UK WINNERS & LOSERS SUMMARY: AO World Jumps On Strong Revenue Forecast

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

Alliance News 15 October, 2020 | 10:55AM
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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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Just Eat Takeaway, up 0.5%. The online takeaway platform was extending gains from Wednesday after reporting a big rise in orders. The stock ended up 6.4% on Wednesday.

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FTSE 100 - LOSERS

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Whitbread, down 5.7%, InterContinental Hotels Group, down 3.2%. The hotel operators were lower on fears of stricter coronavirus restrictions. Millions of people in England will face tougher coronavirus restrictions, with pubs expected to be ordered to shut in Greater Manchester and households banned from mixing indoors in London. MPs in the capital have been told that London will move to Tier 2 at midnight on Friday, meaning households will be banned from mixing indoors including pubs from Saturday. "Fears over tighter lockdown conditions once again put a big dent in the travel and leisure sector, with Whitbread, International Consolidated Airlines and InterContinental Hotels among the big FTSE fallers," said AJ Bell's Russ Mould.

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Mondi, down 4.1%. The paper and packaging company flagged an uncertain outlook as third quarter earnings fell. Mondi reported underlying earnings before interest, tax, depreciation and amortization of EUR306 million for the third quarter of 2020, 20% lower when compared with the prior year. Compared to the second quarter of 2020, underlying earnings before interest, tad, depreciation and amortisation was down 13% from EUR353 million. Going forward, Mondi said the macro-economic outlook continues to be uncertain, however, it is confident that it will continue to demonstrate its resilience, while remaining well-positioned for when the recovery takes place.

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FTSE 250 - WINNERS

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AO World, up 16%. The online electrical goods retailer said it expects interim revenue to surge more than 50%, despite being faced with competitor bricks and mortar stores reopening from lockdowns during the half. AO said it expects revenue for the six months ended September 30 to surge 57% to around GBP715 million. It said UK revenue climbed 54% and Germany revenue jumped 83% on constant currency.

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FTSE 250 - LOSERS

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Domino's Pizza Group, down 12%. The pizza delivery chain said it is set to deliver good full-year profit despite the uncertain backdrop, with sales up in the third quarter of the year. UK & ROI sales were up 19% year-on-year in the third quarter ended September 30 to GBP342.1 million from GBP288.2 million. UK system sales were up 20%, with the UK accounting for 95% of total UK & ROI system sales. The company said that the government's reduction in value added tax to 5% from 20%, implemented in July, helped franchisees mitigate costs and enabled them to pass savings on to its customers. It however had limited direct benefit to the company's profitability. The company expects to report a full year underlying group profit in the range of GBP93 million and GBP98 million, in line with market expectations. It reported underlying pretax profit of GBP98.8 million in financial 2019. "Negative operational gearing is a very large factor as to why earnings momentum at Domino's has turned negative, in our view and the structural challenges are clear. Domino's is not able to do national campaigns hence the dispute with the franchisees is having a major impact on trading," said Liberum.

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OTHER MAIN MARKET AND AIM - LOSERS

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Ryanair Holdings, down 3.3%. The Irish carrier said it has reduced its winter schedule further due to increased flight restrictions imposed by European governments, leading to further staff cuts. Winter capacity between November and March has been cut to 40% of the year prior's levels, reduced from the previously planned 60%. The company expects the full-year traffic to be down by approximately 38 million passengers. This guidance could be further revised downwards if European governments continue to "mismanage air travel" and impose more lockdowns this winter, Ryanair said. Tighter restrictions have been imposed through much of central Europe, including Ireland, Austria, Belgium, Portugal and the UK. These have led to slightly weaker bookings in October and substantially fewer bookings in November and December. British Airways parent International Consolidated Airlines was down 4.2%, midcap carrier easyJet was down 4.4%, while holiday airline Jet2, formerly Dart Group, was down 3.2%.

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By Arvind Bhunjun; arvindbhunjun@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

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