(Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Friday.
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BANKS
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Shares in UK-focused lenders such as RBS, Barclays, and Lloyds all surged on Friday morning following the Conservative party's resounding victory in the UK general election. RBS rose 11%, Barclays by 7.8%, and Lloyds by 6.5% in morning trade. Prime Minister Boris Johnson can now go ahead with securing the UK's exit from the EU, which, it is hoped, will provide a boost to the UK economy given the uncertainty over how the UK will leave the bloc should end, which in turn is good for the banks. Standard Chartered was down 0.3%, however, while HSBC rose just 0.3%. Both HSBC and StanChart make the majority of their earnings overseas, meaning the rise in the pound following the Conservative victory will provide a hindrance.
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HOUSEBUILDERS
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Shares in the UK's housebuilders rose following the Tory victory, again on expectations of improved UK economic conditions once the fog over the UK's exit from the EU lifts. In the FTSE 100, Taylor Wimpey was 15% higher, Berkeley up 12%, Barratt also 12% higher, and Persimmon up 11%. Midcap peers Bellway and Bovis Homes rose 11% and 8.7% respectively, with Countryside Properties up 8.1% and Crest Nicholson rising 9.4%. Analysts at Peel Hunt commented: "It's difficult not to see the election result as a healthy boost for the whole UK building sector. Stalled commercial projects should now get going, while more clarity on Brexit should give consumers a bit more confidence to be more active in the housing market, as well as get going on some renovation projects. We suspect the new housing market will be the first to see the benefits, with a pick-up in volumes and house prices as the traditional spring season gets off to an early start. Tax and spend changes in the likely February budget should provide some further good news for the sector."
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UTILITIES
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Stocks following the Conservative win, as Jeremy Corbyn's Labour party had promised to renationalise the sector if it had taken control at Westminster. SSE climbed 9.6% and British Gas-owner Centrica by 7.7%, while water companies United Utilities and Severn Trent climbed 8.6% and 7.8% respectively. In the FTSE 250 Pennon Group, which owns South West Water, was up 8.1%.
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TRANSPORT
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Transport was another sector which had been targeted by Labour for nationalisation. Following the Tory win, Stagecoach rose 13% and Go-Ahead Group 11%, and FirstGroup 7.5%.
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BT Group, up 7.5%. In November, the Labour party announced plans to bring parts of the company into public ownership, including Openreach, which runs the UK broadband network. This threat has now been extinguished.
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OTHER MAIN MARKET AND AIM - WINNERS
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Hurricane Energy, up 8.5%. The oil producer has made changes to its work programme after getting a licence extension. The company has obtained an extension for the P1368 licence, which is to the west of the Shetland Islands and contains the Lancaster and Lincoln oil fields. In 2019, Hurricane is guiding for total production of 3.1 million barrels of oil, equivalent to an average rate of 13,300 barrels per day. Revenue is likely to be around USD165 million. The average production rate guidance for Lancaster in 2020 has been maintained at 20,000 barrels of oil per day, before operational downtime, though this will be reviewed under Hurricane's current testing programme.
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Hollywood Bowl, up 4.7%. The company upped its dividend and reported an earnings rise during a year in which it opened one of the largest ten-pin bowling centres in the UK. In the year to September 30, revenue rose 7.8% to a record GBP129.9 million from GBP120.5 million last year. On a like-for-like basis, revenue was up 5.5%. Pretax profit climbed 15% year-on-year to GBP27.6 million from GBO23.9 million. The ten-pin bowling operator's total dividend for the year was 11.93 pence per share, up 13% from 10.59p last year. This was after the firm paid a special dividend, for the third successive year, of 4.5p, up 3.9% from 4.33p.
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OTHER MAIN MARKET AND AIM - LOSERS
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Nakama, down 30%. The firm said Friday it needs more capital amid challenges in both the UK and Hong Kong. For the six months ended September 30, the recruitment consultancy firm posted revenue of GBP4.8 million compared to GBP8.0 million in a comparative period a year ago. Profit before tax reduced to GBP20,000 compared to GBP186,000 a year before. The company warned of challenges ahead due to its tight cash position, caused primarily by payment collection issues in Hong Kong. Nakama requires an injection of capital to implement short-term growth plans, and it is now considering a number of restructuring options to improve its cash position.
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Amiad Water Systems, down 11%. The firm issued a profit warning as a lack of investment halted projects and hurt revenue while margins were squeezed. While Amiad entered the second half of 2019 with a higher order book and larger sales pipeline than it had the year before, a number of projects were called off over a lack of capital investment, meaning annual revenue will now be "slightly below market expectations". Lower second half sales also meant it could not offset the damage done by lower-margin projects completed in the first half, resulting in a gross margin squeeze.
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By George Collard; georgecollard@alliancenews.com
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