LONDON MARKET OPEN: Coca-Cola HBC Slumps After New Argen Sells Shares

LONDON (Alliance News) - Stocks in London opened lower Tuesday, with shares in Coca Cola HBC leading FTSE 100 fallers after Credit Suisse said it placed 5.4 million shares in London-listed bottler on behalf of a private equity vehicle.

The placing was initially announced on Monday by Credit Suisse, which acted as sole global coordinator and bookrunner. Following completion, the vehicle, New Argen Holdings, continues to hold 4.5 million shares in Coca-Cola HBC, representing 1.2% of its issued share capital.

The place at GBP13.15 per share raised GBP71 million. Early Tuesday, Coca-Cola HBC shares were down 3.7% to 1,315.00 pence.

At the other end of the blue-chip index, Kingfisher was the best of a handful of gainers, up 2.1%, after it reported growth in first quarter sales and said it is on track in the first year of its five-year plan.

The DIY retailer said total sales in the three months to April 30 grew by 5.1% to GBP2.72 billion on the same period the year before, as sales in France rose by 9.7%, sales in the UK & Ireland were up 1.3%, and other international sales increased by 6.0%.

Kingfisher said it is making progress with its operational milestones for the year, with its unified IT platform now in all B&Q stores and the set-up of its new offer and supply chain organisation well underway. Meanwhile, the planned closure of 15% of surplus B&Q space remains on track, with 40 of the 65 planned stores closed.

Severn Trent was another riser, up 0.5%. The UK water and wastewater company cut its annual dividend by 5.0% but said its reported profit and earnings soared during the past financial year, as it provided guidance for the year ahead.

Severn Trent said its underlying pretax profit, which excludes certain exceptional items, rose by 4.4% in the financial year to the end of March to GBP313.6 million from GBP300.4 million a year earlier. But reported pretax profit jumped to GBP322.3 million from GBP148.2 million, despite revenue declining 0.8% to GBP1.78 billion from GBP1.80 billion in the previous year.

The dividend for the full year was reduced to 80.66 pence per share, a 5.0% cut from 84.90p the year before but in line with the company's policy. Severn Trent said the dividend for the current fincial year will be 81.5p.

The FTSE 100 was down 0.3%, or 17.21 points, to 6,119.22. The mid-cap FTSE 250 index was down 0.4% at 16,961.99 and the AIM All-Share was up 0.1% at 731.70.

In Europe, the French CAC 40 was down 0.6% and the German DAX 30 was down 0.7%.

The German economy expanded at the fastest pace in two years in the first quarter, according to the quarterly national accounts from Destatis.

Gross domestic product climbed 0.7% sequentially, faster than the 0.3% rise seen in the fourth quarter. GDP climbed 1.3% on a yearly basis, weaker than the 2.1% expansion seen in the previous quarter.

On a calendar-adjusted basis, GDP growth improved to 1.6% year-on-year from 1.3%. The readings all confirmed the GDP growth figures released on May 13.

In Asia, the Japanese Nikkei 225 index ended down 0.9%, the Shanghai Composite fell 0.8%, and the Hang Seng in Hong Kong continues down 0.4%.

Entertainment One said its pretax profit and revenue grew in the year to the end of March, helped by a strong performance from its television and family divisions, which offset a weaker year for its film arm. The stock was down 7.0%, making it the worst performer in the FTSE 250, having risen 3.9% on Monday.

The film and television producer said pretax profit for the financial year to March 31 grew to GBP47.9 million from GBP44.0 million, helped by revenue rising to GBP802.7 million from GBP785.8 million. The group will pay a dividend for the year of 1.2 pence per share, up from 1.1p a year earlier.

Entertainment One said its television arm saw organic revenue grow 27% over the year. The film unit, however, saw revenue fall 7.0% over the course of the year, and Entertainment One has kicked off a restructuring process to trim GBP10.0 million in annual costs by the 2018 financial year from the film business.

Micro Focus International traded up 1.1% after the software group said it finished its financial year well and expects revenue and underlying earnings to be at the top end of its expectations.

Micro Focus said it expects to report that revenue for the year to the end of April grew at the top end of its previous guidance for the year, with revenue to come in around USD1.25 billion, down 1.6% from USD1.27 billion on a pro-forma basis for the year prior. Guidance had been for pro-forma revenue to decline by between 2.0% and 4.0%.

Micro Focus will publish its annual results on July 14.

Still ahead in the economic calendar, UK public sector borrowing is at 0930 BST and ZEW economic sentiment surveys for Germany and the eurozone are at 1000 BST. In the afternoon, US new home sales are at 1500 BST.

Bank of England Governor Mark Carney will appear with other members of the Monetary Policy Committee before the Treasury Select Committee at 1000 BST.

By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1

Copyright 2016 Alliance News Limited. All Rights Reserved.