FTSE closes lower on weak US opening and Centrica dividend cut
Source - SMW
The UK's FTSE 100 reversed earlier gains to close in the red after US stocks' weak opening left investors on the back foot. This ended a mixed day for UK investors after relatively upbeat quarterly results from BP were offset by hefty fallers, including Centrica, Fresnillo and Reckitt Benckiser.
At the close the FTSE 100 had declined 37.71 points, or 0.49%, at 7,648.90.
The pound continued to drop like a rock on concerns over a no-deal Brexit, giving up 0.43% against both the dollar and the euro.
LARGE AND MID CAP RISERS AND FALLERS
Centrica's shares plunged 19% to 73.56pp following a triple whammy of negative news.
The firm's chief executive Iain Conn is set to step down from his role after it reported an operating loss of £446m for the six months to 30 June, blaming an 'extremely challenging' market environment.
The company is also slashing its dividend to 1.5p per share, compared to 3.6p last year, and announced plans to sell its oil and gas production operations.
Reckitt Benckiser shares fell 3.2% to £64.57 as it cut its sales growth forecast following weaker than expected trading.
The firm revised its full year like for like revenue target to 2-3% after a flat first half of the year, hit by a slowdown in demand for its infant formula in the US and China, its biggest market.
BP rose 3.5% to 545.7p as its measure of net income beat market expectations.
Its underlying replacement cost profit - a closely watched measure to gauge performance - for the second quarter of 2019 was $2.8bn, little changed from the $2.82m a year earlier, as it was held back by lower oil prices.
But the figure was better than analysts expected, hence the share price rise.
Fresnillo tumbled 16.7% to 662p as it reported a fall in profits, following lower production and sales of gold and silver in the first half and a fall in metal prices which dented performance.
Gross profit and earnings (EBITDA) of US$205.5m and US$307.9m, were down 59.1% and 45.7%, respectively. Total revenues decreased 10.1% to US$1,069m in the half.
Anglo American dipped 1.3% to £20.885 after it said the value of rough diamond sales at its De Beers unit had decreased during the sixth cycle of 2019 to $250m from $391m seen in the fifth cycle.
The figure compared to $533m seen in the sixth cycle of 2018.
Greggs dropped 6.5% to £22.30 despite declaring a special dividend after reporting 'exceptionally strong' half-yearly performance as its new vegan-friendly sausage roll continued to rake in sales.
But the market was more concerned that Greggs said it warned on higher food input costs in the balance of the year, resulting in overall cost inflation being at the higher end of its expectations.
Convenience foods manufacturer Greencore shed 4% to 215.9p after analysts shaved full year profit forecasts following a mixed third quarter trading update that showed the food producer facing into a challenging UK grocery market.
Sanne, the alternative asset and corporate services specialist, rallied nearly 14% to 566p following yesterday's punishing profit warning, in which Sanne told the market it will miss full year expectations amid an operating margins squeeze.
SMALL CAP RISERS AND FALLERS
Cable assembly and power product provider Volex sparked up 5.5% to 91p after reporting a 12% hike in first quarter revenue that yielded an operating profit margin ahead of expectations. Volex also assured that its global footprint allows it to mitigate the effects of US tariffs on Chinese manufactured goods and flagged a number of new 'major contract wins' in its PVC power business.
Freight management firm Xpediator saw its share price collapse after warning that pre-tax profit for the year to 31 December is expected to be 'materially below market expectations' due to the loss of a large customer, investment in one of its warehouses and higher labour costs.
That dismal news sent the stock crashing nearly 40% to 31p.
Home safety products supplier FireAngel Safety Technology shed 13% to trade at 30p on the surprise news chief executive officer Neil Smith is leaving the company at the end of July.
At market close:
(LON:BP.) BP PLC share price was +16.2p at 543.2p
(LON:CNA) Centrica PLC share price was -17.26p at 73.58p
(LON:FRES) Fresnillo PLC share price was -141p at 653.6p
(LON:GRG) Greggs PLC share price was -148p at 2236p
(LON:RB.) Reckitt Benckiser Group PLC share price was -215p at 6455p