14th Apr 2016 11:02
LONDON (Alliance News) - Individual company news was at the forefront of market activity in London Thursday, with FTSE 100 luxury stock Burberry slumping after predicting a challenging year ahead and FTSE 250 film and television producer Entertainment One jumping after it denied receiving a takeover approach from ITV.
Meanwhile, the Bank of England's Monetary Policy Committee voted unanimously to keep UK interest rates unchanged at 0.5%.
The blue-chip FTSE 100 index was down 0.1%, or 3.16 points, to 6,359.73. The mid-cap FTSE 250 was down 0.2% to 17,011.23, and the AIM All-Share was up 0.1% to 732.16.
In Europe, the CAC 40 index in Paris was down 0.1% and the DAX 30 in Frankfurt was up 0.1%.
US futures pointed to a lower open in New York. The Dow 30, S&P 500 and Nasdaq 100 indices were all indicated down 0.1%.
In the US corporate calendar, there are first-quarter results from banks Wells Fargo and Bank of America, with BofA reporting an 18% decline in earnings and 6.7% slide in revenue from a year before. However, BofA's earnings per share beat expectations.
On the London Stock Exchange, Burberry Group was the biggest faller in the FTSE 100, down 6.7% as the luxury coats and bags retailer reporting deteriorating sales over the course of the past six months and warned of a challenging demand environment for its new financial year.
Burberry said the outlook for the current financial year, to the end of March 2017, looks challenging, with underlying cost inflation pressures on the business still significant.
Wholesale revenue is expected to fall further in the first half due to tighter inventory controls among US customers and cautious ordering in other regions, Burberry said, while Japanese licensing revenue will continue to decline as licences expire.
Due to this, Burberry said it expects adjusted pretax profit for 2017 to be at the low end of analyst expectations, even including a potential benefit from foreign exchange, based on current rates.
Persimmon also was amongst the worst large-cap performers, down 4.2%. The housebuilder reported a strong start to 2016, with private sales rates and average selling prices continuing to rise, but noted UK planning delays are "hindering the drive" to boost house volumes.
The group said total forward sales revenue in the first 15 weeks of 2016, including legal completions taken so far this year, are up 8.0% at GBP2.15 billion, compared with GBP2.00 billion in the year earlier period.
"We remain cautious on valuation and as we expect margins to peak as selling price inflation moderates and build cost inflation persists," said investment bank Liberum.
Persimmon's results also hurt shares of peers Berkeley Group, down 3.5%, Barratt Developments, down 2.1%, and Taylor Wimpey, down 1.3%.
In the FTSE 250, Entertainment One's share price was up 16%. The Canada-based entertainment company said it has received "no approach", following a report from the Financial Times that ITV is understood to be eyeing a takeover bid for the film and television producer.
The FT report, citing people familiar with the matter, said ITV has held early talks with Entertainment One, the owner of the Peppa Pig franchise, about a potential deal, though no decision has been taken yet. ITV shares were up 1.3%.
Recruiter Hays said its net fee income grew in the third quarter despite a slowdown in activity in the UK & Ireland. Hays said its total net fee income for the third quarter to the end of March grew 5.0% year-on-year and was up 4.0% on a like-for-like, constant currency basis. The stock traded up 8.9%.
In economic news, euro area consumer prices were unchanged in March after a decline in the previous month, revised data from Eurostat showed.
The consumer price index showed no change from a year ago, following a 0.2% drop in February. The headline inflation initially reported for March was a 0.1% fall.
Headline inflation has been below the European Central Bank's target of 'below, but close to 2%' since early 2013.
Still ahead in the economic calendar, the US consumer price index is at 1330 BST, together with US initial and continuing jobless claims.
By Neil Thakrar; [email protected]; @NeilThakrar1
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
BurberryBerkeley GroupEntertainment OneHaysBarratt DevelopmentsPersimmonTaylor WimpeyITV