UK WINNERS & LOSERS SUMMARY: SIG Sinks After Another Profit Warning

(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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Tesco, up 2.0%. The supermarket chain's sales in its UK & Ireland region rose over the Christmas period, but total group sales fell amid sharp declines in Central Europe, where it is restructuring. In the six weeks to January 4, total UK & Republic of Ireland sales edged up 0.2% and rose 0.4% on a like-for-like basis, excluding fuel. Total group sales fell by 1.7%, however, and by 0.8% on a like-for-like basis. Over the 19 weeks, the UK & Ireland unit was again the best performing division, registering 0.2% sales growth to GBP16.81 billion, and a 0.4% like-for-like rise. Central Europe sales fell by 14% to GBP1.93 billion in the 19 weeks. The decline was stemmed at 10% on a like-for-like basis. "Considering the difficulty supermarkets are currently facing, as indicated by Marks & Spencer's figures, these results go to show Tesco is still one of the leading figures in the industry. The Booker acquisition is generating strong growth in a difficult environment and an area the group is actively looking to improve moving forward, which should be promising news for investors," said analysts at the Share Centre.

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FTSE 250 - WINNERS

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Galliford Try, up 11%. The construction firm said it entered the new year with a "high-quality" order book following the disposal of Linden Homes and Partnerships & Regeneration divisions. Last week Galliford completed disposal of its Linden Homes and Partnerships & Regeneration divisions to Bovis Homes, which changed its name to Vistry Group after the deal. In a trading update for the half year ended December 31, Galliford said it began the new year with an order book of GBP3.2 billion, and secured contract wins including appointment to the YORCivil four-year civil engineering framework with Sheffield City Council, in South Yorkshire, England. The company said its underlying construction business has continued to perform in line with management expectations for the financial year ending June 30, 2020.

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Mitchells & Butlers, up 3.3%. The restaurant and pub operator reported a strong festive period performance, with food in particular doing well. In the seven weeks to January 4, Mitchells & Butlers achieved 3.5% like-for-like sales growth. Food was 4.0% higher, and drink 2.7% higher. For the seven weeks to November 16, like-for-like sales growth came in at 1.4%. Food like-for-like sales grew by 1.7%, and drink by 0.7%. Overall, for the 14 weeks to January 4, Mitchells & Butlers's like-for-like sales growth was 2.6%. Food, once again, was the stronger performer with 3.0% growth, and drink was 1.8% higher. The company's total sales for its year so far have grown by 2.7%. Its current financial year ends late September.

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FTSE 250 - LOSERS

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SIG, down 20%. The building products supplier guided for a substantial drop in profit for 2019, amid challenging market conditions and declining revenue. SIG bemoaned tough market conditions, as the group reported an ongoing deterioration in the level of construction activity in key markets, and indications of further weakening - mainly in the UK. There is additional challenges in sustaining sales rates, and profit protection measures implemented by SIG set to mainly take effect in 2020, not 2019 as previously expected. As a result, underlying pretax profit for 2019 is expected to be GBP42 million, a 44% decrease from GBP75.3 million the year before. For 2019, like-for-like revenue declined by 6.1%, as like-for-like revenue from UK & Ireland dropped by 16%, more than offsetting like-for-like revenue growth of 1.2% from Mainland Europe. SIG had previously warned on annual profit amid deteriorating trading conditions in October.

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Marks & Spencer, down 10%. The food, clothing and homewares retailer said its performance over the third quarter, which includes the pivotal Christmas period, improved on a like-for-like basis, but total sales slipped as declines in its struggling Clothing & Home unit continued. In the 13 weeks to December 28, total UK sales were down 0.6% year-on-year to GBP2.77 billion, but on a like-for-like basis edged 0.2% higher. Including its international unit, total sales were 0.7% lower at GBP3.02 billion. The international unit had a 2.3% sales fall to GBP251 million. The troubled clothing unit saw a 3.7% sales fall to GBP1.06 billion and on a like-for-like basis, sales declined by 1.7%. "There may be an element of profit-taking behind the fall in Marks' shares this morning but more likely it was because shareholders have perhaps lost faith in the retailer’s ability to truly turnaround its fortunes. Perhaps in the long-run, Marks would be better served concentrating on its food business, where it is still a force to be reckoned with. The joint-venture with Ocado should cement its position in that market further," said eToro analyst Adam Vettese. Blue-chip peer Next was down 1.0%.

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Tullow Oil, down 3.5%. Barclays cut the oil and gas company to Equal Weight from Overweight.

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OTHER MAIN MARKET AND AIM - WINNERS

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Liontrust Asset Management, up 4.7%. The asset manager said its performance improved over the past quarter and in its financial year to-date. Liontrust said assets under management were GBP19.1 billion as at December 31, up from GBP14.65 billion reported on October 1, and GBP11.2 billion a year ago. The fund manager reported net inflows over the three months to the end of December of GBP836 million, almost doubled from GBP471 million for the same period a year ago. For the first nine months of Liontrust's financial year ending March 31, net inflows grew to GBP2.20 billion compared to GBP1.19 billion a year earlier. Market and investment performance added GBP887 million in the third quarter and GBP1.51 billion in the nine months, while the acquisition of a global equity team added GBP2.73 billion to both time periods.

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OTHER MAIN MARKET AND AIM - LOSERS

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Card Factory, down 23%. The greeting cards retailer reported a "challenging" Christmas period and said it expects a full-year earnings fall as a result. Revenue in the 11 months to December 31 was up 3.6%, improving from 3.4% growth over the same period a year earlier, but like-for-like sales declined by 0.6%. Over the same period in 2019, like-for-like sales were down by 0.1%. After the tough Christmas period, the company said it expects adjusted underlying earnings before interest, tax, depreciation and amortisation, also excluding IFRS 16 adjustments, to be in the range of GBP81.0 million and GBP83.0 million in the current financial year. This could represent of a decline of as much as 9.4% from GBP89.4 million last year. Looking further ahead to financial 2021, Card Factory said its adjusted underlying Ebitda could take a hit of up to GBP10 million, amid more declines in high street footfall and a depressed pound.

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By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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