,732.
GROWTH WORRIES HIT UNILEVER
Consumer goods giant Unilever (ULVR) led the blue-chips loser board on Thursday with a 4% slump to £41.62 after emerging market performance in the fourth quarter missed some market expectations.
Sales in emerging markets rose 1.2%, hurt in part by strict lockdowns in the first half of the year and declines in Thailand, the Philippines and in Indonesia in the fourth quarter. That compared to long-term sales growth targets across the region of between 3% to 5%.
Oil and gas major Royal Dutch Shell (RDSB) fell 1.8% to £12.49 as profit plunged to a two decade low last year as the coronavirus pandemic hit energy demand worldwide. Adjusted earnings for 2020 slumped 71% to $4.8 billion, the lowest since at least 2000, according to Reuters data.
Telecoms giant BT (BT.A) fell 2.1 to 125.9p after it reported a fall in profit as performance was weighed down ongoing legacy product declines and the impact of Covid-19 on its consumer and its enterprise units.
But not every stock was falling as catering outsourcer Compass (CPG) rallied 3.8% to £14.01, heading the FTSE 100 leaderboard after saying it anticipated second-quarter operating margins to improve by another 50 to 100 basis points, after its first-quarter operating margin rose to 2.7% from 0.6% in the preceding quarter.
The company reported a one-third fall in organic revenue for the December quarter after a tumultuous 2020 that was marred by school and office closures due to Covid-19 restrictions.
Homebuilder Barratt Developments (BDEV) gained 1.3% to 682p as the firm reinstated its dividend having reported an uptick in first-half profit, while an increase in completions propped up revenue.
ELSEWHERE ON THE MARKET
Engineering firm Renishaw (RSW) fell 3.3% to £59.20 despite its profit more than trebling in the first half as lower costs from travel curbs and fewer exhibitions during the pandemic bolstered performance.
The FTSE 250 company posted an adjusted pre-tax profit of £43.4 million for the six months to 31 December, compared with £14.3 million a year earlier. It’s also reinstating an interim dividend of 14p per share.
Water utility Severn Trent (SVT) dropped 2.8% to £23 despite saying it is ‘on track’ to deliver its full-year results in line with expectations and increased guidance for outperformance on customer targets to £50 million.
In its trading update covering 1 October 2020 to 4 February 2021, the company said its Water business is set for its ‘best ever performance’ on a number of measures, including the Compliance Risk Index and water quality complaints.
Oil services business Petrofac (PFC) gained 0.7% to 116.6p as it secured two contracts worth a total of $300 million through Petroleum Development Oman.
