The FTSE 100 fell 0.79% to 5,965 by lunchtime on Thursday, weighed down by supermarket chain Morrisons (MRW) and British Airways owner International Consolidated Airlines (IAG) as the cost of the coronavirus pandemic became clearer.

Also weighing on sentiment was news that Prime Minister Boris Johnson’s plans to implement mass Covid-19 testing, which would see millions of people tested daily and has been dubbed by Johnson as ‘Operation Moonshoot’, will cost £100 billion according to a leaked memo seen by the British Medical Journal.

MORRISON’S COVID COSTS, IAG LOOKS TO RAISE €2.7BN

In its interim results for the half year to 2 August 2020, the supermarket chain Morrison (MRW) reported group like-for-like (LFL) sales ex-fuel/ex-VAT were up 8.8%, to £7.6 billion while total revenues were down 1.1% to £8.7 billion, impacted by low fuel demand during lockdown.

Pre-tax profit fell 25.3% to £148 million after absorbing Covid-19 costs of £62 million partly offset by £93 million of lower business rates.

The retailer confirmed it would pay a 2020/21 interim ordinary dividend of 2.04p per share, up 5.7%, which it said reflected the strong first-half trading performance and confident outlook, but that it had deferred another final special dividend relating to the second half of 2019-20 due to the uncertainty around the future impact of Covid-19.

The shares slumped 3.16% to 188.84p.

British-Airways parent company International Consolidated Airlines Group (IAG) said it had received shareholder backing to raise gross proceeds of €2.74 billion through the issuance of 2.98 shares in IAG at €0.92 a share, representing a 35.9% discount to the theoretical ex-rights price based on closing price of the shares on 9 September 2020.

The group trimmed its forecasts for capacity as ongoing travel restrictions weighed on booking activity. For 2021 capacity is expected to decline by 27% compared to 2019, a worse outcome than previously planned.  The shares dropped 1.22% to 197.95p.

DIXONS MULLS NORDIC SALE

On the rise were shares in electronics retailer Dixons Carphone (DC.) up 5.56% to 86.45p after it reported a rise in sales and said it was considering selling the stake in its Nordics business.

In an annual general meeting statement the company said like-for-like sales rose 14% on-year, led by a 124% increase in online sales, for the 15 weeks to the end of August.

Shares in fantasy miniatures company Games Workshop (GAW) raced 8.19% ahead to £94.40 after it said trading for the three-months to 30 August was ahead of the board’s expectations. The board also declared 50 pence per share dividend in-line with the group’s policy to distribute ‘truly surplus cash’.

Leading homewares retailer Dunelm (DNLM) reported sales down 4% to £1.1 billion for the year ended 27 June 2020 and pre-tax profit 13.3% lower to £109 million.

Strong trading in July and August saw year-on-year sales growth of 59% and 24% respectively reflecting pent-up demand and the timing of the summer sale. The group anticipates declaring an interim dividend in the current financial year assuming no further material impact from Covid-19.

The shares tumbled 6.08% to £13.74.

RANK RE-OPENING

Shares in bingo and casinos company Rank Group (RNK) pushed 0.96 higher to 125.8p after it said it had seen encouraging progress since re-opening with Grosvenor revenues running at 60% of prior year in-line with expectations.

In its preliminary results for the 12 months to 30 June 2020, revenues fell 15% to £585 million led by venues underlying net gaming revenue which was down 22% to £439.8 million, offset by digital underlying net gaming revenue, up 23% to £145.3 million. Underlying operating profits fell 32% to £51 million.

Music rights fund Hipgnosis Songs (SONG) announced the purchase of Big Deal Music, boutique song company that owns copyright interests in global hit songs. Hipgnosis will issue 17.6 million new shares at 120.65p to pay for the deal. The shares drifted up 0.2% to 122.24p.

Listed infrastructure investment company International Public Partnerships (INPP) raised its dividend and reported a fall in first-half profit as a decrease in the value of its portfolio dented net assets.

For the six months to 30 June, pre-tax profit fell to £35.4 million from £83.7 million on-year as net asset value per share fell to 149.2 pence from 150.6 pence reported at the end of December 2019. The shares gained 0.58% to 161.93p.

COVID TEST SUCCESS

Shares in engineering products for critical applications company TT Electronics (TTG) surged 36.84% higher to 260p after announcing a ‘ground-breaking’ Covid-19 screening device.

Chief executive Richard Tyson commented: ‘Virolens has the potential to be a major step forward in dealing with the impact of the COVID-19 pandemic, by allowing safer access to places of work, transport and events. TT’s leading-edge products and flexible manufacturing capabilities provide significant support to critical aspects of the Virolens device.’

Games developer Team17 (TM17:AIM) fell 1.43% to 688p even as it reported record first-half revenues and pre-tax profits to 30 June 2020 both up 28% to £38.8 million and £13,3 million respectively. This resulted from strong trading during lockdown from multi-player and online games.

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Issue Date: 10 Sep 2020