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(Alliance News) - Stock prices in London were mostly lower at midday on Thursday as a rally fuelled by cooling US inflation lost steam, while Walt Disney shares surged in New York after posting huge subscriber growth.
The FTSE 100 index was down 26.58 points, or 0.3% at 7,480.53. The mid-cap FTSE 250 index was down 36.81 points, or 0.2%, at 20,261.19. The AIM All-Share index was up 6.35 points, or 0.7%, at 926.13.
The Cboe UK 100 index was down 0.4% at 747.37. The Cboe 250 was down 0.2% at 17,602.65. The Cboe Small Companies was up 0.1% at 14,359.20.
In Paris, the CAC 40 stock index was down 0.2%, while in Frankfurt, the DAX 40 was 0.1% lower.
In the FTSE 100, Entain was the best performer, up 7.3%, after the gambling firm left annual guidance unchanged and declared a dividend for the first time since the onset of Covid-19, with the bookmaker promising a "progressive" payout going forward.
It has also announced the acquisition of a gaming and sportsbook operator in Croatia through a newly established joint venture.
The Ladbrokes and Coral owner posted revenue of GBP2.09 billion for the six months ended June 30, up 19% year-on-year from GBP1.77 billion. Underlying earnings before interest, tax, depreciation and amortisation climbed 17% to GBP471 million from GBP401.1 million.
Pretax profit, however, tumbled by 70% to GBP39.5 million from GBP130.6 million. Entain's bottom-line was hit by a GBP55.0 million foreign exchange hit, swinging from a GBP77.1 million tailwind a year earlier.
Entain declared an interim dividend of 8.5 pence per share, its first payout since the onset of the pandemic.
Coca-Cola HBC was up 3.3%. The soft drinks bottler said its first half was "strong" despite a severe drop in profit, knocked back by the significant costs involved in exiting from Russia.
The bottling partner of Coca-Cola Co said net profit was down 34% at EUR152.9 million in the six months ended July 1 from EUR233.1 million a year before. Coca-Cola HBC noted it booked a EUR188 million non-cash charge in the first half due it restructuring its Russia business.
The company stopped taking orders in Russia in March, so seen volumes plunge 46% in the second quarter. It expects further declines in the second half. Coca-Cola HBC expects to incur further charges in the second half, currently estimated at EUR82 million.
At the other end of the large-caps, GSK consumer healthcare spin-off Haleon was the worst performer, down 12%, with Credit Suisse attributing this to fears about litigation over heartburn treatment Zantac.
GSK was down 9.5% - the second-biggest faller on Thursday. Haleon had lost 8.1% on Wednesday.
Ranitidine, sold under the name Zantac, was sold over-the-counter in the US by French drugmaker Sanofi and was originally manufactured by GSK.
The product was withdrawn after the US Food & Drug Administration, in 2019, warned that Zantac contained levels of NDMA, a probable human carcinogen - a substance which has been linked to cancer.
In late 2019, Sanofi recalled the over-the-counter treatment in the US and Canada over possible contamination fears. By April 2020, the FDA had ordered the drug and all its generics be withdrawn from drugstore shelves.
Sanofi shares were down 9.0% in Paris.
Credit Suisse analyst Faham Baig explained: "Haleon's negative share price reaction yesterday was a reflection of investor fear over potential negative monetary implications from Zantac lawsuits in the US, in our view. Since [its withdrawal], more than 2,000 cases have been filed in the US and the first trial begins on 22 August 2022, followed by the process of the multidistrict litigation beginning in September 2022 and the state bellwether trials in January 2023.
"The connection to Haleon likely relates to GSK and Pfizer's ownership (Haleon was the merger between GSK and Pfizer's Consumer Health businesses), but both companies sold on the rights (and liabilities) and the business Haleon acquired from Pfizer (in 2019) was part of the Wyeth transaction in 2009. In addition, Haleon's prospectus stresses that its indemnification to GSK and Pfizer 'may include liabilities related to OTC Zantac' and it has not taken any provisions."
Pfizer was down 1.4% in pre-market trade in New York.
Rio Tinto was down 3.5% after the mining stock went ex-dividend, meaning new buyers no longer qualify for the latest payout.
Antofagasta was down 1.6% after the copper miner slashed its interim dividend as lower copper prices and operational strife hit the Chilean company's first-half outturn.
For the six months to June 30, revenue dropped 30% to USD2.53 billion from USD3.59 billion a year before, due to lower copper and by-product sales volumes, and lower realised prices.
Pretax profit was down 62% to USD679.6 million from USD1.79 billion. Earnings before interest, tax, depreciation and amortisation fell 48% to USD1.24 billion from USD2.36 billion, reflecting "lower revenue and higher cost of sales which increased by 6.9%," the company explained.
Anto declared an interim dividend of 9.2 US cents, down 61% from 23.6 cents paid out last year. Looking ahead, it reiterated 2022 copper production is expected to land around 640,000 to 660,000 tonnes.
In the FTSE 250, Network International was the standout performer, up 17%, after the payment solutions provider reported strong interim results and launched a substantial share buyback programme.
In the first half of 2022, pretax profit doubled to USD37.3 million from USD17.0 million. Underlying net income was up 58% to USD34.3 million from USD21.8 million. Revenue jumped 31% to USD205.0 million from USD156.4 million. By geography, revenue in the Middle East was up 22%, while Africa revenue was up 56%.
Looking ahead, it reconfirmed its annual outlook. The firm expects annual revenue growth between 27% to 29%. In 2021, it recorded revenue of USD352.2 million.
In addition, the Dubai, UAE-based firm said it intends to commence a share buyback programme of up to an aggregate purchase price of USD100 million.
Harbour Energy was up 7.0% after Goldman Sachs started coverage on the North Sea-focused oil and gas firm with a 'buy' rating.
New York was pointed to a higher open, looking to build on Wednesday's strong rally.
The Dow Jones Industrial Average was called up 0.4%, the S&P 500 up 0.3% and the Nasdaq Composite up 0.2%. The indices had closed up 1.6%, up 2.1% and up 2.9% respectively on Wednesday.
Walt Disney shares were up 8.5% in pre-market trade after the entertainment company, late Wednesday, reported over 220 million streaming subscribers and increased quarterly profit.
Revenue in the third quarter, ended July 2, rose 26% year-on-year to USD21.50 billion from USD17.02 billion a year before. Revenue from Parks, Experiences & Products jumped 70% to USD7.39 billion, while Media & Entertainment Distribution notched 11% growth to USD14.11 billion.
The Dow constituent's net income from continuing operations for the quarter jumped 53% to USD1.41 billion from USD923 million, while diluted earnings per share rose 54% to USD0.77 from UUSD0.50.
Chief Executive Bob Chapek said streaming service Disney+ added 14.4 million subscribers in the quarter. This took total Disney+ subscribers to 152.1 million and total subscriptions across its all streaming offerings - which includes ESPN+ and Hulu - to 221 million.
The dollar was higher against rivals, clawing back ground after dropping in response to a lower-than-expected reading of inflation in the US.
The pound was quoted at USD1.2215 midday Thursday in London, down from USD1.2253 at the London equities close Wednesday.
The euro was priced at USD1.0340, down from USD1.0349. Against the Japanese yen, the dollar was trading at JPY132.60, up from JPY132.41.
US consumer price inflation was reported on Wednesday at 8.5% in July, slowing from 9.1% in June.
Brent oil was quoted at USD98.20 a barrel Thursday at midday, up sharply from USD94.77 late Wednesday. Gold stood at USD1,790.12 an ounce, lower against USD1,799.85.
The economic events calendar Thursday has US producer prices and jobless claims numbers at 1330 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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