28th Apr 2020 10:59
(Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Tuesday.
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FTSE 100 - LOSERS
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Bunzl, down 2.0%. UBS downgraded the distribution firm to Sell from Neutral.
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BP, down 1.5%. The oil major reported a sharp drop in first-quarter earnings as the oil and gas industry suffers from supply and demand shocks "on a scale never seen before". For the quarter ended March 31, underlying replacement cost profit - BP's preferred metric - was USD0.8 billion, down 67% from USD2.4 billion for the same period a year earlier. The result, BP said, reflected lower prices, sharply lower demand in the Downstream unit particularly in March, a lower estimated result from Russian partner Rosneft, and a lower contribution from oil trading. BP swung to a replacement cost loss of USD0.6 billion from USD2.1 billion profit in the first quarter of 2019. BP said it was dealing with an "exceptionally challenging environment" and "demand destruction". Looking ahead, BP is expecting "material impacts from Covid-19" in the second quarter.
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J Sainsbury, down 1.4%. Berenberg double downgraded the supermarket chain to Sell from Buy.
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HSBC Holdings, down 1.0%. The Asia-focused lender reported a sharp drop in first-quarter profit as it upped its expected credit loss in the face of the Covid-19 pandemic. For 2019, HSBC reported pretax profit of USD13.34 billion. As a result, HSBC has been forced to up its expected credit loss by USD3.03 billion in the first quarter, from USD585 million a year before. For the three months ended March, pretax profit dropped 48% to USD3.23 billion from USD6.21 billion a year prior. The figure missed the first-quarter company-compiled consensus estimate of USD3.66 billion. "Ultimately HSBC is going to see profits slump, its transformation plan delayed and a group of very angry shareholders who are being denied a dividend while the value of their stock also falls. It’s an uncomfortable situation but not one that is unique to the bank," said AJ Bell's Russ Mould.
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FTSE 250 - WINNERS
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Games Workshop, up 11%. The wargames manufacturer said it has commenced a phased re-opening of its business, though it still expects lower profits for its current financial year. The company said that, following the suspension of all its operations in March, it will start making trade sales in Europe and North America this week and online orders from May 1. Games Workshop noted that while the majority of its stores remain closed, a small number have re-opened in China, the Netherlands and Scandinavia. It added that it will continue to re-open stores across the world as local restrictions are lifted. The company said that while trading for the nine months to the end of February was in line with expectations, the closure of its operations globally has resulted in it lowering its annual earnings expectations. Pretax profit for its financial year to the end of May is expected to be no less than GBP70 million. For comparison, pretax profit for financial 2019 was GBP81.3 million, so financial 2020 profit is expected to be down as much as 14%.
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Royal Mail, up 5.5%. Citigroup double upgraded the postal operator to Buy from Sell.
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GVC Holdings, up 2.4%. The gambling firm said it has secured a new GBP535 million revolving credit facility with its existing lenders. GVC said the new facility is on the same terms as its previous revolving credit facility except for a revised covenant limit. The covenant of net debt to earnings before interest, tax, depreciation, and amortization will be measured on a trailing 12-month pre IFRS-16 basis only if the facility is drawn by more than 35% at a quarter-end, GVC said. IFRS-16 is an accounting rule governing the financial treatment of leases. GVC added that for the quarter-ends until September 30, 2021, the covenant limit will be no more than six times net debt to Ebitda. After that, the limit will return to four times net debt to Ebitda. GVC said the facility is currently undrawn. As at the end of March, it had accessible cash of over GBP350 million.
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By Arvind Bhunjun; [email protected]
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