UK WINNERS & LOSERS SUMMARY: Kainos Surges On Positive Outlook

Wed, 14th Oct 2020 11:07

(Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Wednesday.

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FTSE 100 - WINNERS

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Just Eat Takeaway.com, up 5.5%. The online takeout platform said order growth accelerated in the third quarter, leading to a widening gap to its competition in key countries, including the UK and Canada. The coronavirus pandemic and the resultant movement restrictions has led to a sharp rise in online food orders, benefiting online takeaway platforms such as Just Eat Takeaway.com. Just Eat Takeaway.com said 46% more orders were placed in the third quarter of 2020 than a year earlier, due to strong demand in online orders as a result of coronavirus social distancing measures in restaurants. Order growth accelerated from an increase of 32% in the first half of 2020, with orders in the third quarter up 47% in Germany on a year before, 98% in Canada and 43% in the UK. Total orders for the quarter stood at 151.4 million versus 103.6 million a year ago. Year-to-date order growth was 37% at 408.3 million.

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Bunzl, up 5.0%. The distribution and outsourcing company said continued growth in the sales of Covid-19 related products, such as masks and sanitisers, offset a drop in sales of other products during the third quarter of 2020. The company also said it expects revenue in the second half of 2020 to grow strongly at constant exchange rates and a slightly higher second-half operating profit margin compared to the prior year, reflecting the year-to-date performance and recent acquisitions. Bunzl recorded 4% growth in third-quarter reported revenue and 8.0% growth in underlying revenue at constant exchange rates, reflecting continued growth in the sale of Covid-19 personal protective equipment. Bunzl recently completed the acquisition of Abco Kovex, a distributor of flexible packaging based in Ireland with revenue of EUR23 million.

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DCC, up 3.0%. Credit Suisse raised the Irish support services firm to Outperform from Neutral.

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FTSE 100 - LOSERS

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Pearson, down 1.5%. The education publisher said it has seen a decline in sales every quarter this year, with the second quarter taking the biggest knock but the third quarter seeing improvement. Pearson said that for the first nine months of the year group sales declined by 14%, reflecting the impact of Covid-19. The second quarter was hit hardest, with sales shrinking by 28%. The third quarter saw sales shrink by 10%, showing an improving trend. The company said it is seeing a strong performance in Global Online Learning, which grew 14% due to a 41% growth in enrolment for virtual schools. Global Assessment sales fell by 19%, due to the impact of test centre closures, but this was in line with expectations. North American Courseware sales declined 14% with higher-priced package and print sales taking a knock. This was also in line with the company's expectations.

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FTSE 250 - WINNERS

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Kainos, up 28%. The IT services provider said it expects annual results to beat market consensus. A "structural shift of digital adoption" was one of the keys to "very strong" trading since its current financial year kicked off on April 1, Kainos said. Digital Services clients have continued "to prioritise digital transformation programmes in the NHS and public sector", Kainos said, noting that it is a "trusted partner" of the UK government. One-off cost cuts have been implemented, including reduced recruitment and travel spend. "We therefore expect results for the full year ending March 31, 2021 to be materially ahead of current consensus of revenue and significantly ahead of adjusted profit forecasts," Kainos predicted.

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Synthomer, up 17%. The speciality chemical company said it saw strong trading across all three business divisions in the third quarter of 2020 leading to it reinstating an interim dividend. Synthomer also raised 2020's earnings before interest, tax, depreciation and amortisation guidance by 10% to GBP232 million from GBP211 million announced in August. Synthomer has decided to reinstate its interim dividend which was suspended in April, declaring an interim dividend of 3.0 pence per share, up from nothing a year prior.

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FTSE 250 - LOSERS

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FirstGroup, down 6.5%. The transport operator was downgraded to Hold from Buy by HSBC. Peer Stagecoach was raised to Buy from Hold by HSBC and was trading up 0.7%.

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Cineworld Group, down 6.0%. The UK-based cinema chain was suffering from a negative read-across after US rival AMC warned it could run out of cash by the end of the year or by early 2021 if moviegoers don't return to theatres in greater numbers. AMC owns Odeon in the UK, and its shares closed down 13% on Tuesday in New York.

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OTHER MAIN MARKET AND AIM - WINNERS

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International Personal Finance, up 13%. The lender said it has returned to profitability in the third quarter of 2020, driven by continued positive momentum in operational performance. The home credit business said that collections effectiveness has improved to 95% of pre-Covid expectations. The relaxation of credit settings resulted in a 55% increase in credit issued compared to the quarter prior. IPF's "robust" collections performance, the effective management of credit issued, the impact of cost reductions and the receipt of GBP45 million in respect of the finalisation of a Polish tax dispute resulted in net cash-flow generation of GBP143 million during the quarter. The company is in a strong capital and short-term liquidity position with GBP348 million in cash headroom.

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OTHER MAIN MARKET AND AIM - LOSERS

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ASOS, down 8.3%. The online fashion retailer said annual profit multiplied and its revenue jumped almost 20%, the online retailer said on Wednesday, as it shrugged off "performance issues" from last year. But despite the boom in earnings, the company kept a lid on expectations for the new year and beyond, owing to economic uncertainty, particularly affecting its target market of young adults. ASOS said pretax profit in the year that ended August 31 multiplied to GBP142.1 million from GBP33.1 million. About GBP50 million in a "non-strategic" costs were not repeated in the most recent financial year, ASOS noted, as an efficiency drive "exceeded our initial expectations". The company added it has made a "solid start" to the new year but is tempering expectations for now given the uncertainty caused by Covid-19 and the "economic prospects and lifestyles of 20-somethings" being set for disruption.

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By Arvind Bhunjun; arvindbhunjun@alliancenews.com