The FTSE 100 rebounded strongly after yesterday’s major losses as a big fall in the pound helped exporters.
As coronavirus cases continue to climb investors rushed to the relative safe haven of the US dollar, helping companies which report in dollars, while the pound also took a hit following reports suggesting Prime Minister Boris Johnson could walk away from talks with the EU over a post-Brexit trade deal.
At 9am, the UK’s benchmark index was up 1.17% to 5,900.73.
In commodities, gold is back below the psychologically important $1,900 level, trading 0.95% lower at $1,891 per ounce. As for oil, Brent crude futures were down 0.77% to $42.66 a barrel.
SERCO SOARS ON UPGRADED GUIDANCE
The biggest riser of the morning has been services group Serco (SRP), soaring 15.5% to 136.75p, after it upgraded its annual revenue and profit guidance, citing strong third-quarter revenue growth and tight cost control.
Underlying trading profit for the year through December was expected at between £160 million and £165 million, compared to previous guidance of £135 million-to-£150 million. Revenue was seen at around £3.9 billion, up previous guidance of around £3.7 billion.
As for 2021, Serco said it expect uncertainties to persist as the world grappled with recurring coronavirus outbreaks.
‘We have only just started our budget review process, and we would not have a view concerning 2021 today which is materially different from that which we had at the time of our half year results in August,’ Serco said.
WETHERSPOON SWINGS TO LOSS
One of the biggest fallers was pub group JD Wetherspoon (JDW), which fell over 7% to 892p, as it swung to an annual loss and warned of an uncertain outlook for pubs, amid what it claimed where ‘ill-thought-out’ Government restrictions to curb the Covid-19 outbreak.
For the year through 26 July, pre-tax losses were £34.1 million, compared with a profit of £102.5 million year-on-year. Revenue fell to £1.26 billion, down from £1.82 billion.
Chairman Tim Martin complained that a national Government lockdown was in place for ‘far longer than was necessary to achieve its stated objective of flattening the curve.’
Like-for-like sales in the first 11 weeks of its new financial year were down 15% year-on-year, as strong sales in the first few weeks were offset by a marked slowdown since the introduction of a curfew and other regulations.
The board company said it was not proposing a final dividend payment for the year. Looking ahead, Martin said the outlook for pubs over the remainder of the current financial year was ‘even more unpredictable.’
SUPERDRY FINANCE BOSS SUDDENLY QUITS
Another big faller was fashion retailer Superdry (SDRY), which dropped 6.6% to 142.4p after the abrupt departure of its chief financial officer Nick Gresham.
Superdry said Gresham has left the business with immediate effect, after just over a year at the company, with the search for a replacement to begin while interim arrangements are put in place.
Superdry CEO Julian Dunkerton said, ‘Nick joined Superdry at a time of significant change and challenge in the business. He has played an important role in putting the company in a stronger position than it was before he joined and helped to steer Superdry through the impact of the COVID pandemic.’
RIO TINTO MAINTAINS GUIDANCE
Mining giant Rio Tinto (RIO) gained 1.5% to £47.26 after it maintained its production and capex guidance as its operations start to return to normal following disruptions caused by the coronavirus pandemic.
Rio Tinto said production guidance remained unchanged from its second-quarter review, with the exception of refined copper, which was updated on 19 August, and titanium dioxide slag, which was now expected to be around 1.2 million tonnes.
Outgoing chief executive J-S Jacques said, ‘We have delivered a good operational performance across most of our assets catching up on planned maintenance activity, particularly in iron ore, and continuing to adapt to new operating conditions as we learn to live with Covid-19.'
We have maintained our capex guidance and our 2020 production guidance across our key products.’
OTHER COMPANY NEWS
Fund manager Man Group (EMG) firmed 5.2% to 123.35p as it reported an uptick in third-quarter funds under management, after enjoying fresh inflows into its funds.
Rival money manager Jupiter Fund Management (JUP) went in the opposite direction, falling 3.7% to 230p, as it reported quarterly outflows.
Industrial chain manufacturer Renold (RNO:AIM) fell 2.46% to 11.17p despite announcing that it remained profitable in the first half of its financial year in spite of revenue dropping 17% to £82 million.
Retail space management group SpaceandPeople (SAL:AIM) sank 14% to 4p as it posted a deeper first-half loss after the pandemic hurt shopping centres and other high footfall venues, sending its revenue down 72%.