(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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Next, up 12%. The clothing retailer reported a rise in full-year sales, helped by double-digit growth in its online unit but said that, due to the Covid-19 health crisis, it will not declare a final payout but will instead propose a second interim dividend in June. The retailer said its current plan is to declare an interim payout of 116.5 pence per share. Earlier in January, Next made a first interim payout of 57.5p per share, a 4.5% year-on-year rise. Pretax profit during the recent year rose 2.0% to GBP748.5 million from GBP733.6 million. Excluding IFRS 16, an accounting rule governing the financial treatment of leases, pretax profit edged 0.8% higher to GBP728.5 million from GBP722.9 million. Next, which carried a detailed "stress test" on the effect of the virus outbreak, warned that its full-year sales could fall by as much as 25%.
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FTSE 100 - LOSERS
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Meggitt, down 9.1%. The aerospace and defence contractor said it is too early to give any annual financial guidance, though performance so far this year has met expectations. Meggitt said that despite a "rapidly changing" environment, trading in January and February met expectations. A full update on first-quarter 2020 trading will be unveiled on April 23. Christchurch, Dorset-based Meggitt said the outlook in the near-term for its products is uncertain, but it has in place plans to reduce costs and protect liquidity in the coming months. As it noted in annual results issued in late February, as of December 31 Meggitt had net debt including leases of GBP911 million. It had GBP1.56 billion of committed facilities, giving GBP806 million of headroom. Meggitt also confirmed it is working with a consortium of other UK aerospace suppliers to develop and produce "in large volumes" a ventilator, at the request of the UK government.
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Ocado, down 6.9%. The online grocer said it has had to take a number of actions, including closing its website, as people turn to online shopping amid the Covid-19 pandemic. In the 13 weeks to March 1, Ocado Retail, the online supermarket's joint venture with Marks & Spencer Group, delivered 10% retail revenue growth to GBP441.2 million, meeting expectations. Average orders per week rose 10% to 343,000 and the average order size was 0.3% higher at GBP110.24. Since late February, however, there has been a surge in demand and an increased basket size as customers change shopping habits amid Covid-19. To cope with the demand, Ocado has had to take a number of measures including stopping registration for new customers, installing queueing on the website, and closing temporarily its mobile phone app. Guidance for Ocado Retail in the firm's year ending December 1 is unchanged at retail revenue growth of 10% to 15%. However, Ocado has assumed a lot of forward buying has occurred and that "there may be further disruptions ahead".
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Burberry, down 3.2%. The luxury retailer said its sales have "deteriorated" sharply over the past six weeks due to the Covid-19 pandemic. Comparable retail stores sales are tracking between 40% and 50% lower since January 24, Burberry explained. Back in February, Burberry reported 24 of its 64 stores on the Chinese mainland were closed, with the remaining stores experiencing a significant decline in footfall. Burberry said on Thursday: "While trading in mainland China has started to improve with the reopening of most of our stores, sales in Europe, the Middle East, India, and Africa and the Americas have fallen materially in recent weeks. More than 60% of our stores in EMEIA and around 85% of our stores in the Americas are currently closed with those still open operating with reduced hours and with very weak footfall." Burberry warned that its fourth quarter comparable retail stores sales will fall 30% year-on-year, with the final weeks of the 12 months to the end of March seeing a slump of as much as 80%.
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FTSE 250 - WINNERS
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Elementis shares more than doubled to 45.24 pence. The chemicals firm decided against paying its final dividend for 2019 as it looks to preserve cash for Covid-19. London-based Elementis declared a final dividend for 2019 of 4.4487 pence per share at the time of 2019 results early in March. At the same time, it reported a 6.7% fall in pretax profit despite revenue climbing over 6%, due to higher finance costs and a loss on a disposal. However, the company has decided not to pay this dividend, which it said will save it USD33 million in cash. Future dividend decisions will be made "as and when conditions normalise". Elementis stressed it has "very ample" liquidity, with over USD300 million available immediately if necessary. Total net debt as of December 31 was USD454 million. It has secured a relaxation of banking covenants, to 3.75 times net debt to earnings before interest, tax, depreciation, and amortisation from 3.25 times before. This applies to tests due on June 31 and December 31. The firm said trading up to March 18 had been "solid", with a limited impact from Covid-19 on production and demand. However, the outbreak is providing significant uncertainty going forward.
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Sanne, up 17%. The trust and fund administration services provider reported double-digit revenue growth but saw profit fall on one-off costs. In 2019, revenue rose 16% to GBP165.4 million from GBP143.0 million, though pretax profit fell 44% to GBP13.3 million from GBP23.7 million. Sanne reported non-underlying items of GBP29.2 million, up 54% from the year prior. Before underlying items, pretax profit was 0.3% lower at GBP42.4 million. Sanne raised its full-year dividend by 2.2% to 14.1 pence per share from 13.8p. Sanne said it is yet to see any "material impact" in its business from the outbreak of the virus, but added it is "monitoring the situation".
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FTSE 250 - LOSERS
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Crest Nicholson, down 21%. The housebuilder said it has cancelled its 21.8 pence per share final dividend and is suspending all financial guidance until the impact of the Covid-19 spread "becomes clearer". Crest said that although the measures are "significant steps to take", it is a prudent move amid the "unprecedented and unpredictable situation". Crest Nicholson said it has moved to fully draw a GBP250 million credit facility, which would leave the company with available cash of GBP185 million. "The executive leadership team has also moved quickly in identifying further measures that will increase cash generation, and reduce cash outflow, enabling the business to trade through this period of prolonged uncertainty," Crest Nicholson said.
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OTHER MAIN MARKET AND AIM - WINNERS
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BATM Advanced Communications, up 50%. The company said it has entered into a collaboration with Novamed, an Israeli life sciences company, for the joint development and marketing of a rapid testing kit for home use for diagnosing Covid-19. BATM added that it is starting to ship its new diagnostic kit for Covid-19 that was developed by Adaltis for use by medical facilities. "The initial customers are European, with delivery to Italy being the current focus. The group is preparing to ramp up production by the end of next week to meet existing orders and anticipated demand. All clinical testing to date has demonstrated the excellent performance of this kit, which provides results in under one hour on COVID-19 and other variants of coronavirus," said BATM.
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By Lucy Heming;Â lucyheming@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
Burberry (BRBY)
Crest Nicholson (CRST)
Ocado (OCDO)
Batm Advanced (BVC)
Next (NXT)
Elementis (ELM)