WPP Share News (WPP)

LONDON (Alliance News) - Stock prices in London ended firmly in the red on Thursday, with sharp declines for TUI, Ocado and WPP offsetting gains by Smith & Nephew and Compass in the FTSE 100.Elsewhere, the pound clawed back sharp losses after the Bank of England left interest rates unchanged and downgraded its outlook for the UK economy. The FTSE 100 index closed down 79.51 points, or 1.1%, at 7,093.58. The FTSE 250 closed down 274.15 points, or 1.4%, at 18,799.26, and the AIM All-Share closed down 12.19 points, or 1.3%, at 911.94.The Cboe UK 100 ended down 1.0% at 12,061.44, the Cboe UK 250 closed down 1.3% at 16,795.97, and the Cboe Small Companies ended down 0.6% at 11,140.83."The FTSE 100 has been trading in the red, with a sharp decline in TUI shares helping to drag the index lower. The travel sector has been in focus today after a jump in Thomas Cook shares and a drop in TUI. The travel market is clearly suffering from Brexit uncertainty amid a profit warning from TUI and a warning from Thomas Cook that uncertainty is putting off UK consumers from booking summer holidays," said IG market analyst Joshua Mahony.On the London Stock Exchange, Smith & Nephew ended as the best blue-chip performer, up 5.6% after the medical devices maker raised its dividend and said it still expects to see growth over the coming year.However, Smith & Nephew posted a reduction in annual profit in 2018 due to increased expenses from its restructuring effort. Pretax profit was USD781 million, 11% less than the USD879 million in 2017. The company undertook its Accelerating Performance & Execution restructuring programme beginning at the end of 2017. This incurred USD120 million of costs in 2018, while delivering a benefit of around USD60 million over the course of the year.The restructuring programme is expected to produce a USD160 million annualised benefit by 2022 for a one-off USD240 million cost.Revenue for 2018 was USD4.90 billion, up from USD4.77 billion. This matched the company-compiled consensus of USD4.91 billion. Looking ahead, Smith & Nephew said revenue is expected to increase around by 1.8% to 2.8% and 2.5% to 3.5% on an underlying basis. Smith & Nephew declared a final dividend of 22.0 cents per share, bringing the total for 2018 to 36.00 cents, up 2.9% from 35.00 cents per share for 2017.Compass Group closed up 3.7% at 1,761.68 pence. The stock price had hit an all-time high of 1,776.50p in early trade Thursday.The contract caterer lifted its full-year growth expectations after reporting an "excellent" start to the year.Compass said revenue in the three months to the end of December 2018 grew by 6.9% on a year before, driven by strong levels of new business wins and a positive sporting events calendar.Looking ahead, Compass said it now expects annual growth to be slightly above the middle of its target growth range of 4% to 6%, with modest margin progression. At the end of November, the company expected its growth to be in the middle of its 4% to 6% range. At the wrong end of the large cap index Thursday, TUI saw around GBP1.3 billion slashed off its total market value. The Anglo-German travel operator warned of stagnating earnings for its current financial year due to the "extraordinary" hot weather last summer and weakness in the pound. The stock closed down 19% and hit an intraday low of 946.20p in afternoon trade, its lowest level since April 2017. For the year ending September 30, TUI expects adjusted earnings before interest, taxes, depreciation and amortisation to be broadly stable on the record performance in the prior year of EUR1.17 billion."Consequently, we are not reiterating our guidance of at least 10% [compound annual growth rate] in underlying Ebitda at constant currency for the three years to 2020," the company said.TUI said the out-of-the-ordinary hot weather in the recent summer resulted in later bookings, weakening margins. It also cited the "continued weakness of the pound sterling, making it difficult to improve margins on holidays sold to UK customers".Faring better, TUI's smaller peer Thomas Cook closed up 10% after it announced a strategic review of its airline business. Thomas Cook said revenue for the first quarter rose 1% to GBP1.66 billion, but the travel company's adjusted operating loss widened by GBP14 million to GBP60 million.Ocado Group closed down 9.8% after the online grocer said that that fire that broke out at its warehouse in Andover led to the evacuation of residents in the area on Wednesday evening, due to the presence of pressurised refrigerants on site.The stock is down 12% since the start of the week.Advertising firm WPP closed down 8.4% after French peer Publicis Groupe's fourth-quarter organic revenue missed estimates.In the FTSE 250, Beazley ended as the best performer, up 5.3% after the insurer said its profit dropped significantly in 2018, but gross premiums achieved double-digit growth on a strong performance in the US.Beazley's pretax profit for 2018 fell 55% to USD76.4 million from USD168.0 million a year earlier but total revenue for the company rose 5.7% to USD2.16 billion from USD2.04 billion. The company said profitability was hit by underwriting losses in its property insurance and reinsurance business, which fed into a combined ratio for the group of 98% from 99% in 2017.The company delivered strong premium growth in 2018 against a backdrop of often challenging market conditions, with premiums rising 12% to USD2.62 billion from USD2.34 billion the year prior.At the bottom of the midcap index, Petrofac ended down 29%. The oil and gas services firm said an ex-employee has admitted bribery in the UK, with some Petrofac individuals and entities alleged to have acted with the individual. Petrofac stressed that none of its current board members are alleged to have been involved.The pound was flat, quoted at USD1.2967 at the London equities close, compared to USD1.2960 at the same time on Wednesday. Sterling had slipped to an intraday low of USD1.2854 immediately after the bank's rate decision. "Sterling staged a solid comeback after dealers realised the update wasn't overly pessimistic, and certain amount of negative news was factored in during the week," said David Madden, market analyst at CMC Markets.The Bank of England slashed its growth forecasts for the UK economy, saying the outlook remained highly sensitive to the effects of Brexit, as policymakers left the key interest rate and bond purchase levels unchanged."UK economic growth slowed in late 2018 and appears to have weakened further in early 2019," the bank said. "This slowdown mainly reflects softer activity abroad and the greater effects from Brexit uncertainties at home."The nine-member Monetary Policy Committee, led by Governor Mark Carney, held the bank rate unchanged at 0.75%, in line with economists' expectations. The previous change in the bank rate was a quarter-point hike in August and the rate is now at its highest level since 2009. In its latest Inflation Report, the central bank lowered its UK growth forecast for this year to 1.2%, the slowest pace in a decade, from 1.7% predicted in November. That was the biggest cut in the projection since the 2016 referendum.Growth projections for 2020 were also lowered to 1.5%, while the outlook for 2021 was raised to 1.9%. The previous forecast for both years was 1.7%. Brexit uncertainties had intensified considerably since the Committee's November meeting, the bank reiterated. "The fog of Brexit is causing short term volatility in the economic data, and more fundamentally, it is creating a series of tensions in the economy, tensions for business," BoE Governor Carney said. Despite the impact of Brexit, the central bank said: "Were the economy to develop broadly in line with its Inflation Report projections, an ongoing tightening of monetary policy over the forecast period, at a gradual pace and to a limited extent, would be appropriate to return inflation sustainably to the 2% target at a conventional horizon."The pound was given an additional boost after the Carney struck a slightly more upbeat tone on the UK economy's prospects in his press conference."Carney was keen to stress that the economic fundamentals remain sound which means that assuming the backlog of investment and consumer spending exists, due to lower spending in the run up to Brexit, the economy could weather the global slowdown quite well," said Oanda senior market analyst Craig Erlam.Meanwhile, UK Prime Minister Theresa May held "robust but constructive" talks with European Commission president Jean-Claude Juncker as she sought changes to her Brexit deal.Juncker underlined that the Withdrawal Agreement thrashed out between the EU and May would not be redrawn, but held open the possibility of adding "more ambitious" wording to a document setting out plans for the future relationship.May is holding a series of meetings with EU leaders in Brussels as she seeks changes to the Irish backstop in an effort to get a deal through the House of Commons.Brexit Secretary Stephen Barclay and EU chief negotiator Michel Barnier will meet next Monday, while Juncker and May will have another meeting before the end of the month.In Paris the CAC 40 ended down 1.8% and the DAX 30 in Frankfurt down 2.7%. The euro was lower, quoted at USD1.1355 at the European equities close, against USD1.1376 late Wednesday, after the European Commission lowered its eurozone growth forecast.The European Commission slashed its GDP growth forecast for 2019 to 1.3% from 1.9% and edged lower its estimate for growth in 2020 to 1.6% from 1.7%.The downgrade reflected external factors, such as trade tensions and the slowdown in emerging markets, notably in China. Officials warned that the European outlook faces substantial risks due to the uncertainty about Brexit and the slowdown in China.In addition, the EU expects eurozone inflation to ease to 1.4% this year from 1.7% last year, due to lower oil prices. Price growth is expected to pick up to 1.5% in 2020.Previously, inflation for 2019 was forecast at 1.8% and that for 2020 was projected at 1.6%."The gloomy report has confirmed investor fears of a slowing outlook. There is a feeling in the market that not all the bad news surrounding Europe is out yet. There is likely to be more weakness in data before we eventually start to see a turnaround. The mood in Europe was strongly risk off, with investors moving out of riskier assets such as equities, particularly the banks," said City Index analyst Fiona Cincotta. Stocks in New York were lower at the London equities close, the DJIA was down 1.2%, the S&P 500 index down 1.3% and the Nasdaq Composite down 1.5%.In corporate news, Twitter shares were down 9.7% in New York after the social media company's revenue forecast fell short of expectations.For the first quarter, Twitter forecast operating income between USD5 million and USD35 million, and revenue between USD715 million and USD775 million. Analysts were expecting the company to report revenue of USD762.43 million for the quarter.In addition, Twitter's average monthly active users or MAU figure declined from the year-ago period due in part to the company's effort to remove malicious accounts from its platform.Brent oil was marginally lower, quoted at USD62.30 a barrel at the London equities close from USD62.43 at the close Wednesday.Gold also was lower, quoted at USD1,309.84 an ounce at the London equities close against USD1,312.20 late Wednesday.The economic events calendar on Friday has trade figures from Germany at 0700 GMT. Most financial markets in China remain closed for the Lunar New Year holiday, but markets in Hong Kong will reopen.The UK corporate calendar on Friday has trading statements from 'Big Six' energy provider SSE and from London West End landlord Shaftesbury.