London’s FTSE 100 was flat by midday at 7,585.03 points as investors weighed the risks posed by interest rates and inflation and foods-to-fashion conglomerate Associated British Foods (ABF) dipped lower, while the FTSE 250 crept 0.23% higher to 22,707.35.
US stocks were expected to break higher after lurching back into the red in late dealings on Wednesday as investors continued to pore over corporate earnings reports amid rising bond yields.
Futures for the Dow Jones Industrial Average rose 0.49% in Thursday pre-market trading, while the S&P 500 index added 0.59% and those for the Nasdaq 100 gained 0.9%.
The owner of the Primark discount clothing chain, Associated British Foods, fell 3.4% to £20.58 despite providing the market with some reassurance on the impact of the Omicron variant on the business and maintaining full year guidance.
Primark is entirely reliant on high street footfall as it sells all of its products in stores rather than online. Yet in the run up to Christmas restrictions were imposed across Europe and in England there was a lockdown effect of sorts.
Shares in assurance solutions provider Spirent Communications (SPT) rose 6.4% to 245.2p after announcing that it expected to deliver adjusted operating profit ‘slightly ahead’ of market expectations following a ‘strong’ performance in the final quarter of the year.
The company said it now expected to deliver an adjusted operating profit slightly ahead of market consensus of $116 million.
‘Strong order intake growth continued through to the end of the year, resulting in full year revenue growing by 10% (7% organically) to $576 million’, the company added.
Trading profit for this financial year was now expected to be at least £145 million and adjusted profit before tax at least £125 million, following the delivery of ‘three strong quarters of trading, and taking good momentum into the final quarter’, according to the company.
The upbeat guidance was supported by stronger sales in Q3, with sales up 11.3% on a two year basis.
The shares responded positively to the news rising 6.4% to 117p.
Gambling company Entain (ENT) edged 0.6% higher to £17.20 after it upgraded its outlook on profitability as revenue grew in the fourth quarter of the year, led by a boost from the reopening of the retail estate.
Fiscal 2021 EBITDA (earnings before interest, taxes, depreciation, and amortisation) was expected to be in the range of £875 million to £885 million, ahead of previous expectations.
For the period from 1 October to 31 December 2021, net gaming revenues were up 4%, as retail grew 60% year-on-year, offsetting a 9% decline in online gaming revenue, which was due to ‘particularly strong comparatives’, the company said.
Shares in clothing retailer Superdry (SDRY) cheapened 5% to 236.5p despite announcing that it had made a profit in the first half of the year as lower revenue was offset by an improvement in margins as the fashion retailer increased prices.
For the 26-week period from 25 April 2021 to 23 October 2021, pre-tax profit was £4 million compared with a loss of £18.9 million last year, while revenues fell 1.9% year-on-year and 24.9% on a two-year basis.
‘The emergence of the Omicron variant has resulted in more uncertainty,’ conceded Superdry, though the retailer remains ‘encouraged the brand is clearly resonating with consumers, reflected by the strong gross margin performance as we returned to a full-price stance. Our performance over the peak trading period has given us confidence that we will achieve current market expectations for FY22 adjusted PBT.’
AROUND THE MARKET
Elsewhere, clay and concrete building products manufacturer Ibstock (IBST) improved 1.5% to 205.2p after announcing that full year profit is set to be ‘modestly’ ahead of its previous guidance following strong trading in the final quarter.
Ibstock now expects full year revenues to rise 29% on the year to £409 million, while adjusted earnings before interest, tax, depreciation and amortisation are forecast to be modestly ahead of its previous expectations.
Recruitment and professional services company Parity (PTY:AIM) said rallied 11% to 7.5 after reporting that it had ‘marginally exceeded’ market expectations for the full year following its decision to refocus the business around its core recruitment offering.
Electrical and wiring products supplier Luceco (LUCE) softened 1.5% to 323.5p even as it reported that revenue increased in the fourth quarter of the year, driven by new business wins.
Flexible offices provider Workspace (WKP) was up 3% to 887p after reporting an improvement in occupancy and higher pricing in the third quarter of the year, driven by ongoing strong customer demand.