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(Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Wednesday.
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FTSE 100 - WINNERS
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Next, up 7.3%. The clothing retailer said its second-quarter sales were "much better than expected" but still a far cry from last year's second quarter results. Next said its online warehouse picking and dispatch capacity returned to normal levels quicker than expected and UK and Ireland stores are now open for business. As a result, full price sales including interest income for the second quarter ended July 25 were were "significantly" ahead of expectations, down 28% compared to the year prior. Online sales were up 9%, while retail store sales were down 32% on a like-for-like basis. In the first half as a whole, sales were down 33% on a year before, with online sales down 11% and retail store sales down 62%. Next expects full-year pretax profit to be GBP195 million, following the central scenario. This is a stark contrast to the GBP734 million expected in pretax profit in January earlier this year and the GBP748.5 million recorded in financial 2020. "The reaction to these numbers is one of some relief. The better-than-expected trading performance of late has been boosted by Next's own proactive and decisive actions with the result that some of the share price damage has been undone. As a result of today's spike, the shares now stand equal with the level of a year ago," said Richard Hunter, head of markets at Interactive Investor.
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Smurfit Kappa, up 5.8%. The packaging firm resumed dividend payments and hailed its "strong" interim performance, despite posting an earnings fall. In the six months to June 30, revenue fell 9.1% to EUR4.20 billion from EUR4.62 billion in the year prior. "This result reflects the negative impact of Covid-19 on demand, the adverse impact of currency, and the fall in box prices," the Dublin-based company. Pretax profit fell 16% to EUR383 million from EUR456 million. Smurfit proposed an interim dividend of 80.9 cents per share, more than double the 27.9 cents it paid a year ago and equal to the 2019 final dividend it had pulled due to the virus crisis.
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FTSE 100 - LOSERS
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Taylor Wimpey, down 7.6%. The housebuilder swung to a loss in the first half of its current financial year as its income plummeted but said it remains confident on its outlook and expects to restore dividend payments. For the six months to June 28, Taylor Wimpey posted revenue of GBP754.6 million, down 56% year-on-year from GBP1.73 billion. Pretax loss was GBP39.8 million, swung from a profit of GBP299.8 million a year prior. The deterioration in its performance was blamed on the closing of construction sites and sales centres from March 23 for the Covid-19 lockdown in the UK. The first half net private sales rate of 0.70 homes per outlet per week was down on 1.00 a year ago. The sales rate was 0.97 prior to the UK's Covid-19 shutdown, when it then reduced to 0.30. In the nine weeks since sales centres reopened in England, the sales rate has increased to 0.70.
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Barclays, down 4.4%. The lender reported a sharp drop in interim profit, as the lender was forced to up its credit impairment charges dramatically to deal the fallout of the Covid-19 pandemic. For the six months to June 30, Barclays pretax profit dropped 58% year on year to GBP1.27 billion from GBP3.01 billion. Total income improved 8% to GBP11.62 billion from GBP10.79 billion, but Barclays was forced to up its credit impairment charges to GBP3.74 billion from GBP928 million the year before. Barclays said the provision increase was largely due to "revised IFRS 9 scenarios" driven by Covid-19. The scenarios reflect "forecast deterioration in macroeconomic variables including a prolonged period of heightened UK and US unemployment, partially offset by the estimated impact of central bank, government and other support measures".
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Smith & Nephew, up 3.8%. The medical technology firm suffered a swing to loss in the first half of its current financial year but said it has started to see an improvement in its performance during the second quarter as lockdown restrictions have eased. Revenue for the six months ended June 27 was down 18% to USD2.04 billion - falling 30% to USD901 million in the second quarter - with the company swinging to an interim pretax loss of USD34 million from a profit of USD383 million a year ago. Profit margin, at 8.5%, was down significantly on 21.4% a year ago, as previously guided. "The trading profit margin reflected a number of Covid-related factors, including negative leverage effect from the fixed components of our cost base and the impact of reduced production volumes, as well as additional charges of approximately USD50 million to provisions for inventory excess and obsolescence and trade receivables," the company said.
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FTSE 250 - WINNERS
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Aston Martin, up 6.4%. The luxury car maker's revenue plummeted and loss widened sharply during a six months which the auto firm described as "intense and challenging". The company did, however, paint an optimistic picture about its future, hailing its new executive team and looking ahead to 2021 when it will have a "competitive" Formula One racing team offering its brand more exposure. Revenue in the six months to June 30 fell 64% annually to GBP146.0 million from GBP406.0 million and its pretax loss stretched to GBP227.4 million from GBP80.0 million. Total retail sales slumped 41% year-on-year to 1,770 cars. The second quarter was hit the worst, falling 48%, after a 31% slump in the first. There are encouraging signs from China however, where retail sales were up 11% year-on-year during the month of June.
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FTSE 250 - LOSERS
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Network International, down 8.8%. The payments solutions provider said it has raised GBP205 million via a share placing to fund the acquisition of DPO Group for USD288 million. The placing price of 410 pence represented a discount of 8.9% to Wednesday's closing price.
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By Lucy Heming;Â lucyheming@alliancenews.com
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