UK WINNERS & LOSERS SUMMARY: Carnival Shares Slip Amid Fundraise

(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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Royal Dutch Shell 'A', up 8.6%, Shell 'B' up 8.0%, BP up 6.0%. The oil majors were tracking spot oil prices higher, quoted at USD26.92 a barrel Thursday morning from USD25.38 late Wednesday. Oil prices rose on hopes for a US intervention to end a Saudi-Russia price war amid the escalating coronavirus pandemic. US President Donald Trump said he will meet US energy executives this week to discuss plummeting oil values. AxiCorp market analyst Stephen Innes said the meeting is "presumably to discuss possible coordinated production curtailment measures in an attempt to buy some time for the struggling US shale industry." Midcap oil stocks Cairn Energy, John Wood and Energean Oil & Gas were up 9.9%, 7.5% and 5.8% respectively.

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FTSE 100 - LOSERS

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Carnival, down 6.5%. The cruise line operator reduced the size of a share placing but said a note offering has been upscaled. Carnival has been hit by the Covid-19 pandemic, with port restrictions around the world forcing the company to halt cruise operations and offer refunds to customers. Carnival will be offering 62.5 million shares at USD8.00 each. This will raise USD500 million approximately, but Carnival had previously said it would be offering USD1.25 billion worth of stock. In a separate announcement, Carnival said it will be offering USD4 billion worth of senior secured notes, rather than USD3 billion planned before. "Investors brave enough to back the fundraising might think they are getting a bargain, yet Carnival is ploughing through cash at a high rate. The prospectus for the fundraising says it needs USD1 billion a month to cover operating costs, cash refunds of customer deposits, servicing debt and some other factors. That implies it needs life to return to normal by autumn otherwise it could be asking investors for even more money," AJ Bell's Russ Mould said.

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Centrica, down 5.0%. The British Gas parent cancelled the planned final dividend for 2019 amid the chaos caused by Covid-19. Centrica in February declared a 3.5 pence per share final dividend for 2019. The annual total was 5.0p, rebased from 12.0p last summer. However, the company will no longer be paying that final return. This, it said, is a "prudent" decision given the financial impact of Covid-19. Centrica said it is difficult to quantify exactly how big that impact will be. It has identified GBP400 million of spending reductions including halting all non-essential costs and delaying capital and infrastructure projects. Additionally, the sale of oil & gas business Spirit Energy has been paused until financial and commodity markets have "settled", Centrica added.

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Rolls-Royce Holdings, down 4.9%. UBS downgraded the jet engine maker to Neutral from Buy.

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FTSE 250 - LOSERS

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Bakkavor, down 8.0%. The fresh food producer pulled its final dividend and said it will furlough staff as the Covid-19 pandemic has battered sales. Bakkavor said the early part of its financial year, which began on December 29, had been "encouraging". Since then, the virus outbreak created "significant operational challenges", first in China, and then in the UK and US. In the UK, where Bakkavor generates 90% of its adjusted earnings before interest, tax, depreciation and amortisation, the virus crisis has hit all of its divisions, with salads and food-to-go products suffering particularly. In the US, orders also have fallen, but in China they have stabilised. Bakkavor said it has frozen all non-essential capital expenditure in a bid to control costs. Among its cost savings is the withdrawal of its final dividend.

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Hays, down 7.2% at 101.60p. The recruiter warned its full-year profit will lag market consensus, as it ditched its interim dividend and resorted to a GBP200 million share placing to shore up its finances. Trading between January 1 and March 31 was in line with expectations, Hays said, with net fees were down by about 5% on a like-for-like basis. Hays expects its operating profit for the year to June 30 to be "materially below" the GBP190 million consensus average compiled by Bloomberg. The company also cancelled its 1.11 pence per share interim dividend, saving it GBP16.3 million. Hays will look to raise GBP200 million through a share placing. This represents about 12% of existing shares based on the closing share price of 109p on Wednesday, Hays said.

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By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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