UK WINNERS & LOSERS SUMMARY: DS Smith Falls As It Skips Final Payout

(Alliance News) - The following stocks are the leading risers and fallers within the main London ...

Alliance News 2 July, 2020 | 10:42AM
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(Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Thursday.

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FTSE 100 - WINNERS

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Associated British Foods, up 4.4%. AB Foods reported a double-digit revenue fall for the past nine months and said it expects profit at low-cost fashion retailer Primark to be a third of what was achieved a year ago. However, nearly all Primark stores have now reopened and early sales have been strong. AB Foods group revenue for the 40 weeks to June 20 was down 13% on a year ago at constant currency, with sales down 39% in the third quarter alone. Among divisions in the third quarter, grocery was the stand-out performer, with revenue up 9%, while retail sales at Primark slumped a sharp 75%. Primark stores were closed for most of the third quarter, with revenue recorded in the period relating to two short periods of trading before stores closed in mid-March and after they started to reopen at the end of the quarter. AB Foods said Primark stores have reopened more quickly than expected, particularly in Ireland, since its June 1 trading update. A total of 367 stores now have reopened, with the remain 8 expected to follow in the near future, it said.

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FTSE 100 - LOSERS

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DS Smith, down 6.9%. The packaging firm reported a rise annual profit - with box volumes ahead of internal targets - but has opted against a shareholder payout. For the 12 months to April 30, the London-headquartered packaging firm's pretax profit improved 5.1% to GBP368 million from GBP350 million. Revenue, however, slipped 2.1% to GBP6.04 billion from GBP6.17 billion. Profit grew despite a drop in revenue, DS Smith said, as it recorded GBP237 million in profit from discontinued operations, compared to GBP12 million the year before. The packaging firm has already declared it would not issue an interim dividend, but has now also decided against a final dividend too - as its short term outlook "remains too uncertain". DS Smith added, however, it "will actively consider the resumption of dividend payments", when it has "greater clarity" over its outlook.

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National Grid, down 5.8%. The power transmission and distribution went ex-dividend on Thursday, meaning new buyers no longer qualify for the latest payout.

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FTSE 250 - WINNERS

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Meggitt, up 7.9%. The aerospace and defence contractor said it expects a sharp drop in revenue in the first half of 2020, with falling revenue in its Civil Aerospace and Energy offsetting any growth in Defence. Coventry-based Meggitt said Civil Aerospace organic revenue in the six months that ended on Tuesday is expected to be about 30% lower, with its Jets business struggling. Its Energy unit expects to see revenue down 10% year on year, reflecting weaker market conditions in oil and gas and power generation sectors. Meggitt's Defence unit, however, is expected to deliver organic revenue growth of mid-single digits. "We continue to see good order flow and expect demand in this part of the business to remain robust throughout 2020," Meggitt added. Meggitt said it made "good progress" in its plan to reduce cost base, preserve cash and resize its business.

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Mitchells & Butlers, up 4.9%. Said it is looking forward to reopening of its pub estate as lockdown, caused by Covid-19, hurt its performance in the first half of its current financial year. Revenue for the 28 weeks to April 11 was GBP1.04 billion, down from GBP1.19 billion recorded a year prior, resulting in a pretax loss of GBP121 million versus a GBP75 million profit. "The business was performing very well before the enforced closure in response to Covid-19, building on the strengths of our estate of mainly freehold properties, our diversified and well-loved brands and our team's industry leading operational skills," explained Chief Executive Phil Urban. Prior to the lockdown, like-for-like sales growth was 2.6% in the first quarter, which was followed by a period of softer sales due to the stormy weather, but Mitchells & Butlers said it remained 1% ahead of the market.

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FTSE 250 - LOSERS

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LXI REIT, down 1.2%. The real estate investment trust said it has to date collected 84% of rent for the June to September quarter, despite the Covid-19 pandemic. A further 6% has been subject to an agreed deferral, of which the majority is due to be received within three months. Another 6% is subject to ongoing negotiations with tenants. The remaining 6% has been granted as temporary concessions.

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OTHER MAIN MARKET AND AIM - WINNERS

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Ryanair, up 3.2%. The budget airline saw a dramatic drop in passenger numbers in June as a result of air travel restrictions imposed by governments across Europe to contain the spread of Covid-19. Ryanair's traffic in June dropped by 97% to 400,000 passengers versus the 14.2 million passengers it carried a year earlier. The airline's subsidiary Lauda flew no passengers in June compared to 600,000 the year before. In early June, Ryanair announced Lauda's fleet was grounded because of the coronavirus pandemic, but will gradually start flying again on July 1. Ryanair had planned to shutter the loss-making arm but employees agreed to a last-minute wage deal. Ryanair said it operated just 2,800 scheduled flights in June versus its budgeted schedule of 79,600. The airline noted 95% of its flights arrived on-time. Ryanair's figures do, though, mark an improvement on May. The Irish budget airline reported a 99.5% dive in May traffic to just 70,000 passengers.

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By Lucy Heming; lucyheming@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
LXI REIT Ord 114.60 GBX -1.21 -
Smith (DS) PLC 332.00 GBX -1.63 -
Associated British Foods PLC 2,110.00 GBX -0.75
Ryanair Holdings PLC 15.22 EUR -1.62 -

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