UK stocks push higher as Greggs, Safestore upgrade guidance

Mon, 10th May 2021

UK stocks opened modestly higher on Monday after corporate earnings upgrades, including from bakery chain Greggs, stoked confidence that the local economy was getting back on track. At 0820, the benchmark FTSE 100 index was up 8.09 points, or 0.1%, at 7,137.80. Greggs rallied 8.1% to £25.34, upgrading its outlook following a recovery in sales since Covid-19 restrictions were lifted in Britain last month. Greggs said its profit was likely to be 'materially higher' than its previous expectation, and could be around 2019 levels in the absence of further restrictions. Storage group Safestore firmed 4.6% to 910p as it, too, upgraded its annual earnings guidance, after its second-quarter revenue rose 11% amid an improvement in occupancy rates. Safestore's adjusted diluted EPRA earnings per share for the year through September was now expected at between 37p and 38p, up 23-26% year-on-year. Fancy chocolate maker Hotel Chocolat jumped 11% to 386p after it upgraded its annual guidance on the back of bumper Easter and Mother's Day sales. Safety company investor Marlowe gained 4.9% to 797.2p, having also guided for annual results to beat current market forecasts. Funeral services group Dignity declined 1.1% to 720.71p, even as it reported a 34% rise in first-quarter earnings following a higher-than-expected number of deaths owing to Covid-19. Dignity said the number of deaths in the three months to 26 March grew 27% to 204,000 -- though since the end of the quarter, deaths had fallen below the five-year average. British gas owner Centrica softened 0.3% to 57.68p, on reporting that the pandemic was still hurting, with first-quarter electricity demand from UK business customers down around 15%. Centrica said its turnaround plans were nevertheless on track and it stuck to its previous cost cutting guidance. Plastics producer Victrex advanced 6.3% to £25.12, even as it reported a 7% fall in first-half profit, as margins were pressured, and said it expected a weaker second half. On a positive note, Victrex declared an interim dividend of 13.42p per share, compared to zero payout a year earlier, while stating that its dividends had returned to pre-Covid levels. Subprime lender Provident Financial fell 2.2% to 252.4pp as it swung to a £113.5 million full-year loss and said it had decided to close its doorstop lending unit. Provident Financial said the troubled home credit business would either be placed into managed run-off or sold. Pharmaceutical services company Open Orphan firmed 2.9% to 38.85p after it had signed a contract worth £3 million with Imperial College London to manufacture a SARS-CoV-2 challenge virus. Story provided by StockMarketWire.com

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