WINNERS & LOSERS SUMMARY: Poundland Discounted As Sales Decline

LONDON (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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Johnson Matthey, up 8.8%. The specialty chemicals company said it will pay a special dividend to shareholders following the disposal of assets in the first half, as its pretax profit and revenue both rose despite mixed conditions in most of its markets, offset by a strong performance in its emission control unit. The group said it will pay an interim dividend of 19.5 pence per share, flat year-on-year, but said it also will pay a special dividend for the half of 150.0p, following the disposal of businesses during the half. The total distribution to shareholders from the special payout will be GBP305.0 million. Johnson Matthey said pretax profit for the six months to the end of September rose to GBP330.2 million, up from GBP207.8 million a year earlier, as revenue rose to GBP5.78 billion from GBP4.80 billion.

Royal Mail, up 5.9%. The postal operator said its pretax profit fell in the first half of its financial year due to an acceleration of its cost-cutting plans in the UK, though revenue also declined and the group reiterated its full-year performance, as in the past, would be heavily dependent on the Christmas period. The company said its pretax profit for the half year to September 27 fell to GBP116.0 million from GBP167.0 million in the half to September 28, 2014, mainly due to more costs being booked from its restructuring plan in the UK and reflecting a higher number of voluntary redundancies. Nearly 3,000 net employees let the company in the first half. Royal Mail said it will pay an interim dividend of 7.0 pence per share, up from 6.7p a year before.

CRH, up 5.6%. The Irish building materials company said it continues to expect its 2015 earnings to be well ahead of the previous year as it continued to deliver good sales growth in the first nine months. The group said total sales grew 16% year-on-year in the nine months to the end of September, though growth did slow to 14% in the third quarter. Europe sales growth for the third quarter was only 1.0%, amid mixed trading in the region, albeit with conditions stable overall. Sales growth continues to be driven by its Americas operation, CRH said, where third-quarter sales rose 23%, a slowdown from the 32% growth in the first half.
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FTSE 100 - LOSERS
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Vodafone, down 0.3%. The telecommunications company said it is planning to raise GBP500.0 million in new debt through the issue of new equity-linked bonds and the purchase of cash-settled call options to hedge the company's equity exposure resulting from the bond issue. Vodafone said that, as the conversion rights on the bonds will be cash-settled, the issue and conversion of the bonds will not result in the issue of any new Vodafone shares, meaning no dilution for shareholders.
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FTSE 250 - WINNERS
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QinetiQ Group, up 8.1%. The defence services company said it managed to deliver a solid set of interim results against a difficult market backdrop, as both profit and revenue increased but its order intake slumped. QinetiQ said its pretax profit for the half to the end of September was GBP48.3 million, up from GBP44.4 million a year before, as revenue rose to GBP370.9 million from GBP365.6 million. Amid an environment of tighter defence and security budgets, however, order intake in the half was down to GBP228.4 million from GBP320.5 million, though QinetiQ said this came against a tough prior-year comparison. The group said about two-thirds of the order intake decline was attributable to the timing of multi-year contract awards, and noted it secured a GBP153.0 million five-year contract renewal from the UK's Ministry of Defence post the end of the half.

Investec, up 4.2%. The Anglo-South African bank and asset manager reported higher first-half profit despite continued pressure from the weakness of the South African rand against its sterling reporting currency, as the financial services group highlighted the performance of its specialist banking business. It said that operating profit, which excludes the effects of goodwill, acquired intangibles, non-operating items and taxation and after other non-controlling interests, rose to GBP279.4 million in the six months to September 30 from GBP240.8 million the corresponding half the prior year. Investec lifted its interim dividend per share to 9.5 pence from 8.5p.

Electrocomponents, 4.0%. The components manufacturer and distributor said it has initiated a "major performance improvement plan" following what it called a "disappointing" performance in its first half, as it reported a drop in pretax profit. It reported a pretax profit of GBP19.9 million, down from GBP57.1 million a year before, as a rise in revenue to GBP626.5 million from GBP616.4 million a year before was offset by a GBP31.3 million write-down of new website costs. The company's previous year results were restated due to a change in the accounting recognition of vendor rebates. The company said that past investment has not delivered the expected step-up in revenue growth, and the company's results continued to be hit by a step-down in gross margin it saw in the third quarter of its previous financial year. As a result, it is putting in place a new strategy which it said will lead to "significant cost savings" in its current financial year and beyond.
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FTSE 250 - LOSERS
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Poundland Group, down 18%. The single-price discount retailer said pretax profit fell in the first half due to higher costs and said like-for-like also declined due in part to tough comparatives, though it said the acquisition of 99p Stores Ltd has progressed in line with its expectations. Poundland said its pretax profit for the 26 weeks to September 27 was GBP5.3 million, down from GBP9.3 million a year earlier, mostly due to exceptional distribution and administrative expenses it incurred in the half. Total revenue rose to GBP561.1 million, up from GBP528.2 million, with underlying sales rising 5.6% in constant currencies but like-for-like sales down 2.8%, compared to a 4.7% rise a year earlier. The group said it will pay an interim dividend of 1.65 pence per share, up from 1.50p a year earlier.

Bovis Homes Group, down 8.3%. The housebuilder warned its operating profit margin for the full year is likely to be only marginally ahead as its overall mix of homes it more weighted to existing sites than previously anticipated. The group said that following planning delays on a number of higher margin sites, its revenue mix will be weighted further towards existing sites than it had originally planned for. Bovis said delivering an increasing in production in the short-term remains constrained by a shortage of sub-contract labour, which has pushed up its costs, though this is showing signs of moderating. As a result of this revenue bias and the higher costs, the company expects its operating profit margin for the full year will only slightly improve on the 17.0% it delivered in 2014.
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MAIN MARKET AND AIM - WINNERS
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Crossrider, up 7.9%. The digital advertising company said it has put in place a USD6 million share buyback programme, representing around 5% of its issued share capital. Crossrider said that since it was admitted to AIM in September last year, its profitability has been in line with, or exceeded, market expectations. However its share price has fallen by around 50% since admission. The company said it continues to trade in line with expectations, and had net cash balances of USD74.9 million as of Monday.
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MAIN MARKET AND AIM - LOSERS
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Johnston Press, down 11%. The local media publisher said it expects its underlying profit and net debt for its current financial year to be in line with expectations. The company said its underlying revenue for the 17 weeks to the end of October fell 8.8%, accelerated from the 7.6% fall it reported for its second quarter, with an 8.4% rise in underlying digital revenue offset by a 10.8% reduction in publishing revenue and a 14.7% fall in print advertising revenue. Johnston Press said it has continued to focus on offsetting revenue declines with cost reduction, and said it has made good progress with controlling production, editorial and advertising costs in line with its strategic initiatives.
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By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance

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