23rd May 2019 08:34
LONDON (Alliance News) - London stocks started Thursday's session on the back foot following declines in the US and Asia overnight, with the pound also trending lower as pressure mounts on Theresa May to resign as UK prime minister. Intertek was among the worst performers in the FTSE 100 index in early dealings, while the FTSE 250 was lower despite solid gains for QinetiQ and Serco.The FTSE 100 was down 45.64 points, or 0.6%, at 7,288.55 early Thursday. The mid-cap FTSE 250 was down 193.79 points, or 1.0%, at 19,113.48. The AIM All-Share was down 0.4% at 962.37.The Cboe UK 100 index was down 0.8% at 12,354.51. The Cboe UK 250 was down 1.0% at 17,202.32, with the Cboe UK Small Companies flat at 11,798.99.The lower open comes after downbeat sessions in the US and Asia, noted Michael van Dulken at Accendo Markets, "where fresh trade war concerns ramped up bearish bets".Stocks in Asia declined overnight, with the Japanese Nikkei 225 index ending down 0.7%. In China, the Shanghai Composite finished down 1.4%, while the Hang Seng index in Hong Kong is down 1.9%.In focus on Thursday are developments in Westminster, the Accendo Markets analyst added."May's position on Brexit, and thus in No 10, looking increasingly untenable as European elections kick off," commented van Dulken.The pound overnight declined after Commons Leader Andrea Leadsom quit the Cabinet over May's Brexit plan.Leadsom resigned with a "heavy heart", saying she no longer believes the UK government's approach will deliver on the referendum result to leave the EU.The prime minister will meet Graham Brady, the representative of Tory backbench MPs, on Friday for a meeting which could seal her fate. She has previously agreed to set out the timetable for the contest to replace her after a crunch vote on her Brexit deal, widely expected on June 7.That deadline appears to have been brought forward with the announcement she will meet Brady, chairman of the backbench 1922 Committee, the day after polling day for the European elections, which are expected to be disastrous for the Conservatives.In European equities, the CAC 40 in Paris and the DAX 30 in Frankfurt were down 0.9% and 1.0% respectively. Intertek was down 2.8% despite saying revenue growth in the first four months of 2019 had been "good", with the safety-testing firm on track to deliver margin expansion and strong cash flow.For the four months ended April, revenue grew 7.3% to GBP924.3 million from GBP861.2 million the year prior. At constant currency, this represented a 5.3% advance on the year prior.Excluding acquisitions, organic revenue grew 5.3% on a reported and 3.3% on a constant currency basis. Defence firm QinetiQ climbed 8.7% after raising its dividend amid strong annual revenue growth alongside a healthy order book.For the year ended March, pretax profit narrowed 15% to GBP123.2 million from GBP144.8 million the year prior. This was despite revenue growing 9.4% to GBP911.1 million from GBP833.0 million the year before."This has been an excellent year with strong operational performance," QinetiQ Chief Executive Officer Steve Wadey said.During the year, QinetiQ secured GBP776.4 million in new orders compared to GBP587.2 million during the year prior. This helped take its order backlog 56% higher to GBP3.13 billion from GBP2.01 billion the year before.Serco was up 8.1% after the outsourcer said it will raise around GBP130 million to fund its acquisition of Alion Science & Technology Corp's Naval Systems Business Unit.Serco is paying USD225 million for the Alion division, which will be part-funded by a share placing. Serco plans to place up to 111.2 million shares - representing up to 10% of its existing share cpaital - via an accelerated bookbuild.The Naval Systems Business Unit is a provider of naval design, systems engineering and production and lifecycle support services to the US an Canadian navies and the US Army.Mediclinic International was down 4.6% as the company continued to suffers losses despite revenue growth. Revenue for the 12 months to March rose 2% to GBP2.93 billion, and climbed 4% at constant currency rates.Mediclinic's pretax loss was GBP137 million, narrowed from a GBP479 million pretax loss the year before. Adjusted earnings before interest, tax, depreciation, and amortisation fell 4% to GBP493 million, and were down 2% in constant currency.Mediclinic's Swiss business Hirslanden reported a 10% drop in adjusted Ebitda to CHF285 million, or GBP223.6 million. Revenue rose 2% to CHF1.78 billion."Over the course of the last 18 months, all Swiss hospital operators have been affected by rapidly implemented regulatory changes related to outpatient tariff reductions and outmigration of care," said Chief Executive Ronnie van der Merwe.Elsewhere on the Main Market, LondonMetric Property said it has agreed a cash-and-shares takeover of A&J Mucklow, in a deal which values A&J Mucklow at nearly GBP415 million. LondonMetric has agreed to exchange 2.19 new LondonMetric shares plus 204.5p in cash for each A&J Mucklow share, valuing A&J Mucklow shares at 655.2p each. This represents a 20% premium to A&J Mucklow's closing price on Wednesday.A&J Mucklow shares were up 18% to 645.50p on Thursday, while LondonMetric was up 0.7% at 207.20p.The combined group will be a "larger and more resilient company", with gross property assets of GBP2.3 billion.Separately, LondonMetric announced its results on Thursday, with EPRA net asset value per share up to 174.9p as at the end of March from 165.2p a year before.The economic events calendar on Thursday has manufacturing and services PMI figures the eurozone at 0900 BST.