London shares start Tuesday in mixed mood with little substantial news driving them one way or another. The FTSE 100 eases a fraction lower to 6,517 with housebuilders among the main focal points.

Housebuilder Persimmon (PSN) says it is still too early to make meaningful predictions about the effect Brexit will have on housing demand, adding that trading through the first half had been 'strong.' Completions rose 6% to 7,238 and the average selling price went up by a similar amount to around £205,500, but investors remain concerned, marking the shares 3.5% lower to £13.85.

Affordable home builder MJ Gleeson (GLE), another to suffer heavy losses since the Brexit vote, recovers some of its losses, up 6.2% to 478p, as it says full year numbers for the year to 30 June will be ‘at the top end of estimates’.

‘The EU referendum has not affected our core customer base for whom the decision to become home owners is not influenced significantly by market or media sentiment,’ says chief executive Jolyon Harrison.

Budget airline Ryanair (RYA) edges a fraction up to €11.70 as it reports an 11% increase in traffic in June to 10.6 million customers.

In the same space, eastern Europe’s largest low-cost airline, Wizz Air (WIZZ), dips 2.6% to 43p as it too flags passenger numbers growth for June.


Civil engineer Balfour Beatty (BBY) slips 3.0% to 206p on downbeat sector sentiment despite the award of a £170 million contract to upgrade baggage screening and handling systems at Heathrow airport.

Microchips design firm Imagination Technologies (IMG) slides more than 9% as a beleaguered year to 30 April 2016 shows revenues far lower than anticipated prompting an expected but still damaging slump into the red. Sales bang on £120 million last year come in versus the £137 million or so of the consensus expectation.

Pubs operator Young’s & Co (YNGA:AIM) falls 1.5% to £12.00 as trading has slowed in the past six weeks. Like-for-like sales are up 4.1% over the past 13 weeks, but that compares with 5.3% growth in the first seven weeks of this period.

Fitness centres owner The Gym Group (GYM) retreats by 2.5% to 209.63p as chief operating officer Jim Graham hands in his notice. He is leaving to take up a job in private equity. The leisure group also says half year trading is in line with forecasts.

The Gym Group - Exercising

A host of domestic UK businesses provide encouraging trading updates though it fails to stem losses on the FTSE 250, down around 1.1%.

Employment and welfare to work agency Staffline (STAF:AIM), expected to be one of the biggest losers from Brexit, gains 2.1% to 817p after heavy losses in the past month. Staffline’s board ‘continues to view the group’s growth prospects positively’, according to a trading statement. There has been no immediate impact on its business following the vote, the company adds.

Logistics operator Connect (CNCT:AIM) is another business to gain on a trading update, up 2.5% to 144p. Revenue gained 2.1% in the 44 weeks to 2 July driven by 10% like-for-like growth in its Parcels Freight unit.

‘Whilst it is too early to make a medium term forecast of the implications from the recent UK vote to leave the European Union, the Group as a whole is predominantly UK centric and operates in large and resilient markets, with strong levels of free cash flow,’ says chief executive Mark Cashmore.

Sold down with other retailers following the shock Brexit vote, Superdry brand owner SuperGroup (SGP) rebounds 9p to £12.38 as Liberum Capital upgrades its rating from 'hold' to 'buy', arguing the shares are oversold, albeit sticking with its £15 price target.

Heading in the opposite direction is specialist retailer Pets at Home (PETS), 7.8% easier at 212p as the same broker switches its stance from 'buy' to 'sell' and slashes its price target from 335p to 200p, explaining heightened forecast risk is not discounted in the valuation.

Regeneration specialist St Modwen (SMP) falls 4.3% to 247.9p on adopting a more cautious approach to its development work following the EU referendum. This follows an interim period to 31 May where the residential and commercial property developer missed expectations by net asset value improving only 2% to 421p. This is the result of a write down at its New Covent Garden Market project and a £13 million stamp duty charge.

Issue Date: 05 Jul 2016