UK WINNERS & LOSERS SUMMARY: OneSavings Bank Surges As Profit Jumps

Thu, 27th Aug 2020 11:10

(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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WPP, up 5.0%. The ad agency said it will pay a dividend despite posting a drop in advertising income during the Covid-19 pandemic. For the six months ended June 30, WPP posted a pretax loss of GBP2.58 billion, swinging from a profit of GBP409 million a year prior. This was as revenue fell 12% year-on-year to GBP5.58 billion from GBP6.37 billion and WPP took a GBP2.5 billion impairment of goodwill. An interim dividend of 10.0p was declared, down 56% from 22.7p a year before. WPP said it has decided to review its dividend policy "in the context of our overall capital allocation priorities". WPP had suspended its dividend and GBP950 million share buyback in March. WPP added that its share buyback was under review, but it intended to restart it once the current environment had stabilised.

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FTSE 100 - LOSERS

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Rolls-Royce, down 8.7%. The jet engine maker reported a hefty underlying loss for the first half of 2020 amid severe damage to the civil aviation sector by the Covid-19 pandemic. For the half-year ended June 30, revenue fell 26% to GBP5.82 billion from GBP7.88 billion last year, and on a reported basis its pretax loss widened to GBP5.4 billion from a loss of GBP791 million last year. Rolls-Royce said it suffered free cash outflow of GBP2.8 billion, "deteriorated" from a GBP429 million outflow last year. It expects another GBP1 billion in cash outflow in the second half, meaning GBP4 billion for the year as a whole. "The smoke signals from Rolls-Royce have been fairly clear - it needs to do something to prop up its balance sheet and market speculation has long pointed towards a very large equity raise," said AJ Bell's Russ Mould.

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Homeserve, down 4.0%. Morgan Stanley downgraded the home emergency cover provider to Equal Weight from Overweight.

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Persimmon, down 3.8%. The stock went ex-dividend meaning new buyers no longer qualify for the latest payout.

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HSBC Holdings, down 3.5%. The Asia-focused bank was slammed by US Secretary of State Mike Pompeo on Wednesday over reports it had frozen access to credit card and bank accounts for executives of pro-democracy independent media group Next Media. Pompeo accused HSBC of bowing to Chinese pressure amid Beijing's imposition of a draconian security law on Hong Kong.

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FTSE 250 - WINNERS

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OneSavings Bank, up 17%. The challenger bank reported loan book growth in its first-half, also posting a near double-digit profit climb despite chunky impairment costs. Net loans at June 30 stood at GBP18.8 billion, a 2% rise from GBP18.4 billion at the end of 2019. Gross new organic lending surged 29% annually to GBP2.1 billion from GBP1.6 billion. The buy-to-let loan book climbed 5% to GBP4.98 billion. This was despite "reduced activity" in the UK mortgage sector due to the Covid-19 lockdown for most of the second quarter. Net interest income during the half climbed 55% year-on-year to GBP233.8 million from GBP150.5 million, helping push pretax profit up 9.7% to GBP99.3 million from GBP90.5 million. Profit growth came despite impairments of financial assets climbing almost tenfold to GBP54.2 million from GBP5.9 million.

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Grafton Group, up 5.8%. The building materials firm decided to pay no dividend for the first half of 2020, as profit fell sharply on declining revenue from all of its businesses except for the Netherlands due to the Covid-19 pandemic. For the six months to the end of June, pretax profit dropped by 76% to GBP20.5 million from GBP84.4 million a year before, on revenue that declined by 29% year-on-year to GBP1.06 billion from GBP1.48 billion. Grafton will not pay an interim dividend, compared to the 6.5 pence per share payout made the year before. However, the Dublin-based company said it will consider whether it will pay the suspended second interim dividend for 2019, and a full payout for 2020. Based on current trends, Grafton expects its adjusted operating profit for the second half of 2020 to be similar to that for the same period the year before.

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FTSE 250 - LOSERS

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Bodycote, down 3.0%. The stock went ex-dividend.

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By Arvind Bhunjun; arvindbhunjun@alliancenews.com