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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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United Utilities, up 1.2%. The water firm said it anticipates lower year-on-year earnings for the first half of financial 2021, in line with expectations. United Utilities stated revenue for the six months ending September 30 is expected to be lower than the first half of last year, reflecting its allowed regulatory revenue changes and lower consumption from businesses as a result of Covid-19. However, it noted the negative impact was partly offset by higher consumption from households. Underlying operating profit is also expected to be down year-on-year due to lower revenue and an anticipated moderate increase in infrastructure renewals expenditure. Warrington-based United Utilities said cash collection from household customers has been consistent with targets set prior to Covid-19 pandemic. While it anticipates bad debt may increase as government support schemes come to an end, it has "confidence in the adequacy of the provision made" at the March 2020 year-end.
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FTSE 100 - LOSERS
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Smiths Group, down 6.3%. The defence and medical technology firm said revenue from continuing operations for the year to July 31 was up 2% to GBP2.55 billion, though down 1% on an underlying basis. Pretax profit more than halved to GBP133 million, however, from GBP304 million the year before. Smiths Group said profit was hit by lower volumes in the second half as well as additional costs to support business continuity, and the firm also took GBP31 million in restructuring costs and GBP24 million of write-downs. Smiths declared a final dividend of 24p a share and a delayed interim dividend of 11p, taking the total payout for financial 2020 to 35p, down 24% from 45.9p paid a year ago.
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FTSE 250 - WINNERS
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Pets at Home, up 22%. The pets good retailer reported continued sales momentum across the second quarter of its financial year, leading to confidence in annual profit being ahead of market expectations. At the end of July, Pets at Home said sales momentum had returned to all areas of its business in the last eight weeks of the first quarter ended July 16, as customer shipping habits returned to normal and services were reinstated. This momentum has remained within the group's Retail and Veterinary operations during the second quarter to date, with double digit like-for-like sales growth in the eight weeks ended September 10. Despite Covid-19-related uncertainties, including the risk of a second national lockdown, Pets at Home expects underlying pretax profit for the year ending late March 2021 to be ahead of market expectations. As at Wednesday, Pets at Home's compiled consensus expectations for underlying pretax profit post-IFRS 16 was GBP73 million. In financial 2020, underlying pretax profit pre-IFRS 16 was GBP99.5 million.
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National Express, up 5.6%. The transport operator said it traded "slightly above" its expectations and is encouraged to see continued passenger growth across the business. The FTSE 250-listed public transport operator traded above its guided base case which assumed revenue to be around 50% of pre-Covid 19 expectations until the end of August. It also said that ongoing tight cost controls are driving positive growth in earnings before interest, tax, depreciation and amortisation, and in cash flow. Both its UK bus businesses have continued to see good passenger growth in recent weeks, National Express said, adding that it has introduced additional coach services to meet social distancing restrictions. National Express has provisionally awarded an up to nine-year contract to run 240 urban buses in Lisbon, Portugal. It also has won a five-year, paratransit contract for up to 75 vehicles, in the US state of California.
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FTSE 250 - LOSERS
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Cineworld, down 15%. The cinema operator reported a sharp swing to loss for the first half of 2020, as revenue was severely hit by the Covid-19 pandemic. For the six months to the end of June, Cineworld reported a pretax loss of USD1.64 billion, compared to a profit of USD139.7 million the year before. Adjusted earnings before interest, taxes, depreciation and amortisation fell by 93% year-on-year to USD53.0 million from USD758.6 million. This was on revenue that declined by 67% to USD712.4 million from USD2.15 billion, as admissions dropped by 65% to 47.5 million from 136.0 million. From late March to late June, all of Cineworld's sites were closed. To date, 561 out of 778 sites have been reopened, but 200 in the US, six in the UK and 11 in Israel remain closed. In the US, the majority of sites closed are in California and New York. Cineworld said negotiations with banks remain ongoing in order to secure covenant waivers in respect of December 2020 and June 2021.
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OTHER MAIN MARKET AND AIM - WINNERS
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AA, up 5.1%. The roadside rescue and car insurance provider has agreed to a request from the remaining two bidders eyeing AA to make a joint offer. AA said TowerBrook Capital Partners UK and Warburg Pincus International have confirmed a "strong interest" in making an all-cash takeover offer, acting as a consortium. The pair also would intend to significantly pay down AA's hefty debt pile. The update on Thursday follows the announcement on Wednesday by Platinum Equity Advisors LLC and Centerbridge Partners Europe LLP that they did not intend to make a takeover offer for AA. Both private equity firms had said talks between them and AA were terminated "by mutual agreement". AA said Thursday it intends to progress talks with the newly formed bidding consortium of TowerBrook and Warburg Pincus and would make a further announcement in due course, adding: "Notwithstanding any possible offer for the company, the board continues to engage with a number of other parties to assess a range of alternative potential refinancing options, including the possibility of raising new equity."
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By Lucy Heming; lucyheming@alliancenews.com
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