(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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3i Group, up 3.0%. Exane BNP started coverage on the private equity investor with an Outperform rating.
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Glencore, up 2.5%. Goldman Sachs started coverage on the miner and commodities trader with a Buy rating.
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FTSE 100 - LOSERS
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Burberry Group, down 8.0%. The fashion house reported on a painful first-quarter, with around 500 jobs being cut in the UK and globally. The company is axing office space and makes cuts across stores outside the UK after lockdown measures sent sales tumbling. In the 13 weeks to June 27, retail revenue slumped 48% annually to GBP257 million from GBP498 million. Comparable sales were 45% lower, compared to a 4% fall during the same period a year ago. Over the whole quarter, the Asia Pacific region had a 10% sales fall, but returned to growth in June. Europe, Middle East, India & Africa had a 75% sales plunge in the first quarter. Similarly impacted by lockdown measures was the Americas region, where sales slumped 70%. Looking ahead to its second-quarter, the expects the period to be "materially impacted" by the pandemic, but expects a more tempered sales decline between 15% and 20%. It added that it expects its first-half gross margin to decline by between 200 and 300 basis points annually, but operating expenses to be cut by "mid-teens percentage".
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HSBC Holdings, down 1.5%, Standard Chartered, down 1.3%. Shares in the Asia-focused banks were lower after US President Donald Trump on Tuesday stripped Hong Kong of preferential trade treatment. Trump also authorized sanctions on banks over China's clampdown in the financial hub, infuriating Beijing which vowed to retaliate. In a discursive news conference dominated by attacks on his domestic rivals, Trump declared himself to be the toughest president ever on China, a country he is increasingly positioning as his nemesis ahead of November elections. Trump announced that he had issued an executive order on Hong Kong as he predicted decline for the city, on which Beijing recently imposed a tough new security law. China on Wednesday vowed to retaliate, saying the Hong Kong Autonomy Act "maliciously slanders" its legislation in Hong Kong.
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FTSE 250 - WINNERS
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Hochschild Mining, up 6.1%. The gold miner said that second-quarter and first-half production was impacted by the Covid-19 pandemic, but the company expects to restart operations at the Inmaculada mine in Peru by next week. The miner, which also operates mines in Argentina, said attributable gold production in the six months to June 30 fell to 79,073 ounces from 138,080 ounces a year ago. Silver production fell to 4.1 million ounces from 8.7 million ounces. For the second quarter, attributable gold production declined to 19,647 ounces from 70,660 ounces. Silver output fell to 1.1 million ounces from 2.9 million. Hochschild Mining said its operations are currently halted due to a number of cases of Covid-19 with a reduced workforce performing care and maintenance activities. The Inmaculada mining team is expected to remobilise during the week starting July 20 and is scheduled to reach full production by the end of July.
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FTSE 250 - LOSERS
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Dixons Carphone, down 11%. The mobile phone and electrical goods retailer decided against issuing guidance for financial 2021 due to the "high levels of uncertainty" created by the Covid-19 pandemic, but warned that its mobile phones business will be hurt by the virus outbreak. Dixons Carphone reported a narrowed pretax loss for the financial year that ended May 2 of GBP140 million compared with a GBP259 million loss a year ago. Adjusted pretax profit fell 51% to GBP166 million from GBP339 million due to a poor performance from its mobile phones business and Covid-19 related store closures. The adjusted profit figure was GBP44 million below the company's guidance reiterated in January. "Customers may have splurged on their at-home setups, but as the economic outlook gets gloomier by the day, it's fair to assume that discretionary spending is going to be pinched. That will hurt Dixons' top line, and one way to help mitigate that is through discounting prices - but that would compound the existing margin problem," said analysts at Hargreaves Lansdown.
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OTHER MAIN MARKET AND AIM - WINNERS
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Galliford Try, up 6.5%. The construction firm said its sites across the UK are now operational with underlying operations performing well. The company said its order book was up 10% to GBP3.2 billion from GBP2.9 billion last year. The construction firm said it was well-capitalised, with cash at June 30, of GBP195 million against net debt of GBP57 million last year and average month-end cash during the six months of GBP140 million. Galliford noted that, as expected, the combination of site closures and reduced productivity significantly reduced revenue in the final quarter of the financial year. Further, it said that the cost of implementing new operating procedures and site programmes has led to a material reduction in gross margin in the financial year to June 2020, with divisional operating margins expected to show a loss of 5%. However, productivity levels on its sites have gradually increased since the beginning of the lockdown, and Galliford said it starts the new financial year with productivity close to normal and operating margins expecting to improve in line with its target.
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OTHER MAIN MARKET AND AIM - LOSERS
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ASOS, down 1.8%. The online fashion retailer reported "steady" sales growth and added that it expects full-year profit at the upper range of market forecasts. In the four months to June 30, revenue rose 10% to GBP1.01 billion from GBP919.8 million in the year prior. In the ten months to June 30, revenue jumped 17% to GBP2.61 billion from GBP2.23 billion. UK retail sales during P3 fell 1.5% annually, though they surged 22% in the EU and 19% in the Rest of the World region. US sales nudged up 2.9%. Earlier on Wednesday, the Daily Telegraph reported that ASOS dropped a slew of suppliers after unearthing health, safety and human rights threats. According to the newspaper, a leaked 2018 report stated that ASOS inspectors had found a series of breaches at roughly a quarter of its suppliers, include some sites in the UK. Last week, ASOS temporarily suspended its trading relationship with Boohoo brands after claims that the fast-fashion retailer sold clothes made in factories where staff were paid less than the minimum wage and worked in poor conditions that had no social distancing measures.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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