LONDON (Alliance News) - Mild morning losses turned into tepid gains by midday Wednesday for London stock indices, with shares in Burberry Group rising strongly after the luxury firm reported growth in revenue in the first quarter of its financial year, benefiting from the weak pound, and upped its guidance for full-year profit.
Fashion house Burberry said retail revenue in the three months ended June 30 grew by 4% year-on-year to GBP423 million, but within this, comparable sales declined by 3% in what Burberry described as a "challenging external environment".
Burberry said all three global regions of Asia, the UK and US experienced a low single-digit percentage comparable sales decline, due to persisting underlying cost-inflation pressures. However, Liberum said the decline in comparable sales was not as bad as the consensus forecast for a 5% fall.
In the first half ending September 30, Burberry now expects wholesale revenue at constant exchange rates to fall by over 10% year-on-year, although full-year reported adjusted retail and wholesale profit should benefit by about GBP90 million if exchange rates remain as they are now.
The stock was up 5.7%, the best performer in the FTSE 100.
The blue-chip index was up 0.2%, or 12.41 points, at 6,693.10. The mid-cap FTSE 250 was up 0.2% at 16,832.46. The AIM All-Share was up 0.5% at 724.61.
In mainland Europe, the CAC 40 in Paris was up 0.4% and the DAX 30 in Frankfurt up 0.1%.
Before the open on Wall Street, futures pointed the Dow Jones Industrial Average slightly higher, the S&P 500 index up 0.1% and the Nasdaq 100 up 0.2%.
Having rallied for the past few trading sessions, housebuilders led the fallers in the FTSE 100. Barratt Developments said it is preparing for the greater uncertainty following the UK's referendum on European Union membership but expects profit in its recently ended financial year to be significantly higher.
Barratt said it expects to post a pretax profit of GBP680.0 million for the year ended June 30, a 20% increase from the GBP565.5 million reported a year earlier, after its total completions for the year rose 5.3% to 17,319 from 16,447 and the average selling price of these rose 10.6% to GBP260,000 from GBP235,000.
The company noted that forward sales, including joint ventures, fell slightly, by 0.5% to GBP1.76 billion from GBP1.77 billion, and said it was "mindful" of the greater uncertainty facing the UK economy following the EU referendum.
Analysts from Shore Capital and Liberum expect Barratt to be hit more than other large housebuilders by the tougher conditions in the post-Brexit housing market due to its thinner margins.
Barratt was one of the worst performers in the FTSE 100, down 1.5%. Peers Berkeley Group, down 2.8%, Persimmon, down 1.1%, and Taylor Wimpey, down 1.0%, also were all amongst the biggest fallers.
Discount retailer Poundland Group said it has reached an agreement with South African furniture retailer Steinhoff International Holdings for Steinhoff to buy Poundland.
Under the terms of the offer, Poundland shareholders will receive 222 pence in cash for each Poundland share, comprising 220 pence in cash per share and Poundland's final dividend of 2p per share for its financial year ended March 27.
This values Poundland at approximately GBP597 million, and represents a premium of 40% to Poundland's 158.25p closing price on June 13, which was the last business day before Steinhoff first bought Poundland shares, and a premium of 13% to Poundland's 196p closing price on Tuesday. On Wednesday, the stock was up 13% at 220.50p and was the best performer in the FTSE SmallCap index.
JD Wetherspoon traded up 2.2% after the Brexit-supporting pub chain reported growth in sales in the 11 weeks to July 10 and in the 50 weeks to the same date, as it prepares to close its current financial year.
Wetherspoons said total sales in the 11 weeks grew by 3.8% year-on-year, while rising by 5.5% in the 50 weeks. Like-for-like sales increased by 4% in the 11 weeks and by 3.4% in the 50 weeks. Full-year operating margin before exceptional items and before a GBP3.8 million property gain is expected to be around 6.8%, compared with 7.4% last year.
Wetherspoon has opened 13 new pubs in the financial year, sold 29 and closed 11. It expects to have opened 16 new pubs by the end of the year, booking around GBP13 million in exceptional, non-cash losses due to the pub disposals and closures.
In economic news, China's exports remained weak in June on subdued global demand and given the uncertainty over 'Brexit', which weighs on orders from China's major export destinations, the near-term prospects are not bright.
In dollar terms, exports fell 4.8% on a yearly basis in June, the General Administration of Customs reported Wednesday. Nonetheless, it was slower than the expected decrease of 5%. At the same time, imports registered an 8.4% decrease, which was bigger than the 6.2% drop forecast by economists.
Consequently, the trade surplus fell to USD48.11 billion from USD49.98 billion in May. Economists had expected the surplus to decrease to USD45.65 billion.
Still ahead in the economic calendar, the US Energy Information Administration's crude oil stocks are at 1530 BST, and the Beige book on the US economic situation is at 1900 BST.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
Copyright 2016 Alliance News Limited. All Rights Reserved.
UK dividends calendar - next 7 days
Monday 6 May | |
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Tuesday 7 May | |
Begbies Traynor Group PLC | dividend payment date |
Ferguson PLC | dividend payment date |
Manchester & London Investment Trust PLC | dividend payment date |
Mobius Investment Trust PLC | dividend payment date |
Nexus Infrastructure PLC | dividend payment date |
Pebble Group PLC | dividend payment date |
Pinewood Technologies Group PLC | special dividend payment date |
Thungela Resources Ltd | dividend payment date |
Volution Group PLC | dividend payment date |
Wednesday 8 May | |
Melrose Industries PLC | dividend payment date |
Personal Group Holdings PLC | dividend payment date |
Thursday 9 May | |
Admiral Group PLC | ex-dividend payment date |
AG Barr PLC | ex-dividend payment date |
Aurora Investment Trust PLC | ex-dividend payment date |
Balanced Commercial Property Trust Ltd | ex-dividend payment date |
Bank of Ireland Group PLC | ex-dividend payment date |
Bellevue Healthcare Trust PLC | ex-dividend payment date |
Braime Group PLC | ex-dividend payment date |
Centaur Media PLC | ex-dividend payment date |
Chenavari Toro Income Fund Ltd | ex-dividend payment date |
Clarkson PLC | ex-dividend payment date |
Coca-Cola Europacific Partners PLC | ex-dividend payment date |
Custodian Property Income REIT PLC | ex-dividend payment date |
CVC Income & Growth Ltd EURO | ex-dividend payment date |
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Domino's Pizza Group PLC | dividend payment date |
Epwin Group PLC | ex-dividend payment date |
F&C Investment Trust PLC | dividend payment date |
Fidelity Special Values PLC | ex-dividend payment date |
Focusrite PLC | ex-dividend payment date |
Grafton Group PLC | dividend payment date |
Gresham Technologies PLC | ex-dividend payment date |
Headlam Group PLC | ex-dividend payment date |
Henderson International Income Trust PLC | ex-dividend payment date |
HSBC Holdings PLC | ex-dividend payment date |
Ibstock PLC | ex-dividend payment date |
Invesco Perpetual UK Smaller Cos Investment Trust PLC | ex-dividend payment date |
JPMorgan Global Core Real Assets Ltd | ex-dividend payment date |
Lancashire Holdings Ltd | ex-dividend payment date |
LSL Property Services PLC | ex-dividend payment date |
M&C Saatchi PLC | ex-dividend payment date |
M&G PLC | dividend payment date |
Macfarlane Group PLC | ex-dividend payment date |
Marwyn Value Investors Ltd | ex-dividend payment date |
Midwich Group PLC | ex-dividend payment date |
Montanaro UK Smaller Cos Investments Trust PLC | dividend payment date |
Octopus Titan VCT PLC | ex-dividend payment date |
One Media iP Group PLC | ex-dividend payment date |
Petershill Partners PLC | ex-dividend payment date |
Picton Property Income Ltd | ex-dividend payment date |
PRS REIT PLC | ex-dividend payment date |
Reach PLC | ex-dividend payment date |
Sherborne Investors Guernsey C Ltd | ex-dividend payment date |
Sthree PLC | ex-dividend payment date |
Sylvania Platinum Ltd | ex-dividend payment date |
Taylor Maritime Investments Ltd | ex-dividend payment date |
Tracsis PLC | ex-dividend payment date |
Travis Perkins PLC | dividend payment date |
UIL Ltd | ex-dividend payment date |
Friday 10 May | |
AIB Group PLC | dividend payment date |
Alpha Group International PLC | dividend payment date |
Antofagasta PLC | dividend payment date |
Hammerson PLC | dividend payment date |
Hunting PLC | dividend payment date |
International Personal Finance PLC | dividend payment date |
Invesco Select Trust Global Equity Income PLC | dividend payment date |
Invesco Select Trust UK Equity PLC | dividend payment date |
Johnson Service Group PLC | dividend payment date |
Kerry Group PLC | dividend payment date |
Moneysupermarket.com Group PLC | dividend payment date |
Schroder Asian Total Return Inv Co PLC | dividend payment date |
Schroder European Real Estate Investments Trust PLC | dividend payment date |
Schroder Oriental Income Fund Ltd | dividend payment date |
Serco Group PLC | dividend payment date |
Smurfit Kappa Group PLC | dividend payment date |
Somero Enterprises Inc | special dividend payment date |
Taylor Wimpey PLC | dividend payment date |
Tufton Oceanic Assets Ltd | dividend payment date |
VPC Specialty Lending Investments PLC | dividend payment date |
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