UK WINNERS & LOSERS SUMMARY: Mondi Drags Paper Peers As Demand Weakens

(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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Antofagasta, up 2.7%, Anglo American, up 2.6%, Glencore, up 2.5%, Rio Tinto, up 1.7%, BHP, up 1.5%. "Miners were rallying ahead of the US-China trade talks with investors still clinging on to hopes of an amicable resolution," explained AJ Bell's Russ Mould. Ahead, Beijing's top trade envoy Liu He will meet US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin in Washington later on Thursday.

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FTSE 100 - LOSERS

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Barratt Developments, down 5.5%. The stock went ex-dividend meaning new buyers no longer qualify for the latest payout.

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Mondi, down 3.5%. The Anglo-South African paper and packaging company said underlying earnings for the third quarter of 2019 dropped due to softer demand and lower prices for the group's key paper grades. For the three months to the end of September, underlying earnings before interest, taxes, depreciation and amortisation dropped 18% to EUR383 million from EUR466 million the year before. Underlying Ebitda also was affected by a EUR40 million hit coming from planned mill maintenance shutdowns during the quarter. During the period, lower average selling prices compared to the highs at the end of 2018, as well as the expected lower gain on forestry fair value, more than offset the fruits of Mondi's product improvement initiatives. Like-for-like sales volumes were, on average, slightly lower than the prior year due to lower industrial bags and uncoated fine paper volumes, despite growth in corrugated packaging. Peers DS Smith and Smurfit Kappa were down 4.7% and 2.9% respectively.

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FTSE 250 - WINNERS

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Pennon Group, up 1.4%. Barclays raised the water utility to Overweight from Equal Weight.

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FTSE 250 - LOSERS

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Dunelm Group, down 6.5%. The homewares retailer said first quarter revenue rose year-on-year amid sharp growth in its online operations. Revenue in the 13 weeks to September 28 rose 5.8% to GBP262.6 million from GBP248.2 million last year. Not including GBP4.0 million in sales from Worldstores.co.uk and Kiddicare.com, however, websites that closed in the first quarter last year, revenue grew by 7.5% from GBP244.2 million. Dunelm also reported like-for-like sales growth of 6.4% year-on-year to GBP255.6 million from GBP240.2 million during the period. Store sales rose by 6.2% year-on-year on a like-for-like basis to GBP219.9 million from GBP213.7 million. In online alone, like-for-like sales surged by 35% to GBP35.7 million from GBP26.5 million. "The home furnishings chain defied retail gloom to post a series of positive trading updates earlier in 2019 but the stalling share price suggests the strong performance has already been priced in by the market," said Mould.

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OTHER MAIN MARKET AND AIM - WINNERS

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ProPhotonix, up 21%. The LED illumination system designer was awarded a five-year supply agreement from an unnamed Fortune 50 conglomerate. Under the agreement, ProPhotonix will supply custom LED illumination devices and maintenance products. The products are of a unique design, incorporating multi-wavelength configurations and automated software to control configuration of hardware deployment. Although the agreement does not require that the customer makes any purchases, ProPhotonix expects to make up to USD1.0 million per annum in revenue from the contract.

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OTHER MAIN MARKET AND AIM - LOSERS

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Castleton Technology, down 40%. The software and managed services provider warned revenue and adjusted earnings will be lower in the first half of its financial year than a year ago. Trading in the six months to September 30 has been behind expectations due to product and professional services revenue being lower than anticipated, Castleton said. As a result revenue, adjusted earnings before interest, taxes, depreciation and amortisation, and operating cash will be below last year. Castleton said it expects to have generated revenue of not less than GBP11.6 million and adjusted Ebitda of at least GBP2.9 million in the first half. In the first half of financial 2019, the company recorded revenue of GBP12.9 million and adjusted Ebitda of GBP3.0 million. Recurring revenue increased in the first half, but has not been enough to offset the fall in one-off revenue, Castleton said. Recurring revenue represented approximately 65% of total first half revenue.

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By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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