While Asian markets climbed overnight on hopes of new trade talks between the US and China, London’s FTSE 100 firms just 9.7 points to 7,291 on Friday, a modest gain which is nowhere near strong enough for investors to become more optimistic about the direction of travel.
In corporate news, specialist bank and fund manager Investec (INVP) sparks up 12.4% to 545p after announcing plans to hive off and separately list its asset management unit IAM. Investec also says operating profit for the half to September will be ahead of the prior year, despite its wealth management arm grappling with negative emerging market sentiment and a weaker South African rand, with a boost from its UK specialist banking business.
Pubs group JD Wetherspoon (JDW) cheapens 20p or 1.56% to £12.60, as full year sales and operating profit come in at the lower end of consensus forecasts with the chain seeing an impact from the summer heatwave and World Cup. Chairman Tim Martin says his charge has had a reasonable start to the new financial year with like-for-like sales up 5.5% in the six weeks to 9 September. However he cautions ‘taxes, labour and interest costs are expected to be higher than those of last year, so we estimate that like-for-like sales growth of about 4% will be required for the company to match last year’s record profits.'
Aspiring potash miner Sirius Minerals (SXX) digs 3.5% higher to 28p as investors welcome an amendment to a royalty arrangement entered into with Australia’s Hancock Prospecting in October 2016 to help it fund a fertilizer project in Yorkshire. Managing director Chris Fraser explains ‘the drawdown of the Hancock Royalty is another important milestone as we develop into a leading fertilizer business. We are delighted to have an experienced partner in the mining industry aligned to Sirius and one that has a growing, long term agricultural interest.’
Toys distributor Character (CCT:AIM) clips ahead 4.4% to 522p on news results for the year to August will ‘comfortably reach market expectations’, with management also sounding confident on the outlook for Christmas.
Encouragingly, Character witnessed a return to its previous growth pattern in the second half and the UK business delivered record annual sales, established brands such as Teletubbies and Peppa Pig and new ranges including Pokémon, Treasure X and Doorables Disney Collection apparently ‘selling extremely well’.
Bombed-out logistics firm Connect (CNCT) crashes 17% lower to 30.75p on yet another profit warning. Connect warns full year results will be below downgraded expectations following a tough final quarter to August, with trading in the parcel freight market remaining challenging and Smiths News seeing lower than expected sales of stickers and albums than in previous World Cups. Alarmingly, Connect also flags a £1m-to-£1.5m provision for liabilities payable to the taxman relating to historic wages underpayment.
Exhibitions, publishing and online media play Tarsus (TRS) tumbles 7.1% lower to 277p as investors factor in the dilution from a £24m share placing to fund the acquisitions of minority shares of existing joint ventures in Mexico and South East Asia. Demanding investors may also be disappointed with the rate of bookings growth reported in an accompanying trading update.