The 100 FTSE fell 0.9% to 6,222.52 in early trading on Thursday as investors weighed up the impact of weak economic data seen yesterday and today’s corporate updates.
A number of stocks going ex-dividend, as always happens on a Thursday, was also a big contributor to the fall, with the likes of pharma giants AstraZeneca (AZN) and GlaxoSmithKline (GSK) and oil majors BP (BP.) and Royal Dutch Shell (RDSB) trading today without entitlement to their latest shareholder payouts.
TUI REVENUE PLUNGES AS IT GOES INTO ‘CRISIS MODE’
In today’s company news, tour operator TUI (TUI) fell 2.9% to 356.5p after it reported a whopping 98% drop in group revenues during the third quarter between April and June, due to the suspension of its business.
In its quarterly statement 1 October 2019 to 30 June 2020, the travel company said group revenue of €75 million during its third quarter reflected its business being at a ‘standstill’ for most of the period.
Hotel occupancy stood at 23%, while the company also reported an EBIT loss of €1.1 billion, with fixed costs reduced to around €237 million per month as the business moved into ‘crisis mode’.
But it added that since lockdown restrictions had eased, signs of customer demand were ‘encouraging’.
GVC PULLS DIVI, SWINGS TO PROFIT
Betting company GVC (GVC) dipped 1.15% to 776p as it pulled its interim dividend and swung to a first-half profit as strong online gaming revenue partly offset weakness in retail after the sports-betting company closed its outlets following government-imposed lockdown measures.
For the six months ended 30 June, the company reported a pre-tax profit of £55 million compared with a loss of £12.3 million a year ago, while revenue fell 10% to £1.58 billion.
Looking ahead, GVC said, barring no further material disruptions, it expected the deliver underlying earnings within a range of £720 million-£740 million for the full year.
JUST GROUP EXPECTS ‘SIGNIFICANTLY HIGHER’ SALES
Retirement products provider Just Group (JUST) soared 12.4% to 57.2p after it said it expected ‘significantly higher’ sales in the second half of the year after reporting that first-half profit more than doubled driven by investment and economic profits owing to the fall in interest rates.
For the six months to 30 June, pre-tax profit rose to £305 million from £125 million as revenue fell 11% to £1.8 billion.
Profit was also boosted by improved in-force return offsetting lower new business profit from reduced sales, the company said.
WATCHES OF SWITZERLAND SOARS ON RECORD SALES
Luxury watch retailer Watches of Switzerland (WOSG) soared 15.2% to 302p after it reported a record year of sales and profits in 2020, despite the coronavirus pandemic, and said trading in the first quarter of its 2021 financial year in the US and UK has exceeded expectations.
In its full-year results for the 52 weeks to 26 April 2020, the company saw group revenue climb 5.9% to £819.3 million, while adjusted EBITDA was at the top end of guidance, increasing 13.6% to £78.1 million.
In a trading update for the first quarter of 2021, the 13 weeks ending 26 July 2020, Watches of Switzerland reported that increased domestic demand had helped to offset a decline in tourism, with July sales up 7.4% on the prior year.
NATIONAL EXPRESS EARNINGS POSITIVE AFTER ‘SWIFT ACTION’
Bus and train company National Express (NEX) plunged 13.4% as it saw falls in revenue and posted an underlying pre-tax loss as Covid-19 caused passenger demand to tumble, but said that ‘swift and decisive’ action helped it remain EBITDA positive.
In its half-year results for the six months to 30 June, the company reported group revenue of £1.03 billion, down 22.7% on a year earlier but said it still secured 50% of revenue, despite passenger demand dropping 80% during lockdown.
National Express posted an underlying pre-tax loss of £60.7 million, down from £114.6m in the prior year period.
The company said while there were ‘encouraging early signs of demand’ as services gradually restarted, it warned that activity remained at ‘suppressed levels’.
PANDEMIC HITS RENISHAW PRODUCTS AND REGIONS
Engineering company Renishaw (RSW) tumbled 8.9% to £48.18 after it reported full-year revenue fell 11% and pre-tax profit halved last year as the coronavirus pandemic impacted most of its product lines and regions.
In its results for the year ended 30 June, the company announced revenue of £510.2 million, 11% lower on 2019, and said it was lower in all regions.
Adjusted pre-tax profit declined 53% to £48.6 million during the year, while Renishaw saw statutory profit plunge 97% to £3.2 million, down from £109.9 million in the previous year.
OTHER COMPANY NEWS
For the six months to 30 June, pre-tax losses widened to $83 million from $18.7 million the year before, while revenue rose 7% to $204 million. Revenue was boosted by continued growth in the number of sites and tenancies across the group.
Chemicals giant Croda International (CRDA) dipped 0.37% to £59.96 as it confirmed that, following approval from US regulators, it has completed the acquisition of Avanti Polar Lipids, a provider of drug delivery systems for next generation pharmaceuticals.
Promotional products marketer 4imprint (FOUR) fell 5.6% to £22.75 after it reported a slump in profit as the emergence of the coronavirus pandemic in the first half of the year caused an ‘unprecedented collapse’ in demand that ‘severely’ impacted performance.