The FTSE 100 got off to a strong start on Tuesday thanks to progress with new US government stimulus increasing investor appetite for equities.

The UK’s leading basket of stocks moved 0.59% higher to 6,149.26 shortly after trading began, mirroring the momentum seen overnight in US stock markets.

Gold briefly hit a new record of $1,980 per ounce before easing back to $1,935 per ounce.

RECKITT BENCKISER PROFIT JUMPS 12%

In a day packed with company news, consumer goods giant Reckitt Benckiser (RB.) fell 1.4% to £76.12 despite booking a 12% rise in first-half profit and tracking ahead of full-year expectations, amid a surge in demand for cleaning products during the coronavirus crisis.

Pre-tax profit for the six months through June increased to £1.44 billion, up from £1.26 billion on-year as revenue rose 11% to £6.91 billion. Adjusted operating profit climbed 15% to £1.70 billion.

The company said its performance for 2020 was now expected to be better than hoped back in April, although the outlook for the balance of the year remained uncertain.

GAMES WORKSHOP SALES SHINE

Miniature wargames maker Games Workshop (GAW) gained 5.4% to £89.15 after it reported a rise in profit on higher revenue, led by sales in its trade business. Pre-tax profit rose to £89.4 million from £81.3 million on-year as sales grew by 5.1% to £269.7 million.

The trade segment, which made up 52% of total revenue, reported that sales rose 15% to £140 million.

Retail sales decreased by 11% in the year, as the coronavirus pandemic led to temporary store closures.

GREGGS SWINGS TO LOSS AFTER SALES HIT

High-street food chain Greggs (GRG) increased 1.27% to £14.77 despite swinging to a loss as the impact of shuttered stores hurt sales.

For the first half of 2020, the company reported a pre-tax loss of £65.2 million, compared with a profit of £36.7 million a year earlier as sales slumped to £300.6 million from £546.3 million.

The company said it now expected to open about 60 shops and close 50 sites. It expects the business to break even in profit terms when it achieves sales around 80% of the 2019 level.

Builders’ merchant and DIY group Travis Perkins (TPK) gained 2.3% to £12.31 despite saying its first-half revenue had slumped by a fifth after coronavirus lockdowns hit the construction sector.

The company, however, said business had continued to recover since lockdowns were eased. Revenue for the six months through June fell 20% to £2.78 billion, with like-for-like sales down 19.3%.

AG BARR SEES SLOW HOSPITALITY RECOVERY

Irn-Bru maker A.G. Barr (BAG) increased 1% to 437p despite estimating that revenue would be down by about 12% to 15% for the year, barring a second nationwide lockdown.

The guidance came as the company reported a fall in half-yearly sales and said it had seen a slow recovery in hospitality and ‘on the go’ consumption segments as lockdown measures eased. For the 26 weeks ended 25 July, revenue was expected to be down 8% to £113 million on-year.

General merchandise retailer B&M European Value Retail (BME) rose 3.4% to 457p after it said adjusted core earnings would top market expectations following a strong start to its new financial year.

For the six months to 26 September 2020, the company forecasts adjusted earnings before interest, tax, depreciation and amortisation in the range of £250 million to £270 million, above the analysts’ consensus forecast of £208.1 million.

FRESNILLO FALLS DESPITE DOUBLING PROFIT

Mining company Fresnillo (FRES) fell 5% to £12.12 despite reporting that profit doubled in the first half of the year as rising metal prices and lower costs boosted performance.

For the half year ended June 30, pre-tax profit rose 136.6% to US$127.9 million and revenue was up 5.3% to $1.12 billion.

The jump in profit was mainly driven by higher gold and silver prices, though was partly offset by lower volumes of gold and silver sold and the decrease in zinc and lead prices.

Banking group Virgin Money UK (VMUK) rose 2.7% to 100.15p after it further increased its credit provisioning to cover defaults related to the coronavirus crisis.

The company reported a 1% fall in third-quarter mortgage lending volumes, offset by a rise in business lending and customer deposits.

Price comparison portal Moneysupermarket.com (MONY) gained 2% to 310p despite it posting a 15% fall in first-half profit, citing disruptions caused by coronavirus lockdowns. The firm held its interim dividend steady at 3.1p per share.

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Issue Date: 28 Jul 2020