UK stocks start Thursday trading on the front foot buoyed by a firm showing for US markets overnight, offsetting more trade tariff tightening that will see the US impose an extra $300bn burden on Chinese goods by the end of the year.
The pound continues its decline as investors worry about Brexit no-deal implications, although comes as a boon for the FTSE 100, sidestepping the swathe of mid cap stocks going ex-dividend today, and another painful revenue miss from FTSE 100 IT firm Micro Focus (MCRO).
At 8.50am the benchmark FTSE 100 is up around 30 points at 7,141.02.
SALES DECLINES ACCELERATE
It is IT infrastructure firm Micro Focus that dominates another fairly quiet day for corporate news, the UK’s second largest ‘tech’ stock tumbling more than 30% to £10.68, heading the FTSE loser board, after it said it will miss its sales targets for the year.
The company, which provides legacy IT system upgrades, had been anticipating a decline in revenue of between 4% and 6% but it will fail to hit that target as customers drag their feet over new purchases, it said.
The company lowered its guidance to a range of 6% to 8% sales falls for the year to 31 October 2019, coincidently Brexit D-day.
Elsewhere among the mega-caps, drugs developer AstraZeneca (AZN) is up 1.2% at £73.51 after positive Phase III clinical trials for Anifrolumab, a potential new medicine for the treatment of systemic lupus erythematosus.
Guarantor loans provider Amigo (AMGO) reset annual expectations on Thursday blaming a weaker economic outlook and expectations that bad debt impairment costs would remain at a higher level than previously expected.
The news has sent the share price plunging nearly 28% to 105.4p, valuing the FTSE 250 business at about £500m.
The weaker outlook comes as the company reported a rise in first quarter pre-tax profit as revenue jumped amid a rise in loan growth. For the three month period ended 30 June 2019, pre-tax profit rose to £22.6m form 17m a year earlier and revenue increased 13.7% to £71.5m.
For the 12 months to 30 June pre-tax profit fell 3% to $231.2m, and net fees grew 5% to £1.1bn. Germany, the company's biggest market, generated net fees of 6% even as the economic slowdown weighed.
The company does face ‘more challenging markets’ but does so with confidence, chief executive Alistair Cox said but the share still sank 3% to 135p.
For the six months to 30 June 2019 Hunting reported profit from operations up to $41.1m from $38.9m a year earlier and revenue 15% higher at $508.9m. The company also hiked its dividend from $0.04 last year to $0.05 this time round.
AN INCONVENIENT RETAIL MARKET
Convenience store retailer McColl's Retail (MCLS) said third quarter sales and revenue were dragged down by a ‘challenging’ trading environment and poorer weather across the summer, but added that it still expected full year results to be ‘in line’ with expectations.
Like-for-like sales were down 2.2% and total revenue was 3.6% lower for the 13 weeks ending 25 August 2019. Given the number of profit warnings flooding out from the retail space over recent months, including McColl’s own last November, investors are clearly relieved, lifting the shares 1.2% to 49p.
It flogged Minerva, founded in 1904 and the first company to sell branded, packaged olive oil in Greece, for £41m and is in the process of selling Luksja, a Polish shower gel brand.
Diversified Gas & Oil (DGOC) said it has acquired the assets of EdgeMarc Energy in a $50m deal. Under the agreement, the company will acquire EdgeMarc's natural gas development, production and exploration assets.
Shares in Diversified Gas & Oil rise 1.5% to 103p.