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(Alliance News) - Stock prices in London opened lower on Thursday ahead of a slew of services PMIs from the UK and continent, while B&M European Value Retail and ex-dividend shares were weighing on the FTSE 100.
The FTSE 100 index was down 29.79 points, or 0.4%, at 7,077.82. The mid-cap FTSE 250 index was down 27.26 points, or 0.1%, at 22,906.03. The AIM All-Share index was flat at 1,255.02.
The Cboe UK 100 index was down 0.3% at 70.70. The Cboe 250 was down 0.2% at 20,666.76, and the Cboe Small Companies was flat at 15,233.25.
In Paris the CAC 40 was down 0.1%, while the DAX 30 in Frankfurt was down 0.2%.
In the FTSE 100, Johnson Matthey was the best performer, up 2.0% at 3,132.00 pence, after Jefferies raised its price target on the speciality chemicals firm to 4,200p from 4,100p and reiterated its Buy rating.
Informa was up 0.9% after the business publisher and exhibitions firm said that, following the release of its annual results in April, it has continued to trade in line with expectations.
Informa said it remains on track to deliver the baseline revenue target for the year of at least GBP1.7 billion, as well as remaining cashflow positive, supported by improving underlying revenue growth in its two subscriptions-led businesses.
At the other end of the large-caps, National Grid and Kingfisher were the worst performers, down 4.2% and 3.9% respectively, after the stocks went ex-dividend meaning new buyers no longer qualify for the latest payout.
B&M European Value Retail was 3.1% lower after the discount store chain flagged an uncertain outlook as the Covid-19 pandemic subsides, as it reported stellar annual results.
In the UK, the Luxembourg-based company was allowed to trade through lockdowns as it was classified as an essential retailer.
For the financial year ended March 27, revenue was up 26% to GBP4.80 billion from GBP3.81 billion the year before and pretax profit more-than-doubled to GBP525.4 million from GBP252.0 million.
In addition, adjusted earnings before interest, tax, depreciation and amortisation increased by 83% to GBP626.4 million from GBP342.3 million. In March, B&M had guided for adjusted Ebitda to be in the range of GBP590 million to GBP620 million.
The company said the B&M UK business experienced very strong sales in the last month of the financial year, with the final week being the strongest in its history which led to the Ebitda outperformance. Like-for-like revenue growth picked up from 23.0% in the first half of the year to 24.5% in the second half.
B&M declared a total dividend of 17.3 pence, more-than-doubled from the 8.1p paid out the year before. The ordinary dividend was slightly above expectations and was in addition to GBP450 million special dividends paid in financial 2021.
Chief Executive Officer Simon Arora said: "Looking ahead, there are many uncertainties as society slowly emerges from lockdown and trading patterns are likely to be unpredictable for much of the year."
BT was down 2.5% after Deutsche Bank downgraded the telecommunications firm to Sell from Hold.
In the FTSE 250, Pennon Group was up 2.5% after the Exeter-based water utility Pennon Group rewarded shareholders with a special payout as it acquired its neighbour, Bristol Water.
Pennon also announced plans for a share buyback and a share consolidation, as it reported annual results. For the financial year to March 31, the utility posted revenue of GBP644.6 million, up 1.2% from GBP636.7 million the year before, but pretax profit was GBP132.1 million, down 32% from GBP193.1 million.
In addition, Pennon said it has acquired Bristol Water Holdings for an equity value of GBP425 million and enterprise value of GBP814 million from iCon Infrastructure and Itochu. Pennon also announced a return of capital to shareholders, consisting of a special dividend of GBP1.5 billion - representing 355p per share - and a share buy-back programme of up to GBP0.4 billion.
As part of the special dividend, Pennon intends to consolidate its share capital on the basis of two new shares for every three existing shares. Pennon declared a final dividend 14.97p, leading to an annual dividend of 21.74p, down from 43.77p.
Pennon said the special dividend equates to GBP3.55 per share after the share consolidation, while the final dividend will equate to 22.46p and the full-year dividend 32.61p.
Pennon also said it expects to increase its dividend base by 2.00p per share in financial 2022 to recognise the earnings accretion of the Bristol Water acquisition.
The Japanese Nikkei 225 index closed up 0.4%. In China, the Shanghai Composite ended up 0.5%, while the Hang Seng index in Hong Kong was down 0.4%. The S&P/ASX 200 in Sydney finished 0.6% higher.
The Chinese services sector saw softer expansion in May as it continued its trend of growth for the thirteenth consecutive month, data from IHS Markit showed.
The headline seasonally adjusted general services purchasing managers' index for China slipped to 55.1 points in May from April's four-month high of 56.3, but remained firmly above the neutral 50.0 level to signal a marked increase in activity. The reading has stayed above the 50.0 point mark for 13 consecutive months now.
Faring much worse, the Japanese services sector contracted sharply in May as tighter restrictions weighed on output and demand, according to survey results reported by IHS Markit. The seasonally adjusted Japan services business activity index fell sharply to 46.5 in May, from 49.5 in April.
The au Jibun Bank Japan composite purchasing managers' index - which measures combined output in the manufacturing and service sectors – fell to 48.8 in May from 51.0 in April, highlighting a renewed fall in private sector output. The decline was marginal, yet the quickest since February, Markit noted.
Still in the economic calendar on Thursday are services PMIs from Germany, the eurozone, UK and US at 0855 BST, 0900 BST, 0930 BST and 1445 BST respectively. Also due in the US are ADP's job report at 1315 BST and jobless claims at 1330 BST.
The dollar was higher against major counterparts early Thursday. The pound was quoted at USD1.4153, down from USD1.4182 at the London equities close Wednesday.
The euro was priced at USD1.2185, down from USD1.2214. Against the yen, the dollar rose to JPY109.78 from JPY109.61.
Brent oil was quoted at USD71.57 a barrel early Thursday, up from USD70.96 late Wednesday in London. Gold stood at USD1,895.77 an ounce, lower from USD1,904.77.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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