Sales of big ticket furniture are not going well for retailer DFS (DFS) which has cut its earnings guidance towards the lower end of forecasts. The news is a hefty blow coming after orders declined in April, May and June, reflecting an uncertain economic environment, an unexpected national election and warm weather. Investors are spooked, marking the share price down by more than 7% in early trade on Thursday to 214.25p, the biggest loser on the FTSE All-Share index.

That plays into an overall downbeat market mood with the UK’s benchmark FTSE 100 index declining by around 50 points early on Thursday to 7,448.

EX-DIVIDEND DRAG

Acting as an extra drag on the markets performance is a host of heavyweight stocks going ex-dividend, where investors lose the right to the next dividend payout. Standout company’s include miner Anglo American (AAL), drugs developer AstraZeneca (AZN), Barclays (BARC), BP (BP.) and telco giant BT (BT.A), trimming 41 points off the FTSE 100, according to Reuters calculations

Providing a welcome lift are higher quarterly sales from soft drink bottler Coca-Cola HBC (CCH). In what the company calls ‘excellent first half results’ it shows big jumps in both operating and pre-tax profits despite more modest 1.4% and 5.6% increases in volumes and net sales. Helped by warm weather in June and a late Easter holiday this year, shares in the company shoot to the top of today’s FTSE 100 leader board, jumping nearly 10% to £25.84.

BUMS ON SEATS

Elsewhere, solid half year results give investors in British cinema chain operator Cineworld (CINE) a lift, the stock close on 4% up at 730p. Revenue is up 17.8% thanks to a strong box office performance with winning titles such as ‘Beauty and the Beast’, ‘Guardians of the Galaxy Volume 2’ and ‘The Fate of the Furious’ doing impressive business.

Away from corporate announcements, a slowdown in the housing market appears to be spreading out from London to other parts of the South East of England, according to The Royal Institution of Chartered Surveyors latest survey. The study shows that house prices are barely moving with price growth is slowing, while the number of transactions are down also.

That does not tally with fairly robust interim results from international estate agency Savills (SVS), which reports a 27% rise in first half profit. Strength from Asia and its real estate investment management arm are largely given credit for the performance and Savills does accept a post-Brexit decline in demand for new homes and office space in London. Savills’ shares rally 2.8% on Thursday to 937.5p.

CHALLENGER BANK BOOM

British bank Aldermore (ALD) reports a 32% rise in profit for the first half of the year, helped by strong demand from small- and medium-sized businesses, homeowners and landlords. The stock responds with a 1.6% increase to 224.4p.

Russia's Evraz (EVR), the country's second-biggest steelmaker, says core earnings almost doubled in the first half of 2017 to $1.15bn. This impressive performance comes on the back of higher coal and steel prices, lifting the share price 3.5% to 274.4p.

British recruiter PageGroup (PAGE) says it will pay a special £40m dividend thanks to strong growth in most of its international markets. Operational improvements also weigh in to the company’s reported 20.9% rise in first half profit. But the market takes the news in its stride, the stock up less than 1% at 504.5p, presumably the one-off payout coming as no surprise to the market.

In City gossip, there are reports emerging over the controversial attempt by Rupert Murdoch’s Twenty-First Century Fox attempt to take over UK satellite broadcaster Sky (SKY). Already the subject of government scrutiny, now hedge fund manager Crispin Odey has said he is considering withdrawing his support for the deal because he believes the £11.7bn deal undervalues Sky. The UK company’s share price remains largely unmoved at 957p.


Issue Date: 10 Aug 2017