Despite a sharp rally in Chinese shares overnight and another day of strong gains for US shares, with the Nasdaq Composite index hitting a new record, UK stocks eased on Tuesday as more companies counted the cost of the pandemic and lockdown.

On the currency markets the pound was steady against the dollar at $1.248 while gold prices eased back slightly to $1,781 per ounce.

The FTSE 100 index gave up 64 points or 1% to 6,222, pulled lower by hotel and restaurant operator Whitbread (WTB) and the major banks. Meanwhile the FTSE 250 mid-cap index fared slightly better, down by 99 points or just 0.5% to 17,451.

WEAK OUTLOOK

Shares in Whitbread (WTB) fell 4% to £23.42 after it reported a 79% fall in like for like sales for the quarter to the end of May due to the impact of the pandemic.

The results were expected to be weak as the majority of the Premier Inn estate was closed during the period, but investors were hoping for a more upbeat outlook.

Instead the company said that although it said it had seen ‘good demand’ for the summer, it was ‘too early to draw any conclusions from its booking trajectory.’

Also on the losing side was Micro Focus (MCRO) which posted a $1 billion loss for the half year to 30 April due to a $922 million goodwill impairment charge for the ‘increased economic uncertainty’ caused by the pandemic and the potential disruption to sales and contract renewals.

Shares in the software firm were the worst performers in the FTSE 250, down 6.9% to 408p.

Cycling and motoring products firm Halfords (HFD) posted forecast-beating profits for the full year to 3 April thanks to tight cost control and an improvement in margins.

Pre-tax earnings for the period were £55.9m, just shy of the previous year’s £58.8m, as cycling sales increased by 2.3% on a like for like basis and even the autocentre business grew sales by 1.4% on a similar basis.

However the shares fell 8.4% to 162p after strong gains at the end of last week including a 10% pop on Thursday.

BUCKING THE TREND

Trading platform Plus500 (PLUS) also delivered a forecast-busting trading update with half year revenues up almost threefold to $564m against $148m in the same period a year ago.

The firm put the growth down to consistently high levels of customer trading, thanks to continued market volatility, and the onboarding of ‘a significant number of new customers at an attractive cost.’

It also confirmed the appointment of David Zruia as permanent chief executive after he assumed the role on an interim basis in April. Investors applauded the results, pushing the shares up 8.2% to a new high of £14.44.

Athleticwear retailer JD Sports Fashion (JD.) gained 1.9% to 687p after it posted record results for the year to 1 February with revenues up 30% to £6.1bn and earnings before interest, taxation, depreciation and amortisation (EBITDA) up 28% to £623 million.

The firm gave little detail on current trading except to say that online sales had been ‘resilient’ while initial footfall had been weaker in malls and shopping centres ‘as customers remain nervous about the risks associated with densely occupied enclosed spaces.’

Waste treatment firm Renewi (RWI) was another gainer, up 6.2% to 27.5p after first quarter trading exceeded management expectations as waste volumes continued to improve in the three months to June.

The firm estimated the impact to earnings from the pandemic of €12m rather than its budgeted €20m thanks to ‘swift cost action’ and lower debt levels.

 

FOR A LIST OF FTSE GAINERS AND LOSERS SEE HERE

 

 

 

 

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Issue Date: 07 Jul 2020