London’s FTSE 100 was 0.2% higher at 7,050.16 points at lunchtime on Thursday as the Bank of England decided to hold interest rates at 0.1% and investors weighed positive corporate updates and potential political uncertainty linked in particular to elections in Scotland.
As expected, the Bank of England (BoE) acknowledged improvements in the UK growth outlook owing to vaccinations picking up pace but kept policy unchanged.
NEXT RAISES GUIDANCE
In company news, clothing retailer Next (NXT) gained 2.6% £83.34 after raising its central guidance for pre-tax profit by £20 million to £720 million for the year.
First quarter sales in the 13 weeks to 1 May were down 1.5% compared to the same period two years ago before the pandemic, largely as a result of store closures.
But the company said the last three weeks sales have been ‘exceptionally strong’ and, versus two years ago, total full price sales were up 19%. In that period, full price sales in like-for-like retail stores were up 2% and online sales were up 52%.
Despite retail stores being closed for 10 weeks of 2021, full price sales to date have been £75 million better than expected, the group said, increasing its profit guidance as a result.
Fashion brand Superdry (SDRY) surged 18% higher to 324.5p after it reported a very strong end to the year and issued an upbeat outlook.
‘Our strengthened ecommerce presence has helped mitigate the impact from enforced closures of our stores,’ said CEO Julian Dunkerton. ‘The early signs following the reopening of our UK stores are encouraging, as lockdown restrictions start to lift, and we can clearly see the light at the end of the tunnel.’
Housebuilder Barratt Developments (BDEV) gained 2.1% to 782p on news it expects outturn to be ‘modestly above’ its expectations after raising its forecast on completions for the full-year thanks to strong demand for homes.
ASTON MARTIN LOSSES NARROW
Shares in Aston Martin Lagonda (AML) improved by 1.1% to £19.21 after the luxury carmaker reported narrower losses in the first quarter of the year as a surge in wholesale volumes and higher prices boosted revenue.
For the first quarter, pre-tax losses narrowed to £42.2 million from £110.1 million year-on-year as revenue rose 153% to £224.4 million. The rise in revenue was driven by ‘wholesale growth and stronger pricing dynamics as dealer GT/Sport stock reduced as planned,’ the company said.
Wholesales volumes were up 134% to 1,353 to meet demand, with DBX representing 55% of units. The cash position was improved to £575 million from £489 million seen at the December end. Expectations and guidance for 2021 has been left unchanged.
Insurance company Aviva (AV.) edged 0.8% higher to 406.7p having completed the sale of its entire 40% stake in the Turkish life insurance and pensions joint venture, AvivaSA Emeklilik ve Hayat AS, to Ageas Insurance International NV.
Aviva received £122 million in cash for the sale, which included a £3 million dividend from AvivaSA received in March 2021.
MONDI’S ‘ROBUST’ FIRST QUARTER
Packaging group Mondi (MNDI) fell 3.9% to £19.12 despite reporting a ‘robust’ first quarter of 2021, fuelled by its sustainable packaging solutions and higher average containerboard selling prices.
Engineering turnaround specialist Melrose Industries (MRO) gained 0.9% to 165.2p after reporting an 8% surge in sales during the first quarter of 2021, compared to the same period a year earlier.
Operating margins achieved in the first quarter of the year improved faster than expected and Melrose was cash neutral in the first quarter, a period that has traditionally been a cash outflow period.
Wine retailer Virgin Wines (VINO:AIM) gained 3.2% to 246p after revealing it is set to surpass previous performance expectations with its online offering continuing to be in demand.
As a result of the performance, the firm’s board anticipates revenue and profitability for its 2021 financial year will be ahead of its previous expectations, with turnover for the year expected to be no less than £73 million.
Legal and professional services group Gateley (GTLY:AIM) surged 7.2% higher to 200p after it resumed its dividend on expectations for profit and revenue to be ‘significantly ahead’ of market expectations following a very strong end to the year.
Consensus market expectations for adjusted pre-tax profit is £14.7 million and for revenue is £111.7 million. Gateley confirmed plans to restart dividend payments and will pay a dividend for its current financial year in line with its previous policy of distributing up to 70% of profit after tax.
Flexible office space provider Workspace (WKP) gained 3.2% to 866.5p having reported a pick-up in demand as the Government's Covid-19 restrictions have lifted.
The easing of restrictions during the first quarter resulted in an increase of customer utilisation of its business centres, reaching 20% of pre-Covid levels by the end of March and 30% by the end of April.
The company has had ‘robust’ cash collection despite the restrictions on rent collection, with 92% of rent due for the fourth quarter of 2020/21 now collected. For monthly paying customers, 84% of rent due for the first quarter of 2021/22 has been collected, which is in line with the levels at the same point in previous quarters.