(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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BT Group, up 5.7%. The telecommunications firm said it delivered interim results in-line with expectations and raised earnings guidance. For the half-year ended September 30, revenue fell 7.6% to GBP10.59 billion, from GBP11.47 billion last year, and pretax profit declined 20% to GBP1.06 billion from GBP1.33 billion. BT said it was firmly on track with the delivery of its modernisation programme and delivered GBP352 million in cost savings during the first half of the year. BT raised the lower end of its earnings before interest tax, depreciation, and amortisation outlook range for the current year, financial 2021, to GBP7.3 billion for a revised range of between GBP7.3 billion and GBP7.5 billion. "The key part of BT's half-year report is, ironically, not how it has performed over the past six months, but how it views near-term conditions. And it's here that shareholders have some cause for optimism. The group is forecasting GBP7.9 billion EBITDA by 2022/23, which would return it to pre-Covid levels within two to three years, and the reinstatement of its dividend next year," said eToro analyst Adam Vettese.
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Lloyds Banking Group, up 4.0%. The high street bank reported a sharp rise in profit in the third quarter, as it did not have any payment protection insurance claims to cover. In the three months to September 30, Lloyds' pretax profit surged to GBP1.04 billion from just GBP50 million a year before. Lloyds noted it put aside GBP1.80 billion in the third quarter last year to cover a sharp rise in payment protection insurance claims - which was not repeated in the third quarter of 2020 as the deadline for claims has passed. Lloyds said its mortgage activity is "picking up strongly" and its increase in retail current accounts is ahead of the market. Lloyds said the strength of its mortgage business will offset the yield curve pressure the bank is facing from lower interest rates.
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Royal Dutch Shell 'B', up 2.0%, Shell 'A', up 1.9%. The oil major announced a new cash allocation framework which it said will enable the oil company to reduce debt, increase distributions to shareholders, and allow for disciplined growth. Increased shareholder distributions will be achieved through a combination of Shell's progressive dividend and share buybacks. Remaining cash will be allocated to "disciplined and measured" capital expenditure growth and further debt reduction, it added Shell declared a third quarter dividend of 16.65 US cents, down 65% from USD0.47 paid out in the third quarter last year. However, it was up 4.0% from the 16.00 cents paid for the second quarter, and Shell confirmed on Thursday it will grow the dividend annually as part of its progressive dividend policy. "The modest rise and an accompanying blueprint for future growth in the dividend is at least a gesture to shareholders that their need for income won't be completely forgotten as the company looks to continue its transition to a post fossil fuels future," noted AJ Bell's Russ Mould.
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FTSE 100 - LOSERS
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Rolls-Royce, down 5.5%. The jet engine maker was suffering a negative read-across after European aircraft maker Airbus said the global air travel recovery has been slower than anticipated and swung to a net loss for the third quarter of 2020. For the three months to September 30, Airbus recorded a net loss of EUR767 million compared with EUR989 million profit recorded a year ago. Revenue for the quarter dived 27% to EUR11.21 billion from EUR15.30 billion. The sharp fall in revenue was attributed to a difficult market environment in commercial aircraft due to Covid-19, with around 40% fewer deliveries year-on-year. A total of 341 commercial aircraft were delivered in the first nine months of 2020, down from 571 aircraft a year before. Airbus shares were down 1.0% in Paris.
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Standard Chartered, down 4.7%. The Asia-focused bank reported a sharp drop in third-quarter profit but believes its ongoing transformation will allow the bank to weather the pandemic in "good shape". In the three months to September 30, StanChart recorded pretax profit of USD435 million, down 61% year on year from USD1.11 billion. The lender booked a USD358 million credit impairment in the third quarter, up from USD280 million a year before, but noted it is down from the USD611 million credit charge taken in the second quarter. Operating income dipped 11% to USD3.51 billion from USD3.96 billion, as net interest income declined 16% to USD1.62 billion from USD1.94 billion.
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FTSE 250 - WINNERS
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Diversified Gas & Oil, up 2.8%. The oil and gas company posted increased profit and output for the third quarter of 2020 and said that it has safely operated its assets essentially with no impact from Covid-19. The Birmingham, Alabama-based producer reported adjusted earnings before interest, tax, depreciation and amortisation of USD75 million for the three months to September 30, up 17% from USD64 million a year ago. Second quarter adjusted Ebitda amounted to USD68 million. Margins were flat quarter-on-quarter at 52% for the third quarter, but up from 51% a year ago. Diversified Gas declared a third quarter dividend of 4.0 US cents per share, up 6.7% on 3.75 cents payout in the second quarter and 14% from 3.50 cents a year ago.
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OTHER MAIN MARKET AND AIM - WINNERS
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Alfa Financial Software Holdings, up 6.6%. The financial software provider said it has signed two new contracts and been awarded a five-year extension to an existing contract. The two new contracts are for an unnamed US auto finance customer and for a US retail bank that is providing equipment finance in its home market. The first contract is considered top tier in value by the financial software provider, while the second ranks in the middle tier. Trading for the third quarter to the end of September was "good", Alfa said, with revenue at GBP16 million. This was in line with the prior year, but down from the run-rate for the interim period due to an increase in holidays taken by employees. As a result of this, as well as the new contracts and extension, Alfa expects earnings before interest and tax for 2020 to exceed 2019, when Ebit came in at GBP13.7 million.
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OTHER MAIN MARKET AND AIM - LOSERS
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Foxtons, down 5.0%. The estate agent said economic uncertainty is causing more sales transactions to fall through and is putting downward pressure on rents. The London-focused company said it made good progress in the third quarter by capitalising on increased levels of market activity, but it remains cautious for the future. For the three months to September 30, the company's revenue fell 10% year-on-year to GBP28.5 million from GBP31.7 million. Year-to-date revenue fell 18% to GBP68.9 million. The Lettings business saw a 8% drop in quarterly revenue to GBP19.5 million due to a decline in average revenue per tenancy and a significant reduction in the number of overseas student tenants and corporate relocations. Sales revenue for the quarter was down 18% to GBP6.9 million due to depressed levels of exchanges, a hangover from the Covid-19 lockdown in the UK in the spring.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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