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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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Associated British Foods, up 3.0%. The Primark clothing chain owner and sugar producer reported a sales rise at Primark over the recent 16-week period. Primark sales were up 3.0% year-on-year, or 4.5% higher at constant currency. AB Foods largely attributed this to an increase in Primark's selling space. Elsewhere, the period to January 4 saw sales rises in the Sugar unit, the Ingredients unit and revenue climbed in the agriculture business. The laggard, AB Foods said, was its Grocery unit, which saw sales level with last year. On its full-year guidance, AB Foods said: "Our outlook for the group is unchanged, with progress expected, on both a reported and an IFRS 16 adjusted basis, in adjusted earnings per share for the year." IFRS 16 is an accounting standard governing the financial treatment of leases.
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FTSE 100 - LOSERS
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Pearson, down 10%. The education publisher said it expects up to a 15% decline in operating profit for 2020 amid the changing preferences of learners. Pearson said its underlying revenue was flat, while adjusted operating profit was GBP590 million, within the guidance range, and up 8.1% from GBP546 million in 2018. US Higher Education Courseware revenue declined by 12%, though there was "modest" growth in digital revenue. In addition, Pearson said Chief Financial Officer Coram Williams will be leaving the company to take on a similar role at an undisclosed company based in Europe. Pearson said Deputy CFO Sally Johnson will succeed Williams on his departure later this year. The move follows the retirement of Chief Executive John Fallon - which was announced in mid-December. "It's hard to imagine how shareholders must be feeling right now, having been assured by senior management that they had a vision for the business going forward, that the two architects of the business restructuring, as well as the share price declines of the last five years, have now decided to walk away from the wreckage," said CMC Markets analyst Michael Hewson. The stock fell its lowest level since 2008 in early trade.
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Whitbread, down 4.0%. The Premier Inn hotel chain owner said it continues to suffer from economic uncertainty and higher costs in the UK. Weak business and leisure confidence continued, which was partially offset by the strength of the central London market, where the company outperformed. Whitbread said total sales of Premier Inn UK were down 0.4%, compared to 0.1% growth in the second quarter. In London, sales grew 5%. Meanwhile like-for-like Premier Inn UK sales were down 2.1%. Looking ahead, in 2021 the company expects net margin headwind of about GBP60 million due to inflation, wages and other costs. "Despite a stronger post-election environment Whitbread has delivered relatively lacklustre results again this morning. External factors continue to work against Whitbread, with Brexit casting a dark cloud over the group, while net margin headwinds stemming from a higher National Living wage and higher utility costs also weigh on the group's outlook," said the Share Centre.
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Compass Group, down 1.7%, SSE, down 1.0%. The stocks went ex-dividend meaning new buyers no longer qualify for the latest payout.
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FTSE 250 - WINNERS
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Wood Group, up 5.0%. The oilfield services company guided for earnings growth in 2019, despite revenue remaining flat, as markets improved. Aberdeen-based John Wood sees adjusted earnings before interest, tax, depreciation and amortisation of between USD850 million and USD860 million in 2019, compared to USD694 million a year prior. This suggests a 22% to 24% rise year-on-year. Operating profit before exceptional items is seen between USD410 million and USD420 million, from USD357 million the year before. This means another year of strong growth, of between 15% and 18%, after 2018's year-on-year rise of 68%. Looking ahead, the company said it is well-positioned. It sees an uptick in activity in the Asia Pacific and the Middle East, though geopolitical tensions may pose a risk.
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Rank Group, up 3.8%. The gaming company said its full-year profit will beat market expectations, as the firm reported it benefited from a cost-saving programme. For the year ending June 30, Rank expects underlying operating profit, before IFRS 16, to be in the range of GBP105 million and GPB115 million. This would be ahead of the consensus range of GBP93 million to GBP103 million. It would also represent a year-on-year improvement of as much as 59% from last year's operating profit of GBP72.5 million.
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FTSE 250 - LOSERS
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Spirent Communications, down 7.3%. The telecommunications network testing and analytics firm was cut to Underweight from Equal Weight by Barclays.
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Hays, down 4.0%. The recruiter warned on interim profit as difficult market conditions persist around the world. Hays's net fees for its second quarter ended December 31 fell 7% on the year before, and declined 4% on a like-for-like basis. In the UK & Ireland, net fees fell 4% both reported and like-for-like, while Australia & New Zealand dipped 11% and 7% like-for-like. In Germany, net fees were 12% lower and 9% down like-for-like, while Rest of World net fees fell 1%, but did rise 1% like-for-like. Following this second-quarter performance, Hays now expects operating profit for the first half of around GBP100 million, which would be an approximate drop of 19% from the year before.
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OTHER MAIN MARKET AND AIM - LOSERS
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N Brown Group, down 25%. The catalogue and online clothing retailer issued a profit warning, reporting a mixed performance from its retail arm, amid a "highly promotional market" and struggles in its financial services unit. Total revenue in the 18 weeks to January 4 fell by 5.0%. Womenswear saw revenue rise by 1.1% year-on-year, with digital revenue up 6.7%, predominantly due to growth in its Simply Be brand. Full-year adjusted pretax profit of expected to be in the range of GBP70 million and GBP72 million, compared with the market consensus range of GBP78.0 million and GBP84.1 million. Compounding its woes, the stock was cut to Hold from Buy by Peel Hunt.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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