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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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Hikma Pharmaceuticals, up 5.3%. The drugmaker said it delivered a positive financial performance in 2019. Hikma said group revenue in 2019 rose 7% to USD2.2 billion, compared to USD2.07 billion in 2018, reflecting good growth in each of the three business. Pretax profit grew to USD493 million from USD293 million in 2018, also reflecting strong performance of its three business segments. By division, Injectables revenue grew 8% to USD894 million, "driven by strong demand" for the company's portfolio. Meanwhile Generics and Branded revenue grew 4% and 8% respectively, reflecting "excellent commercial execution", reduced costs and strong demand across Middle East, North Africa region. The company declared an annual dividend of 44 cents per share, an increase from 38 cents per share in 2018. The final dividend 30 cents, up from 26 cents. Looking ahead, the company said it expects its three business segments to grow in 2020. Hikma said it does not currently anticipate any material impact from coronavirus, since it does not have extensive operations in China.
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RSA Insurance Group, up 2.7%. RSA reported a mixed 2019 performance, with profit coming in above market expectations, despite a fall in net written premiums. The general insurer's net written premiums for 2019 declined by 1.1% to GBP6.40 billion from GBP6.47 billion, coming in below the analyst consensus forecast of GBP6.46 billion. RSA's net written premiums were up 1% in Scandinavia and 3% in Canada, however the UK & International unit reported a 7% drop due to underwriting and rating actions taking effect. Pretax profit for the year increased by 15% to GBP551 million from GBP480 million, and well above consensus forecasts of GBP506 million. In addition, operating profit rose by 27% to GBP656 million from GBP517 million, also well above analyst expectations of GBP644 million. RSA declared a final dividend of 15.6 pence per share, brining the total dividend for 2019 to 23.1p, up 10% from 21.0p the year before.
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British American Tobacco, up 2.2%. The Dunhill and Rothmans cigarette maker raised its dividend after reporting mixed annual results. For 2019, BAT posted a GBP7.91 billion pretax profit, down 5.2% from 2018. While revenue rose 5.7% to GBP25.88 billion, depreciation, amortisation and impairment costs climbed 45% to GBP1.51 billion while other operating expenses were 18% higher at GBP7.85 billion. The company incurred a GBP436 million charge on a class action lawsuit in Canada, plus amortisation and impairment of trademarks totalling GBP481 million. BAT's constant currency revenue guidance was to the upper end of a guided range of 3% to 5%. BAT raised its dividend by 3.6% to 210.4 pence per share. "These are predictably solid results, which demonstrate the strength of BAT's businesses around the world. Tobacco faces many challenges currently, but BAT is navigating around them and generating substantial cash flows in the process... A restructuring programme launched last year helped margins to rise, whilst strong underlying cash flow saw debt levels falling," Hargreaves Lansdown's Steve Clayton said.
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Reckitt Benckiser, up 2.1%. The household goods firm raised its annual dividend as it said it was "too early" to assess the affect the coronavirus outbreak will have on future earnings. For 2019, Reckitt posted an annual loss after a huge impairment of more than GBP5 billion on goodwill related to its acquisition of Mead Johnson Nutrition. As such, Reckitt posted a pretax loss for 2019 of GBP2.11 billion, swung from a pretax profit of GBP2.72 billion the year prior. Net revenue rose 2.0% at actual exchange rates to GBP12.85 billion, and was 0.8% higher at constant rates. This compares to company-compiled consensus of GBP12.83 billion of net revenue. Reckitt declared a final dividend of 101.6 pence per share for the year, taking the year's total to 174.6p. This is 2.3% higher than the dividend of 170.7p in 2018. Reckitt has concluded a strategy review, setting up a three-phase plan targeting mid-single-digit revenue growth, margins in the mid-20s as a percentage, and 7% to 9% earnings per share growth. "All in all, these results on an adjusted basis were generally in line. The business still faces short-term uncertainties including the Covid-19 disruption in their Asian markets alongside tougher market environments globally presenting the group with a number of hurdles to overcome," commented the Share Centre.
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Rentokil Initial, up 1.5%. The pest control company upped its dividend by 15% following a "strong" annual performance in which it beat revenue growth targets. Rentokil declared a final dividend of 3.64 pence per share, taking the total to 5.15p, just over 15% higher than the payout in 2018. The company swung to a pretax profit of GBP338.5 million, after a loss of GBP114.1 million in 2018. Rentokil's figure last year had been hit by a pension settlement worth nearly GBP350 million. Adjusted pretax profit was 11% higher at actual exchange rates, an 9.8% at constant currency, at GBP340.9 million. Rentokil achieved 9.8% revenue growth at actual exchange rates to GBP2.71 billion, with constant currency revenue growth 8.5%. Organic revenue growth was 4.5%, beating Rentokil's medium-term target of 3% to 4% annual organic growth. Looking ahead, Rentokil said it has made a "good" start to 2020, and it has maintained medium-term growth targets.
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FTSE 100 - LOSERS
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WPP, down 15%. The advertising firm posted a double-digit profit slump but said it has made "good progress" in its restructuring plan which it is now in its second year. From continuing operations, revenue for 2019 was up 1.4% to GBP13.23 billion from GBP13.05 billion, but pretax profit slumped 22% to GBP982 million from GBP1.26 billion. The profit hit was largely due to it booking a GBP68.4 million hit from the revaluation of financial instruments, compared to a GBP169.4 million gain in 2018. Billings meanwhile, slipped 0.3% to GBP53.06 billion GBP53.22 billion. Like-for-like billings were down 1.0% in 2019. The company held its dividend at 60.0 pence per share. For 2020, WPP expects revenue less pass-through costs to be flat year-on-year, although WPP said this guidance was made prior to any impact from the coronavirus outbreak. "After a year of consolidation and modest progress, 2020 was supposed to be the year when CEO Mark Read really started to deliver, joined by newly appointed finance chief John Rogers. He is off to a very ropey start after reporting that underlying revenue slumped rather alarmingly in the fourth quarter of last year. The best investors can hope for now is zero growth and maintained margins in 2020. The targets for 2021 have been maintained but the market's patience appears to have snapped," said AJ Bell's Russ Mould.
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Persimmon, down 5.0%. The housebuilder's annual profit missed market expectations, with revenue and new home sales declining as the group prioritised the quality of sales over quantity. Persimmon announced Chief Executive David Jenkinson will step down in due course, staying "for as long as the business requires". For 2019, Persimmon reported pretax profit of GBP1.04 billion, down 4.6% from the year before, on revenue that declined by 2.4% to GBP3.65 billion. During the year, Persimmon delivered 15,885 new homes to customers, down 4% from 16,449 the prior year, but at an average selling price of GBP215,709, up marginally year-on-year. The revenue decline was due to a lower volumes of homes sold, as Persimmon delayed sales releases in higher demand locations to later stages of construction in order to improve the quality of the group's homes.
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Standard Chartered, down 3.9%. The emerging markets-focused bank reported double-digit profit growth in 2019, but said it no longer expects to achieve its medium-term target next year amid slowing economic growth. StanChart said pretax profit for 2019 increased by 46% to USD3.71 billion from USD2.55 billion reported a year earlier, as operating income grew by 4% to USD15.42 billion from USD14.79 billion. Market consensus compiled by the company forecast pretax profit at USD3.94 billion on operating income of USD15.38 billion. Operating costs were reduced, meanwhile, by 6% to USD10.93 billion from USD11.65 billion a year ago. Standard Chartered declared a final dividend of 20 cents per share, resulting in a full-year dividend of 27 cents per share, up 29% on 2018's payout. Looking ahead, the bank said "external challenges" are expected to hurt its income growth in 2020, which is now likely to be lower than the 5% to 7% medium-term range previously guided by the bank. StanChart said it will therefore take longer to achieve its 10% RoTE target, which it previously anticipated it would achieve in 2021.
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FTSE 250 - WINNERS
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Hunting, up 4.0% at 303.20 pence. The oilfield services firm announced its first ever share buyback programme and said the outlook for 2020 remains uncertain due to commodity prices. Hunting said 2019 pretax profit declined 10% to USD93.1 million from USD104.0 million. Underlying earning before interest, tax, depreciation and amortization slipped 1.8% to USD139.7 million from USD142.3 million in 2018. Revenue was USD960.0 million, a 5.4% increase from USD911.4 million in 2018. The company declared final dividend of 6 cents per share, up 20% compared to 5 cents per share a year ago. Hunting announced what it said will be its first ever share buyback programme, of 2 million shares at an approximate cost of USD8 million. This implies a price of USD4 per share, or about 311 pence.
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FTSE 250 - LOSERS
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Aston Martin Lagonda, down 14%. The luxury carmaker confirmed details of its GBP500 million funding plan after enduring a torrid 2019 that brought wider losses. Aston Martin posted a pretax loss of GBP104.3 million for the year, widening from GBP68.2 million., while revenue in 2019 fell 9% on the year before to GBP997.3 million, with wholesale volumes also down 9%, to 5,862 units. Aston Martin is launching the DBX range of SUVs in February, with total orders now in excess of the planned retail target in 2020. Looking to 2020, sports car wholesales are expected to be "materially lower" than 2019 as the company focuses on reducing dealer inventories. Adjusted earnings before interest, tax, depreciation, and amortisation is seen "almost entirely" second-half weighted in 2020. Aston Martin has also warned on the impact of coronavirus, which could impact both the supply chain and customer demand in China, as well as other markets.
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Playtech, down 13%. The gambling and sports betting software firm warned the coronavirus outbreak is expected to hit results for 2020, as it reported a fall in profit for 2019 on impairments. Revenue for 2019 rose 23% to EUR1.51 billion, up 22% at constant currency. Adjusted earnings before interest, tax, depreciation and amortisation was up 11% to EUR383.1 million, but pretax profit slumped to EUR48.2 million from EUR187.7 million. Profit was hit by the impairment of intangible assets of the Markets and Alpha cash generating units, totalling EUR90.1 million. In addition, depreciation and amortisation costs grew to EUR215.7 million from EUR150.7 million. Turning to current trading, core B2B Gambling revenue was up 5% on a year ago for the first 55 days of 2020. Snaitech, its B2C business in Italy, has seen strong start to 2020, the firm said, though the coronavirus outbreak has hit recent trading. Asia revenue in February is expected to be EUR7 million due to Covid-19, said Playtech.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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