22nd Oct 2019 08:45
(Alliance News) - Stock prices in London opened mixed on Tuesday with Reckitt Benckiser the worst blue-chip performer after the consumer goods firm cut its annual sales guidance amid a "'disappointing" performance.
The FTSE 100 stock index was down 4.13 points, 0.1%, at 7,159.51. The FTSE 250 was flat at 20,308.14, and the AIM All-Share was 0.1% higher at 885.99.
The Cboe UK 100 index was flat at 12,151.82. The Cboe UK 250 was 0.1% higher at 18,274.85, and the Cboe UK Small Companies was flat at 11,113.59.
In mainland Europe, the CAC 40 equity index in Paris was flat and the DAX 30 in Frankfurt was up 0.2% in early trading.
In the FTSE 100, St James's Place was up 1.0% after the wealth manager reported a rise in closing funds under management in the third quarter following strong net inflows to its Pension funds.
At September 30, the firm recorded GBP112.82 billion in funds under management, 3.2% higher than the GBP109.32 billion reported three months earlier. Year on year, St James's Place funds under management are 12% higher.
In the third quarter, the wealth manager recorded GBP2.11 billion net inflows, with GBP1.48 billion of that coming from the company's Pension funds. Investment funds added GBP190 million in net inflows with Unit Trust, ISA & Discretionary Fund Management contributing net inflows of GBP620 million.
The fund manager added that it is well placed to continue to grow over the medium to long-term.
Whitbread was up 0.9% after the Premier Inn hotel chain owner held its dividend steady Tuesday despite a drop in interim profit.
Whitbread proposed a 32.7 pence per share interim dividend, unchanged on a year prior.
For the six months ended August 29, pretax profit narrowed 7.1% to GBP219.9 million from GBP236.8 million the year prior. This was despite revenue rising marginally to GBP1.08 billion.
Profit performance was hurt by operating costs rising 7.3% to GBP825.5 million from GBP769.3 million the year before, representing charges related to the sale of the Costa Coffee chain to Coca-Cola, which completed in January.
Interactive Investor's Richard Hunter said: "The company retains a robust balance sheet, underpinned by a strong property portfolio. This year's shareholder returns have been largely boosted by the Costa disposal, as opposed to a dividend yield of 2.4%, which is less of an attraction to income-seekers.
"While the company is clearly open to cyclical swings, it nonetheless remains well-positioned to benefit from any economic uptick, however difficult that may be to see at the current time. In addition, a continued focus on costs and streamlining should leave the company in better shape to weather the challenges ahead, while the introduction of 'Premier Plus' rooms is an interesting development."
Reckitt Benckiser was down 5.5% after cutting its annual net revenue growth target to a range between 0% to 2%, down from its previous target of 2% to 3%.
Reckitt said this was "reflecting the reduction in retailer inventory levels of seasonal products in the third quarter and the inherent uncertainties of the season and associated stocking". In addition, the health products and household goods maker expects a modest decline in annual adjusted operating margins.
Chief Executive Officer Laxman Narasimhan said: "RB's performance in the third quarter was disappointing. We delivered another quarter of consistent growth in Hygiene Home. Our Health business, despite good market growth and stable consumer offtake, delivered a weak net revenue performance. This was primarily due to issues in the US and China."
TUI was down 5.3% after Morgan Stanley downgraded the Anglo-German travel operator to Equal Weight from Overweight.
Bunzl was down 3.5%. The distribution firm said underlying revenue growth continued to slow in tough markets.
For the three months ended September, revenue grew 4% on a reported basis with constant-currency growth of 0.5%. Underlying revenue was 1% lower after adjusting for the contribution of acquisition activity.
The lower underlying revenue "primarily reflects the previously announced lower sales to a large grocery customer in North America due to account specific product specification changes and price deflation," Bunzl said in its statement.
In China, the Shanghai Composite index closed up 0.5%, while the Hang Seng index in Hong Kong was up 0.3%. Markets in Japan were closed for a public holiday.
The pound was quoted at USD1.2957 early Tuesday, lower than USD1.2982 at the London equities close Monday.
UK Prime Minister Boris Johnson is urging MPs to back his Brexit deal as he launches a final bid to force through legislation in time for the UK to leave the EU with an agreement on October 31.
Ministers have insisted they are confident they have the numbers to get the Withdrawal Agreement Bill through the Commons, despite their defeat in Saturday's special sitting.
However they face a fierce parliamentary struggle after announcing plans to fast-track it through the lower House in three days, potentially paving the way for the Lords to consider it over the weekend.
They will need MPs to approve a "programme motion" setting out the timetable for its passage through the Commons, setting up a crunch vote on Tuesday evening.
Failure to get the motion through would open up the prospect that Johnson will be forced to accept another lengthy delay to Britain's departure from the bloc.
The economic calendar on Tuesday has UK public sector net borrowing at 0930 BST and US existing home sales at 1500 BST.
By Arvind Bhunjun; [email protected]
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