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(Alliance News) - Stock prices in London opened lower on Friday as the fourth quarter got under way, while AO World sank after warning growth was set to slow.
The FTSE 100 index was down 61.16 points, or 0.8%, at 7,025.26. The mid-cap FTSE 250 index was down 231.37 points, or 1.0%, at 22,799.92. The AIM All-Share index was down 6.26 points, or 0.5%, at 1,237.56.
The Cboe UK 100 index was down 1.1% at 697.40. The Cboe 250 was down 1.5% at 20,620.30. The Cboe Small Companies was 0.2% lower at 15,879.80.
In mainland Europe, the CAC 40 stock index in Paris was down 1.2% and the DAX 40 index in Frankfurt was down 1.1%.
In the FTSE 100, National Grid was among a handful of stocks in the green, up 0.4%. The power lines operator said a 450-mile subsea power cable linking the UK and Norway has started commercial operations, allowing the two countries to share renewable energy.
Water flowing from mountains to fjords and harnessed by hydropower stations in Norway will power British homes, as the world's longest 'interconnector' hooks up the two countries' grids.
The cable will also allow excess wind power from Britain, when turbines are producing high levels of electricity in windy conditions - although demand is low - to be exported to Norway to power homes there.
National Grid said it would help avoid 23 million tonnes of carbon emissions by 2030. When it is at full capacity, it will provide enough clean electricity to power 1.4 million homes, the company added.
In the FTSE 250, Euromoney Institutional Investor was the best performer, up 3.5%. The events and financial information company said it performed better than forecast in its most recently ended financial year.
Euromoney said it expects its adjusted pretax profit for the full year ending September 30 to be significantly ahead of analysts' expectations. This reflects continuing strong growth in subscriptions in Pricing, Data & Market Intelligence, especially People Intelligence, and the continuing turnaround in Asset Management.
The company said it continued to build momentum in its most recent financial year, underpinned by the strength of its subscriptions performance, as the timing of the recovery in physical events remains uncertain.
Other revenue, which includes research and thought leadership, continued to perform strongly.
At the other end of the midcaps, AO World was the worst performer, down 18%, after the electrical goods retailer - a winner from the virus pandemic - warned online appliance sales growth now is slowing in the UK and Germany.
Adjusted earnings before interest, tax, depreciation and amortisation in the 2022 financial year, which ends March 31, are expected to be between GBP35 million and GBP50 million, AO said in a trading update. That's down from GBP64 million in financial 2021.
In the first half, revenue was up 5%. The UK saw 6% growth and Germany saw revenue in euros grew 3%, "despite the competitive online market". AO expects a similar rate of growth in the second half. The challenging market in both countries "resulted in lower volumes than expected which affected operational leverage, particularly in the second quarter," the Bolton, England-based company said.
"We see the UK shortfall as fairly understandable, given well-known challenges around driver shortages, global supply chains, and the difficulties of predicting growth against demanding comparatives. The situation in Germany, however, is going to require deeper consideration - just as the model had appeared to be fixed, a new layer of competitive challenge seems to have emerged. Once again, AO has questions to answer regarding its international growth aspirations," said Jefferies analyst Andrew Wade.
Rival electrical appliance retailer Currys was down 9.0% in a negative read-across.
JD Wetherspoon was down 2.2% after the pun chain reported a drop in annual earnings as it continued to hit out at the UK government's decision to impose lockdown restrictions and the detrimental effects that has had on the industry.
For the financial year that ended July 25, the Watford-based pub and hotel operator reported revenue down 39% to GBP772.6 million from GBP1.26 billion the year ago. Like-for-like sales fell 38%, bar sales decreased by 42% and food sales by 37%.
Pretax loss before exceptional items widened to GPB167.2 million from GBP44.7 million, while pretax loss post exceptional items was GBP194.6 million compared to GBP105.4 million in financial 2020.
"Pubs have been at the forefront of business closures during the pandemic, at great cost to the industry - but at even greater cost to the Treasury. In spite of these obstacles, Wetherspoons is cautiously optimistic about the outcome for the financial year, on the basis that there is no further resort to lockdowns or onerous restrictions," said Chair Tim Martin.
Shares in FTSE 250-listed Gamesys were delisted on Friday following the bingo and casino games operator's takeover by Ballys Corp. The company was replaced by Tritax Eurobox. Shares in the logistics real estate assets manager were 0.5% lower.
The Japanese Nikkei 225 index closed down 2.3%. Financial markets in Shanghai and Hong Kong were closed for the National Day holiday. The S&P/ASX 200 in Sydney closed down 2.0%.
The pound was quoted at USD1.3448 early Friday, down from USD1.3495 at the London equities close Thursday.
The euro was priced at USD1.1579, lower against USD1.1584. Against the yen, the dollar was trading at JPY111.20, down from JPY111.50.
Brent oil was quoted at USD78.29 a barrel Friday morning, down from USD78.50 late Thursday. Gold stood at USD1,754.82 an ounce, lower against USD1,760.78.
Friday's economic calendar has eurozone inflation at 1000 BST and manufacturing PMIs from the UK at 0930 BST and the US at 1445 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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