UK share markets dropped sharply for the second day running on Thursday as the latest round of corporate earnings reports underlined the hit from the Covid-19 pandemic, with lender Non-Standard Finance (NSF) crashing after warning of going concern risks.

The benchmark FTSE 100 fell 1.3% and the mid-cap FTSE 250 1.4%, tracking a slide in global equity markets on fears of more disruptions to business activity as cases of the novel coronavirus continued to surge.

Battered automotive, travel & leisure and banking stocks sectors bore the brunt of the declines, posting falls of up to 4.3%, although water group United Utilities (UU.) gave up the biggest margin individually, losing close on 4% at 917.7p.

Consumer lender Non-Standard Finance was a particularly ugly performer on Thursday, tumbling 27% to a near-record low of 8.38p after saying the coronavirus crisis had halted lending. That compounded the firm’s woes after its failed attempt to gain scale by buying rival Provident Financial (PFD).

LOW-FLYING EASYJET

Low-budget air carrier EazyJet (EZJ) slumped nearly 7% to 690.2p a day after reporting a bigger loss for the first half of the year due to the pandemic. It said on Thursday it had raised $520 million through a share placing to shore up liquidity.

Struggling postal service Royal Mail (RMG) was also under substantial pressure in early trade after reporting continued falls in annual revenue and profits. Shares in the business lost 6.6% to 168p on the figures despite news that it is planning to shed 2,000 management jobs in a bid to address the ‘immediate impact’ of Covid-19.

Royal Mail reported that pre-tax profits to 29 March fell 25% to £180 million, while the company also admitted that to lower revenue for the first two months of the current year.

The company announced a three-step plan which is expected to result in a £130 million saving in people costs next year and flat non-people costs, along with a reduction of around £300 million in capex across the group over the next two years.

Defence firm BAE Systems (BA.) failed to buck the weak trend despite saying that it expected a ‘much stronger’ performance in the second half of the year after the impact of the pandemic dented first half profit.

BAE shares dipped roughly 1% to 476.3p.

AUTO TRADER HOPEFUL

Auto Trader (AUTO) declined 2.6% to 512.2p after it reported an uptick in profit but said the short-term outlook remained uncertain despite an initial bounce back in used car demand since its retailers resumed operations.

Estate agent Savills (SVS) slid 3.5% to 801.8p after a trading update in which it reported that Covid-19 has had a significant impact on global real estate market volumes.

The company said that group full year performance will depend on the extent to which regional transactional markets recover in the second half.

Chemicals company Johnson Matthey (JMAT) was 2% lower at £20.26 on the news that chief financial officer Anna Manz is set to leave the company after almost four years and take a similar role at the London Stock Exchange (LSE).

Capita (CPI) has declined 6.3% to 43.6p as it warned of lower first-half revenue this year after performance was hurt by the Covid-19 pandemic and contract losses.

Revenue in the first half of the year was expected to be around 10% lower than 2019, of which 5% related to Covid-19, the company said.

PROPERTY PROBLEMS

LondonMetric Property (LMP) fell 0.9% to 210.2p following the announcement of two acquisitions for a total of £72.9m.

Student accommodation developer Unite (UTG) was down 1.7% to 882.5p after raising approximately £300m through a placing, the proceeds of which will be used to accelerate its growth in London and prime provincial markets.

The placing price represented a discount of 3.1% to the middle market closing price on 24 June 2020 of 897.5p.

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Issue Date: 25 Jun 2020