UK stocks are lower on Wednesday, dragged down by weakness in Europe as US-China trade talks end abruptly and seemingly without resolution.
Despite a further fall in the pound, the FTSE 100 is down 0.2% to 7,636 led by banks, beverages and personal goods, easing off 2019 highs of 7,686.61 recorded on Monday.
Shares in Lloyds Banking (LLOY) drop 4.7% to 52.5p despite a solid first half performance with a market-leading cost to income ratio and record low bad loans as a proportion of assets.
Investors are rattled by more charges for PPI claims, in total £550m in the first half, which reduced pre-tax profits to £2.9bn against expectations of £3.45bn and last year’s figure of £3.12bn.
Lloyds is beaten to the leading spot on the blue-chip loser board by wealth manager St James's Place (STJ), which warned that ‘challenging external factors’ weighed on new inflows in the first six months of 2019.
Net inflows of funds were £4.4bn in the first half of 2019, down from £5.2bn a year earlier, enough to spark a 5.5% share price sell-off to 985.8p.
RETAIL THERAPY FOR BELEAGUERED INVESTORS
Clothing retailer Next (NXT) delivers a positive surprise with its half-year trading statement, raising its full year full-price sales and earnings guidance.
Full-price sales are now seen growing by 3.6% instead of 1.7% while full year profit is seen £10m higher than previously estimated at £725m, implying a small increase on last year. Shares jump 7% to £60.08.
Next shares jump more than7% to £60.32, continuing their firm rally in 2019.
Also on the rise is Computacenter (CCC), the UK’s number one software reseller, and the biggest riser across the entire FTSE All-Share.
Today’s near-11% jump to £15.06 comes after the £1.6bn FTSE 250 firm tells investors that it full year 2019 figures will come in ‘materially ahead of current market expectations in both profitability and earnings per share’.
Analysts currently have adjusted pre-tax profit pitched at £127.5m for 2019.
Shopping centre landlord Intu Properties (INTU) reported wider losses in the first half of the year, blaming a 'challenging' period in which several retailers entered insolvency arrangements.
For the six months ended 30 June, pre-tax losses widened to £856m from £506.5m a year earlier as net rental income and property values were hurt by a higher level of retailers entering insolvency arrangements.
But investors were expecting far worse, which explains today's 8% share price rally to £60.60.
BRAKES ON ASTON MARTIN AGAIN
Bottom of the pile today is beleaguered sports car maker Aston Martin Lagonda (AML) which sees its shares collapse a further 13% to 494p after it posted a £79m loss in the first half of the year compared with a £21m profit a year ago.
The shares have lost more than 50% of their value in the last week as concerns grow that it may need to raise capital to continue investing in new models.
On a brighter note pest-control firm Rentokil (RTO) reports a strong set of half-year results with organic revenue growth tracking above its long-term target of 3% to 4%, sparking a 3.5% share price rally to 426.9p.
Group revenues were up 8.8% in the first six months with organic growth of 4.2% despite poor weather in North America in the second quarter. Both Pest Control (sales up 4.8% like for like) and Hygiene (up 4.3% like for like) contributed to the gains.
Not to be outdone, medical technology firm Smith & Nephew (SN.) also raises its full year revenue growth forecast thanks to ‘positive momentum across the business globally’ in the first half.
Sales are now expected to grow by between 3% and 4%, an increase of 0.5% on the previous forecast, while operating profit guidance stays unchanged at between 22.8% and 23.2%. Shares add 0.9% to £18.78.
Shares in building supplies merchant Travis Perkins (TPK) gain 2.5% to £13.54 after the firm reports a 7% increase in first half sales and close to a 15% increase in operating profits thanks to a strong recovery at Wickes and ‘continued excellent growth’ in Toolstation.
Shares in insurance group Direct Line (DLG) tread water at 324p after it releases a staid set of half-year results with gross written premiums down slightly due to fewer motor policies and operating profits down 10% due to lack of exceptional gains as in 2018.
Generally benign weather reduced the amount of home claims but the motor market remains extremely competitive with Direct Line lowering its average premium despite claims inflation running at 5% or more.
