WINNERS & LOSERS SUMMARY: Sirius Minerals Sinks As It Pulls Note Issue

Tue, 6th Aug 2019 10:44

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

FTSE 100 - LOSERS

InterContinental Hotels Group, down 1.7%. The hotel owner reported a sharp rise in profit in the first half but warned of a "slower growth environment". In the six months to June 30, IHG's pretax profit jumped 25% to USD375 million from USD301 million the year before. The company's total revenue was up 8.1% to USD2.28 billion from USD2.11 billion the year before. InterContinental Hotels said group comparable revenue per available room in the first half increased 0.1%. In the Americas as a whole it also increased by 0.1%. It was flat, in the US, however, which was attributed to occupancy demand falling in the second quarter due to the higher comparative demand created by hurricanes in the first half of last year. In Greater China, however, comparable RevPar declined 0.3%. The decrease in China was attributed to a strong comparable from the year before.

Rolls-Royce Holdings, down 1.1%. The engine maker said it is making good progress on its operational problem as it reported solid interim revenue growth. Revenue for the six months to June climbed 5% to GBP7.88 billion, with the pretax loss shrinking to GBP791 million from GBP1.23 billion year-on-year. Organic revenue growth was 7%. Rolls-Royce's core underlying operating profit rose 22% to GBP203 million, and at a group level, was up 32%. The company has reiterated 2019 core underlying operating profit and free cash flow guidance of GBP700 million, plus or minus GBP100 million. In 2018, Rolls-Royce recorded core underlying operating profit of GBP616 million and free cash flow of GBP641 million. Rolls-Royce has had a number of operating problems recently, including faster-than-expected deterioration of its Trent 1000 TEN engine blades. Customer disruption "regretfully" is still ongoing, Rolls-Royce said, though progress is being made.

FTSE 250 - WINNERS

Rotork, up 8.2%. The company, which manufactures electric, pneumatic and hydraulic valves, expects further margin progression in 2019, as it posted a drop in first half revenue and profit mainly on stronger comparatives. "Whilst macroeconomic uncertainty remains, with recent order intake and the momentum of our Growth Acceleration Programme, we now expect to deliver flat sales on an organic constant currency basis in 2019, with full-year adjusted operating margins showing clear progress year-on-year," said Chief Executive Officer Kevin Hostetler. In 2018, organic constant currency revenue was up 11% and adjusted operating margins stood at 21.0%. Pretax profit was GBP52.2 million for the six months to June 30, down 4.5% from GBP54.7 million in the year-ago period, on revenue of GBP318.6 million and GBP331.0 million, respectively.

Meggitt, up 5.5%. The defence engineer upgraded its annual revenue guidance following a solid performance from core business in the first six months of the year. For 2019, Meggitt now sees organic revenue growth at between 4% to 6%, following better-than-expected interim trading and a strong order book. Revenue in 2018 was GBP2.08 billion. The firm is on track to achieve a margin improvement of zero to 50 basis points in 2019. For the first half of 2019, Meggitt's revenue growth was 12%, and 9% organically, to GBP1.07 billion, with orders rising 10% reported and 7% organically to GBP1.07 billion.

FTSE 250 - LOSERS

Sirius Minerals, down 19%. The firm, which is developing the Woodsmith polyhalite mine in Yorkshire, said it has suspended a USD500.0 million secured notes offering due to "current market conditions". Sirius announced the debt offering in July to secure funding for its polyhalite mine, and it was part of the second stage of financing for construction and development of the project. Sirius initially hoped to have the financing in place by the end of September. The other parts of the stage-two fundraising plan included a USD425.0 million equity raise, which was completed at a 32% discount, as well as USD400.0 million of bonds, which also has been completed.

Computacenter, down 3.5%. Berenberg cut the IT services firm to Hold from Buy.

OTHER MAIN MARKET AND AIM - WINNERS

Bluerock Diamonds, up 13%. The mining firm said it has signed a five-year mining services contract with Teichmann South Africa. BlueRock said it will need Teichmann South Africa's services in order to provide the quantity of ore necessary to meet production plans. The contract will see mining group Teichmann South Africa, which is part of the wider Teichmann Group, extract ore, break it down to the required size, and deliver it to the processing plant. BlueRock said it will pay Teichmann on a cost per tonne basis, unlike the contract with its last providers, whom it paid on an hourly basis. Based on the lower end of its production expectations, BlueRock estimates that for the period until June 2020, the costs for Teichmann South Africa's services will be GBP1.2 million.

Boohoo, up 3.3%. The online fashion retailer confirmed it has made a bid for the online businesses of Karen Millen and Coast. Boohoo made the statement in response to "recent media commentary", and did not give any financial details. Karen Millen, a women's fashion brand, has a presence across Europe, Asia, the US, and Australia, with stories in over 65 countries. Its flagship stores are on London's Regent Street and New York's Fifth Avenue. Coast's online operations are already owned by Karen Millen, as are UK concessions. However, standalone stores and mainland Europe concessions are not owned by Karen Millen. "The group believes the online business of these brands would represent highly complementary additions to its scalable multi-brand platform and extend the group's offer as part of its vision to lead the fashion e-commerce market globally," said boohoo.

OTHER MAIN MARKET AND AIM - LOSERS

Warpaint London, down 27%. The W7 makeup brand owner reported 3.1% growth in sales in the first half of 2019, but its profit was hurt by unfavourable exchange rates and increased investment costs. The cosmetics firm said it continues to see encouraging international sales growth, particular in the EU and the US, whilst challenging trading conditions remain in the UK. Warpaint said it anticipates sales in 2019 to be GBP50 million, up 3.1% from GBP48.5 million in 2018. However, the AIM-listed company noted that a number of factors, including the geographic mix of sales, adverse exchange rate movements, and its investment in future growth, particularly in the US, are hurting profitability in 2019. Consequently, Warpaint said it expects adjusted pretax profit for 2019 will be in the range of GBP6 million to GBP7 million. This excludes amortisation in connection with acquisitions, share incentive scheme costs and exceptional items, which is estimates to total GBP2.8 million.

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