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(Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Tuesday.
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FTSE 100 - WINNERS
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Associated British Foods, up 5.6%. The Primark-owner boosted its dividend on rising revenue, despite annual profit dipping amid an impairment to its bakery business. For the year ended September 14, pretax profit fell 8.6% to GBP1.17 billion from GBP1.28 billion the year prior. This was despite revenue rising 1.6% to GBP15.82 billion from GBP15.57 billion the year before. Profit performance was hurt by a GBP79 million exceptional charge related to the impairment of its Allied Bakeries unit, amid low bread prices and rising competition. "The group delivered a resilient performance this year, with strong profit growth from Grocery and Primark which more than offset the profit decline in Sugar," Chief Executive George Weston said. "The positive reception by US consumers to Primark, combined with our profitable store model, gives us confidence for further expansion in the US market. Two further US stores will open in the new financial year, at American Dream, the retail and entertainment complex in New Jersey which will now open in spring 2020, and Sawgrass Mills, Florida in summer 2020," Weston said.
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Imperial Brands, up 1.4%. The tobacco firm recovered after opening the session 1.1% lower. Imperial Brands said it underperformed in its recent financial year after a tough trading period for its Next Generation Products and announced the appointment of a new chair. For its year ended September 30, the tobacco company's pretax profit dropped 7.1% to GBP1.69 billion from GBP1.82 billion. The profit decline followed a rise in distribution, advertising & selling costs to GBP2.30 billion from GBP2.00 billion. Revenue rose 5.1% to GBP31.59 billion from GBP30.07 billion after growth from both tobacco and NGP sales. NGP includes products such as Imperial Brands' Blu e-cigarette. Chief Executive Alison Cooper said: "Although we grew NGP revenues by around 50%, this was below the level we expected to deliver. Our delivery was also impacted by an increasingly competitive environment and regulatory uncertainty in the USA. Growth in Europe was also slower, despite achieving leading retail shares in several markets." The company lifted its annual dividend by 10% in the year to 206.6p per share from 187.8p the year before.
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FTSE 250 - WINNERS
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John Wood Group, up 4.0%. Goldman Sachs raised the energy services firm to Neutral from Sell.
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Euromoney Institutional Investor, up 2.8%. The information services company aid financial 2019 results will be "slightly" above board's expectations and that the company is making good progress on its previously announced strategic review. In September, Euromoney said it will undertake a strategic review of its Asset Management division, made up of the Institutional Investor, BCA Research and NDR businesses. The company plans to report the businesses as discontinued operations and as assets held for sale for the year ended September 30. The company, which provides data, pricing, market intelligence and analysis to global and specialist markets, said adjusted revenue for financial 2019 is expected to be GBP401 million, with flat underlying revenue. Adjusted revenue in financial 2018 was GBP414.1 million, with underlying revenue of GBP388.4 million. Adjusted pretax profit for financial 2019 is expected to be GBP104 million compared to GBP109.2 million the year before. Underlying pretax profit for the current year is expected to be 9% higher than the GBP100.6 million reported the year before. "This reflects a continuation of good growth in the Pricing, Data & Market Intelligence segment, with underlying revenue up approximately 4% and approximately 10% growth in Fastmarkets subscriptions, " the London-headquartered company said.
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Weir Group, up 1.6%. The engineering firm revered some early losses after saying third-quarter sales rose overall year-on-year but warned on full-year profit in its Oil & Gas division after experiencing difficult trading conditions. Orders from continuing operations in the quarter ended September 30 rose by 4% from last year, though Weir added they were flat on a like-for-like basis. In the Oil & Gas division, orders were 32% lower year-on-year, with the firm attributing this to a tough market conditions in North America. Weir added: "As a result of lower volumes in North America, the division was only moderately profitable in the third quarter and is anticipated to be sequentially lower in the fourth quarter." The firm said that there is a lack of visibility as to when trading conditions will improve and, in turn, it has undertaken a GBP30 million cost reduction programme, which will trim its North American workforce by 20%. The cost-cutting will result in an exceptional restructuring charge of GBP20 million
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FTSE 250 - LOSERS
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Babcock International, down 2.8%. Barclays initiated the engineer with an Underweight recommendation.
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Dixons Carphone, down 3.1%. RBC cut the electronics retailer to Sector Perform from Outperform.
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IWG, down 2.0%. The shared office provider saw its revenue grew in the third quarter of its financial year, with strong performance from all its regions, including improved momentum in the UK. For the three months to the end of September, IWG reported revenue at GBP692.3 million, up 9.4% at constant currency from GBP6.11.6 million in the same period a year before, driven by robust growth in all regions, including the UK. Group mature revenue - meaning from office centres opened before 2018 - rose by 3.3% at constant currency to GBP591.4 million from GBP552.8 million the prior year, as the UK started to perform well enough to make a contribution to revenue. Mature occupancy for the three-month period rose by 2.2 percentage points to 76.4% from 74.2% the same period the year before.
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OTHER MAIN MARKET AND AIM - WINNERS
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Nanoco, up 6.7%. The firm confirmed that it has entered into preliminary talks for a potential sale of the company. The company, which supplies quantum dots used in manufacturing LCD screens, said that it is undertaking a review of all available strategic options, including, but not limited to, a potential sale through the commencement of a formal sale process. Nanoco has appointed Evercore Partners International as its financial adviser to assist with the sale process. "Nanoco remains in active discussions with existing and other potential new customers for our materials and services with a particular focus on the display and infra-red sensing markets. In addition to these potentially lucrative commercial opportunities for continued funding of the company's operations, the board is also reviewing other sources of funding," Nanoco said. "The company's current resources give reasonable headroom for the sale process and commercial opportunities to come to successful conclusions, with contingency plans in place if needed," it added.
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Castleton Technology, up 9.3%. The software services provider said its first half was challenging, particularly due to one-off revenue losses, but is confident going forward. In the six months to September 30, Castleton sunk to a pretax loss of GBP199,000 from a profit of GBP497,000 the year before. Revenue slipped to GBP11.6 million from GBP12.9 million. Chair David Payne said: "Whilst it has been disappointing to report reduced revenue and profit in the period, compared to the same period in the prior year, which has resulted in a downgrade to our forecasts for the full year, the underlying business remains strong and profitable. Additionally, we believe the reorganisation of the group, despite impacting the business in the short term, will make the group more successful going forward."
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GAN, up 7.8%. The gambling software firm said it it expects 2019 revenue to more than double amid strong growth from its clients. For the four months ended October, gross operator revenue tripled to USD121.5 million from USD37.7 million on the year prior. This was amid October gross operator revenue almost quadrupling to USD40.6 million from USD11.0 million the year before. As a consequence, for 2019 as a whole, GAN expects its revenue to more than double from the GBP10.6 million reported in 2018.
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OTHER MAIN MARKET AND AIM - LOSERS
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Filta Group , down 18%. The filtration-focused engineering firm said it expects profit for the second half of the year to be "similar" to that reported in the first half, after a number of delays and additional costs incurred. In the second half of 2019, Filta expects adjusted earnings before interest, taxes, depreciation & amortisation to be "similar" to the GBP1.7 million reported for the first six months of the year. This was after planned efficiencies from its up to GBP8.1 million acquisition of Watbio Holdings Ltd in December were slower to be realised in the second half of 2019 than expected. Consequently, Filta has had to divert resources to catch up on an order backlog in its UK Fat, Oils & Grease unit. In addition, a small amount of installation work which had been expected in the final quarter of 2019 will now be delayed until 2020.
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Plexus Holdings, down 11%. The engineering services firm reported a full-year revenue surge but remained loss-making. In the year ended June 30, revenue multiplied to GBP3.6 million from GBP318,000 last year. The company narrowed its pretax loss to GBP3.7 million from GBP5.2 million last year.
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Verona Pharma, down 10%. The company said its loss widened considerably in the third quarter of 2019, dragged down as research & development costs more than doubled. For the three months ended September 30, Verona's pretax loss came to GBP12.8 million, more than three times the GBP3.5 million loss posted the the year before. This substantial change was due mostly to R&D costs, which ballooned to GBP12.0 million from GBP5.3 million. Verona's general & administrative costs also rose, climbing 43% to GBP2.0 million from GBP1.4 million. For the nine months to September 30, pretax loss widened to GBP33.7 million from GBP18.3 million after a more than doubling of R&D costs to GBP27.8 million from GBP13.6 million and a 28% increase in general & administrative costs to GBP5.9 million from GBP4.6 million.
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By Paul McGowan; paulmcgowan@alliancenews.com
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