Dividend payments shave 37 points off the FTSE 100 today, contributing to a 0.6% headline price decline on the blue chip index, which trades at 6,824.
Yesterday was the last day for investors to qualify for dividends at index heavyweights including Royal Dutch Shell (RDSB), HSBC (HSBA), Astrazeneca (AZN) and GlaxoSmithKline (GSK), causing declines in their stock prices as they trade ‘ex-dividend’ and prepare to pay out cash to investors.
Excluding stocks trading ex-dividend, the index is flat.
The day’s biggest FTSE 350 gainer is DFS Furniture (DFS), up 13.0% to 253p on relief over the positive tenor of its year-end update.
With trading having remained strong through the second half, CEO Ian Filby guides towards a record full-year performance with results set to come in 'towards the upper end of market expectations'.
Though DFS acknowledges the risk of a furniture retailing slowdown post-Brexit, the board believes the business 'remains very well positioned to mitigate economic headwinds with resilient features in its operating model' while 'vertical integration provided by the group's UK in-house manufacturing operations limits currency exposure'.
Also among the risers is Coca-Cola HBC (CCH), fizzing up 5.3% £16.54, as underlying sales in the six months to 30 June increased 3%, profit margins expanded and bottling volumes held flat. Management expects growth in volumes and revenue at constant currency for the remainder of the year.
Car and home insurer Hastings (HSTG) climbs 3.8% to 214p on stealing more business from its rivals as consumers trawl comparison websites looking for a better deal on their insurance. A 28% rise in premiums to £360.6 million sent pre-tax profit to £51.4 million by the end of June from £9.3 million 12 months earlier. It remains on track to meet its four IPO targets.
Travel operator TUI (TUI) is also up 3.8%, to £10.50, and trades higher than its pre-Brexit level for the first time as results for the three months to 30 June show falling revenue but stable profitability.
The business remains on track to deliver previously-set out earnings targets of 10% growth in earnings before interest, tax and amortisation in the year to 1 October 2016, management says, as well as longer term growth aspirations.
Moving the other way, wealth manager Old Mutual (OML) falls 5.9% to 212.4p on pre-tax profits sliding 11% to £608 million in the six months to 30 June. Exchange rates and volatility in the equity markets are to blame.
Elsewhere, it’s a busy day for merger and acquisition gossip, with bookmaker William Hill (WMH), discount retailer Poundland (PLND) and oil and gas producer San Leon Energy (SLE) all involved in deal-related news.
William Hill in a statement today rebuffed an approach by rivals 888 (888) and Rank Group (RNK), saying it ‘substantially undervalues’ the business and would substantially increase the group’s debt load, creating greater risk for shareholders. The stock trades 0.3% lower at 323p.
And San Leon Energy says it has received commitments of $200 million (£154 million) as part of plans to acquire a Nigerian oil and gas producing field.