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(Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Thursday.
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FTSE 100 - WINNERS
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Centrica, up 8.4%. The British Gas owner backed annual guidance after what it said has been a "solid" second-half performance. The utility firm delivered growth in customer accounts, higher margins, and returns in business energy supply in North America, it said, as well as strong trading in Europe. This has helped offset the impact of further outages at the non-operated Dungeness B and Hunterston B nuclear power stations, in Kent and North Ayrshire respectively. Nuclear operations were put up for sale earlier this year. Centrica did say it has also booked lower European wholesale gas prices, but noted the impact of Exploration & Production earnings will be mitigated, mostly, by forward hedging. Chief Executive Iain Conn said the period was "exceptionally challenging", though he did express a more confident outlook for the second half. Conn will be leaving in 2020. Centrica backed 2019 guidance of adjusted operating cash flow at the lower end of GBP1.8 billion to GBP2.0 billion, and net debt within GBP3.0 billion to GBP3.5 billion. The firm has cut capital investment guidance to GBP800 million from GBP900 million, and increased efficiency savings for the year to GBP300 million from GBP250 million.
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FTSE 100 - LOSERS
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Johnson Matthey, down 7.2%. The specialty chemical firm was lower after it said interim profit was hit by problems in its Clean Air division. Pretax profit fell 8% to GBP225 million for the half-year to September, and the underlying figure also declined by 8% to GBP231 million. The specialty chemicals firm said profit was hit by around GBP15 million of one-off costs in the Clean Air division due to higher freight costs and manufacturing inefficiencies. This, Johnson Matthey continued, stemmed from the phasing of the completion of a new plant in Poland. The company's revenue rose 37% to GBP6.82 billion due to higher precious metal prices. Excluding this, sales climbed 6%, or 3% at constant currency, to GBP2.12 billion. Johnson Matthey has increased its interim shareholder return by 5% to 24.50 pence per share. Looking ahead, Johnson Matthey expects full-year performance to meet the market's expectations.
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Severn Trent, down 2.0%. The water utility firm's interim profit dropped on higher investment costs and lower gains from property disposals but was able to up its interim payout. For the six months to the end of September, the FTSE 100 water utility firm posted a reported pretax profit of GBP180.7 million, down 11% from GBP203.6 million the year before. Profit before interest, taxes and exceptional items was also down, falling by 4.3% to GBP285.3 million from GBP299.1 million. Severn Trent's profit performance was hit by weaker results from its Regulated Water & Waste Water segment, due mainly to higher costs from infrastructure renewals, as well as lower gains from the sale of properties at GBP6.2 million, compared to GBP18.4 million the prior year. Revenue however, grew by 3.2% year-on-year to GBP910.0 million from GBP881.5 million, which was attributed to tariff increases, including the effect of the retail price index increase on prices. Severn Trent declared a dividend of 40.03 pence, up 7.2% from 37.35p the year before. Looking ahead, Severn Trent said it expects revenue from its Regulated Water & Waste Water division for its current financial year ending March 2020 in the range of GBP1.61 billion to GBP1.64 billion, representing a 1.9% to 3.8% increase from GBP1.58 billion the year before. Meanwhile, the Business Services segment is set to report an increase in underlying profit before interest and taxes, from GBP44 million the year before. The group anticipates declaring an annual dividend of 100.08 pence per share, a 7.2% increase from 93.37p.
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FTSE 250 - WINNERS
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William Hill, up 1.7%. The bookmaker said performance has met expectations as revenue from retail stores continues to fall. The bookmaker posted a 1% rise in net revenue for the period between July 3 and October 29, with online revenue rising 26% but retail falling 23%. Gaming net revenue from retail stores slumped 45%, and sportsbook wagering amounts fell 1%. Gaming revenue online was up 51%, but sportsbook wager amounts fell 7%. "Gaming trends are improving incrementally as customer behaviour adjusts following the implementation of the GBP2 maximum staking limit," said William Hill. In April this year, the stake limit on in-store fixed-odds betting terminals was slashed by the UK government to GBP2 from GBP100, leading to bookmakers warning on a steep fall in revenue. This prompted William Hill in July to announce 700 store closures. Elsewhere, in the US the company reported "strong" net revenue growth of 60%. New operations have opened in several US states as they legalise online sports gambling, while the existing Nevada business remains solid.
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FTSE 250 - LOSERS
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Royal Mail, down 17%. The letter and parcel carrier reported a significant rise in interim profit, but warned its transformation is off track. Royal Mail's pretax profit for the six months to September 29 multiplied to GBP173 million from GBP33 million, though the adjusted figure was down 20% to GBP146 million. Revenue climbed by 5.2% to GBP5.17 billion. The firm said revenue growth came from higher parcel revenue in the General Logistics Systems and UK Parcels, International & Letter segments, more than offsetting a decline in revenue from letters. Royal Mail has cut the interim dividend to 7.5 pence from 8.0p, which is said was in line with a new dividend policy outlined in May. "Our profitability performance is in line with our expectations for the half year, despite considerable UK economic and political uncertainty," said Chief Executive Rico Back. However, Back warned the outlook for the letters business in the UK remains challenging, due to lower-than-expected UK economic growth and business uncertainty. For its current financial year, Royal Mail sees a 7% to 9% fall in addressed letter volumes, excluding the upcoming UK general election, which brings a surge of political mailings. Next year, volumes could fall between 6% to 8%. "Our transformation is behind schedule. We are investing more because of the industrial relations environment, the general election and Christmas, to underpin our quality of service at this key time," the CEO warned.
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Rotork, down 4.6%. The valve-maker expects to deliver "modestly lower" year-on-year sales in 2019 as a "slightly greater than usual" proportion of recent orders will not be delivered until next year. In a trading update for the four months to October 27, the company said the expected lower sales reflect "order phasing, portfolio and product rationalization and the impact on the prior year from delivery of several significant projects and sales to countries subsequently placed under sanction." The company said order intake showed improvement compared to the third quarter in 2018, but large project activity remained subdued. The company said it expects adjusted operating profit for 2019 to be in line with management expectations on an organic constant currency basis. In 2018, reported adjusted operating profit of GBP146.0 million.
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NewRiver REIT, down 3.3%. The firm kept its interim dividend in line with the year before as it swung to a loss amid a fall in the value of its property portfolio. The real estate investment trust - which is focused on retail and leisure properties - said for the six months to the end of September it made a pretax loss of GBP20.9 million, compared to a profit of GBP3.2 million the year before. This was mainly due to a widened loss on the revaluation of its investment properties at GBP40.4 million from GBP24.7 million. However, revenue increased by 4.2% to GBP70.0 million from GBP67.1 million, as net property income rose by 6.5% to GBP45.7 million from GBP42.9 million the prior year. As at September 30, NewRiver REIT's net asset value was 244 pence per share, down 14% from 283p the same date the year before, and down 6.5% from 261p at the end of March. The trust's portfolio value at the end of September stood at GBP1.26 billion, down 8.0% from GBP1.37 billion the same date the prior year, and 3.1% from GBP1.30 billion at the end of March. Despite the value decline, the portfolio still outperformed the MSCI-IPD benchmark, delivering a positive total return of 0.3%, compared to the MSCI-IPD's negative return of 2.8%. NewRiver REIT declared an interim dividend of 10.8 pence per share, in-line with the year before.
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Senior, down 2.8%. Peel Hunt cut the aerospace component manufacturer to Hold from Buy.
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CLS Holdings, down 2.5%. The property investor expects to report annual results in line with expectations, as the group continues to actively manage its portfolio for growth opportunities. During the second half to date, CLS made four acquisitions for a total consideration of GBP109.2 million with a blended net initial yield of 6.1%. CLS Holdings completed four disposals within the period, for GBP91.7 million in total, but realising net GBP70 million following the repayment of associated debt. Post-period, CLS is expected to sell two more properties for GBP25 million, which are due to be completed before the end of 2019. As a result of the transactions, CLS's vacancy rate increased to 4.6% as at October 31 from 4.2% as at June 30; however the group noted that it remained below its targeted vacancy rate of 5%.
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OTHER MAIN MARKET AND AIM - WINNERS
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Blue Prism, up 32%. The robotic software firm said a "significant acceleration" in sales in the second half of the year contributed to a "very strong" full-year performance. In a trading update for the financial year ended October 31, the company said it now expects its revenue to be "at least" GBP98.0 million, compared to GBP55.2 million in 2018. Blue Prism said sales volumes continued to be high in 2019 and increased deal sizes have driven material additions in the total business generated in the year. "As a result, the group enters 2020 with a record order book," the company said. Blue Prism said its total customer base at the end of financial year 2019 was 1,667, an 69% increase compared to 2018, "providing a substantially increased base for the group to upsell into in future periods." The company said its total business over the period was GBP181 million, compared to GBP143.0 million in financial 2018. Blue Prism defines total business as the total contract value from new customers, upsells and renewals.
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Charles Stanley, up 18%. The asset manager said its first half was "encouraging" and expects further progress in the second half. At September 30, Charles Stanley's funds under management & administration stood at GBP24.6 billion, up 2.1% since March 31. The firm's discretionary funds grew 6.0% over the same period to GBP13.9 billion. Charles Stanley said it saw a "much-improved" financial performance in the first half. Revenue increased 9.9% year on year to GBP85.4 million, with growth in the firm's three divisions. Revenue margin improved to 69.9% from 62.7% the year before. Charles Stanley attributed this to is continued efforts to shift towards higher margin products - such as discretionary funds - as part of an internal restructure. Pretax profit grew 59% to GBP8.1 million. The firm upped its interim dividend by 9.1% to 3.0 pence.
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By Paul McGowan; paulmcgowan@alliancenews.com
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