12th Feb 2020 10:36
(Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Wednesday.
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FTSE 100 - WINNERS
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Anglo American, up 1.8%. The miner was raised to Neutral from Sell.
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Rio Tinto, up 1.7%. The Anglo-Australian miner said it will conduct a strategic review of its ISAL aluminium smelter in Iceland to assess its "ongoing viability". Rio warned ISAL is likely to struggle in the near future as it's faced with tough conditions in the aluminium market. Production at ISAL has already been reduced by 85%, Rio Tinto said. The review of the operation is expected to be complete in the first half of 2020.
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FTSE 250 - WINNERS
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Dunelm Group, up 9.9%. The home furnishings retailer said interim profit rose substantially on solid revenue growth, lifting its outlook as a result. For the six months ended December 28, the Syston-based retailer reported a pretax profit of GBP83.6 million, up 19% from GBP70.0 million the same period a year before. Revenue, meanwhile, grew by 6.0% year-on-year to GBP585.0 million from GBP555.8 million, and rose by 5.6% on a like-for-like basis. Like-for-like sales from stores rose by 2.0%, while online like-for-like sales rose by 33%. Dunelm declared an interim dividend of 8.0 pence per share, up 6.7% from 7.5p the prior year. Dunelm said its third quarter started well and expects annual pretax profit to be ahead of analyst expectations, which range from GBP135.0 million to GBP137.3 million. "From an investment perspective, Dunelm is very attractive: it's some distance ahead of its rivals, is showing strong signs of growth, is rapidly expanding its digital capability, has good short-to-medium term prospects and has just announced a healthy special dividend," eToro analyst Adam Vettese said.
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Plus500, up 3.5%. The contact-for-difference provider reported a sharp drop in earnings in 2019, but noted that performance improved in the second half due to "increased trading opportunities identified by customers" and more volatile market conditions. Pretax profit was USD189.3 million in 2019, down from USD503.0 million in 2018. Revenue was USD354.5 million, down from USD720.4 million. Plus500 said the first half of 2019 was hurt by "extremely low volatility" in the first quarter. However, strong second half of the year was "mainly driven by increased trading opportunities identified by customers, reflecting more volatile market conditions during the rest of the year." In another statement, Plus500 said it plans a new share buyback programme for up to an additional USD30.0 million of the company's shares, following the completion of the USD50.0 million buyback programme announced back in August.
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Greencore Group, up 3.0%. The sandwich maker was raised to Buy from Hold by Berenberg.
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FTSE 250 - LOSERS
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Babcock International, down 5.0%. The defence contractor edged its profit guidance slightly lower, and added it expects a GBP85 million one-off hit from its oil and gas business. The oil and gas unit is part of Babcock's Aviation division, which it announced it would restructure "in response to current trading". For the year ending March, the company now expects underlying operating profit at around GBP540 million, which would represent an 8.2% decline from GBP588.4 million the year prior. Babcock's previous guidance for financial 2020 was for operating profit in the range of GBP540 million and GBP560 million. The company held its forecast for underlying revenue of roughly GBP4.9 billion, which would reflect a 5.1% year-on-year decline from GBP5.16 billion. Trading in the Aviation unit during the first nine months of Babcock's financial year was mixed, with challenges in southern Europe and in the oil and gas business offsetting "good performances" in the UK and internationally.
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TalkTalk Telecom Group, down 1.5%. UBS cut the home phone and broadband provider to Sell from Neutral.
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OTHER MAIN MARKET AND AIM - WINNERS
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Itaconix, up 17%. The specialty polymers firm signed new license and supply agreements with New Wave Global Services, a North American detergent supplier. The company said the licensing agreement is for a new dishwashing detergent formulation, based on the new Itaconix TSI322 detergent polymer. In December 2018, Itaconix had announced a license agreement with New Wave for a new triple-chamber dishwashing detergent pod based on Itaconix CHT122. "The new formulation offers New Wave additional competitive advantages available with Itaconix TSI322," the company said. The roll out is expected "later in 2020," the company noted. Meanwhile the supply agreement is to support the growth in the company's polymer volumes used in New Wave products, Itaconix said.
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OTHER MAIN MARKET AND AIM - LOSERS
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Scapa Group, down 31%. The adhesive products manufacturer warned its annual trading profit will be below market expectations, tumbling more than 20% from the prior year's levels. Revenue for the year ending March 31 is expected to be broadly in line with market expectations at GBP306 million, though this would represent a 1.9% decline from GBP311.8 million. Trading profit will come in at GBP28 million, "significantly below consensus", Scapa cautioned, and 27% lower than the GBP38.2 million from the year prior. Promisingly for Scapa however, Healthcare unit revenue will be "slightly ahead of market expectations", at GBP139 million, and will grow year-on-year despite the loss of a contract with wound dressings maker ConvaTec Group. Scapa expects to report its full-year results on May 19.
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United Carpets, down 17%. The carpet retailer said there was no boost to trading conditions following the UK general election in December, and added that its like-for-like sales have fallen over the past eight weeks. United Carpets said it experienced "comparatively poor" trading in the quarter leading up to Christmas, and added the market environment "has continued to be challenging". Like-for-like sales in the eight weeks since December 20, when it announced its interim results, have slipped 5.7%. For the year ending March 31, United Carpets expects pretax profit in the range of GBP150,000 and GBP200,000. Not only is this below market forecasts of GBP500,000, it would also be less than half the GBP590,000 achieved in financial 2019.
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By Arvind Bhunjun; [email protected]
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BabcockAnglo AmericanRio TintoSCPA.LPlus500DunelmTALK.LGreencoreUCG.L