(Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Wednesday.
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FTSE 100 - WINNERS
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J Sainsbury, up 1.5%. The supermarket chain announced a freeze on putting new cash into its Financial Services arm as part of an overhaul of the unit. The grocer said it will "immediately stop new mortgage sales" and have no more "capital injections" after a GBP35 million investment in the year ending February 2020. It also aims to cut the cost to income ratio by around 50%. The measures are part of a "five year plan" for its financial services unit with the aim of doubling underlying pretax profit and deliver double digit returns on capital employed. In the second quarter ended September 12, retail sales, excluding fuel, rose by 0.1% year-on-year but on a like-for-like basis, fell by 0.2%. Including fuel, sales also rose by 0.1% on a year before but fell by 0.4% on a like-for-like basis. Sainsbury's said an internal review resulted in plans to launch 10 new supermarkets but close between 10 to 15. Roughly 100 new convenience stores will be built but between 30 and 40 will be closed. It also plans to open roughly 80 new Argos stores but close between 60 and 70.
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Polymetal International, up 1.1%, Fresnillo, up 0.1%. The gold miners were tracking spot gold prices higher quoted at USD1,531.40 an ounce, up from USD1,525.82 late Tuesday. Gold rose after the US Democrats launched an impeachment inquiry against President Donald Trump on Tuesday. "Gold extended its run higher on the back of the impeachment announcement, buoyed by a softer dollar and broader risk-aversion. The yellow metal is continuing to find resistance though around the early August highs, a level which it will need to break in order to knock the gold bears and regain some upward momentum," said OANDA markets analyst Craig Erlam.
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FTSE 100 - LOSERS
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Halma, down 3.5%. Shares in the hazard detection firm were lower despite saying it made "good" progress in the first half as it makes changes to its executive board to "achieve its growth ambitions". Halma said its performance was in line with expectations in the period from April to date and included further organic constant-currency revenue growth. Last year, for the six months to the end of September 2018, Halma delivered revenue of GBP585.5 million. Turning to its executive board, the company had made three changes during its financial first half under "planned succession processes". Laura Stoltenberg will succeed Adam Meyers as chief executive of Medical & Environmental sector from Tuesday next week. Meanwhile, Catherine Michel has joined Halma as first chief technology officer and Ruwan De Soyza has joined Halma as general counsel & company secretary following the retirement of Carol Chesney.
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FTSE 250 - WINNERS
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Babcock International, up 3.5%. The defence outsourcer said trading is in line with expectations with its marine business performing well despite headwinds in its Nuclear segment. Its Marine unit was described as "performing well" with strong orders and increased activity across its UK warship support business. Meanwhile, the Nuclear unit experienced "increased" activity levels in defence but markets remain challenging for civil nuclear. Babcock reiterated guidance given in May for the financial year ending March 2020. It expects underlying revenue to be around GBP4.9 billion with underlying operating profit between GBP515 million and GBP535 million. Babcock expects free cash flow of "over" GBP250 million and net debt is forecast to continue to fall. For the year ended March 2019, Babcock generated GBP588.4 million underlying operating profit on underlying revenue of GBP5.16 billion.
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FTSE 250 - LOSERS
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Aston Martin Lagonda, down 5.8%. The Valkyrie hypercar maker said it completed the pricing of USD150.0 million in 12% senior secured notes due mid-April 2022. The cash raised will be used to improve liquidity as well as repaying short-term borrowings and related transaction fees, Aston Martin said. Interest on the senior secured notes will accrue at the rate of 12% per annum, with the associated interest charge in the 2019 results expected to be GBP5 million. The company said Aston Martin Capital Holdings has an option to issue up to USD100.0 million in additional notes. If these notes are issued unsecured, the interest will accrue at the rate of 15% per annum, the company explained. The issuance of these additional noted is subject to a condition of 1,400 orders of the new DBX SUV being received within nine months of the secured notes issuance, Aston Martin said. AJ Bell's Russ Mould noted: "Part of Aston Martin's debt is structured as a PIK or payment-in-kind. Rather than paying interest each year, the interest is rolled up and you end up paying a higher overall payment at maturity. History tells us companies with high debt repayment obligations, particularly those involving PIK notes, can get into real trouble in a market downturn if earnings are hit and they struggle to service the debt."
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BBA Aviation, down 2.8%. Berenberg cut the aviation support services company to Hold from Buy.
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OTHER MAIN MARKET AND AIM - WINNERS
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Safestay, up 11%. The hostel operator reported a first-half revenue increase and said it forecasts full-year growth after strong summer trading. In the six months to June 30, revenue increased by 24% to GBP8.1 million from GBP6.5 million in the first half of 2018, but the firm recorded a widened pretax loss to GBP904,000 from GBP790,000. Finance costs rose by 83% to GBP1.5 million and depreciation & amortisation expenses more than doubled to GBP1.6 million from GBP777,000. Safestay also reported a 6.0% year-on-year rise in average bed rate, to GBP19.50 from GBP18.40. The company said the average bed rate excludes properties in Vienna and Brussels as they are currently operating as hotels and so have higher fees. Safestay added that it has experienced "positive summer trading" and forecasts full-year revenue to exceed GBP17.0 million. This would represent a 16% increase on 2018's revenue of GBP14.6 million.
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OTHER MAIN MARKET AND AIM - LOSERS
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Alexander Mining, down 33%. The miner said it will dispose of its MetaLeach subsidiary and change strategy. Alexander Mining said it conducted an operational review and "concluded that it is no longer in shareholders' interests for the company to continue to provide financial support indefinitely for its mineral processing technology activities". These activities are carried out by MetaLeach, a wholly owned subsidiary of Alexander Mining, so it will dispose of the subsidiary. This turn Alexander Mining into a cash shell, as defined by AIM rule 15, at which point the company will seek "to complete a suitable reverse takeover". As a cash shell, Alexander will be required to undertake a reverse takeover within six months of its general meeting or else its shares will be suspended. If no acquisition is made after six months of suspension, then Alexander's AIM shares will be cancelled.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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