UK WINNERS & LOSERS SUMMARY: Persimmon Leads Housebuilders Higher

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

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FTSE 100 - WINNERS

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Persimmon, up 5.6%. The housebuilder reported a strong start to the second half of 2020 but cut its interim dividend sharply, as performance was significantly hurt by the Covid-19 pandemic. For the six months to the end of June, pretax profit dropped by 43% to GBP292.4 million from GBP509.3 million the year before, as revenue declined by 32% to GBP1.19 billion from GBP1.75 billion. However, the group said its forward sales position increased to GBP2.48 billion from GBP2.05 billion. Persimmon declared a "modest" interim dividend of 40 pence per share, down 80% from 235p the prior year. Persimmon said its short-term outlook is robust and expects to deliver 45% of its anticipated new home legal completions for the second half. "The recovery in the UK housing market since lockdown eased has been remarkable. A mixture of pent-up demand and, for those with the means, an aspiration to add to living space or find a place with room for a home office after the experience of being stuck indoors for weeks on end will have supported the rebound," said AJ Bell's Russ Mould. Housebuilding peers Barratt Development, Taylor Wimpey and Berkeley were up 1.9%, 1.6% and 1.3%, respectively.

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FTSE 100 - LOSERS

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BHP Group, down 2.0%. The Anglo-Australian miner lowered its annual dividend, as profit and revenue declined on lower prices, the closure of mines and rehabilitation provisions, as a result of Covid-19. For the year to the end of June, pretax profit dropped by 10% to USD13.51 billion from USD15.05 billion the year before, as revenue declined by 4.3% to USD42.39 billion from USD44.29 billion. BHP's revenue performance came in short of company-compiled expectations, which had called for USD43.07 billion. BHP declared an annual dividend of 120 US cents, down 10% from 130 cents the year before. "The outlook heading into 2021 remains uncertain and could affect the business assumptions in place for a recovery dragging operational disruption further into 2021," said analysts at the Share Centre.

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FTSE 250 - WINNERS

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John Wood Group, up 8.5%. The oilfield services company declared no dividend for the first half of 2020, as profit fell below the USD1 million mark on reduced activity levels and a double-digit decline in revenue. For the six months to the end of June, the oilfield services company posted a pretax profit of around USD900,000, a sharp fall from USD62.2 million a year before. Before exceptional items, which including redundancy and restructuring costs, and an updated discount rate on an asbestos-related provision, pretax profit dropped by 60% to USD36.1 million from USD91.1 million. Revenue declined by 15% to USD4.09 billion from USD4.79 billion, as lower upstream and midstream activity was exacerbated by the Covid-19 crisis which mainly affected the second quarter of 2020. On a like-for-like basis, revenue still dropped by 12% to USD4.01 billion. Looking ahead, John Wood said it expects activities in chemicals & downstream and renewables to remain resilient, helping to mitigate challenges in the upstream and midstream businesses.

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FTSE 250 - LOSERS

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Capita, down 10%. The outsourcer endured a tough first half of 2020, as the impact of Covid-19, coupled with contract losses last year, weighed the company down. Capita swung to a pretax loss in the six months ended June 30 of GBP28.5 million from a profit of GBP31.2 million a year prior. Revenue for the half was down to GBP1.68 billion from GBP1.85 billion year on year. Covid-19's hit to revenue was mainly due to a decrease in transactional business and where client end-markets were severely affected, Capita said. Other hits to revenue came from the impact of contracts lost in the second half of 2019. Capita said it expects the impact of Covid-19 to delay its move into generating a sustainable free cash flow, which was the company's goal for this year. "The setbacks presented by the pandemic has meant that the expectations for a return to sustainable cashflow has been delayed by 1-2 years, sending the shares sharply lower in early trade," explained CMC Markets analyst Michael Hewson.

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Marks & Spencer, down 5.0%. The food, clothing and homewares retailer said total sales in its hard-hit clothing and home arm plunged 30% in the eight weeks since shops reopened, with store sales tumbling 48%, while online sales rose 39%. M&S said sales declines were improving but that it was "clear that there has been a material shift in trade". M&S announced that around 7,000 jobs are being axed as part of an effort to streamline the business. M&S expects a "significant" number of roles will be cut through voluntary departures and early retirement while it said it will also create some jobs through investing further in online warehousing and its new ambient food warehouse. "Sharpening the workforce and throwing weight behind the online business makes sense, the question now is whether M&S's digital dawn is simply breaking too late," commented Hargreaves Lansdown analysts.

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OTHER MAIN MARKET AND AIM - LOSERS

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Stobart Group, down 3.2%. The aviation and energy infrastructure group warned of possible redundancies following the announcement by easyJet that it will close its bases in the London Southend and London Stansted airports. The group said Stobart Aviation Services will be affected by the closures as it provides check-in and baggage handling services to easyJet at both airports. It also is the owner and operator of London Southend airport. easyJet will stop operations based from London Southend Airport on August 31, after which flights will be cancelled from September 1. easyJet had based four aircraft there, serving 21 destinations. Stobart remains confident in its balance sheet, liquidity position and medium-term opportunities for its London airport asset. easyJet shares were up 3.0%.

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By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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