London’s FTSE 100 sheds 14 points to trade at 7,513 early on, ahead of inflation figures which could potentially trigger an underlying base rate rise from the Bank of England in November.

Theme park operator Merlin Entertainments (MERL) slumps 20% to 358.2p on the news like-for-like sales growth for 2017 will be flat and the downgrading of earnings before interest, taxation, depreciation and amortisation (EBITDA) guidance to a £470m-to-£480m range.

Merlin endured a torrid time of it over the summer, terror attacks impacting overseas tourist numbers. Merlin’s sluggish performance also reflects poor weather in Northern Europe, flash floods in Italy and a recent hit from Hurricane Irma, which forced the closure of LEGOLAND Florida for three days.

Academic publisher Pearson (PSON) perks up 6.1% to 659.5p after upgrading 2017 profit guidance with its US higher education courseware business showing ‘relative strength’ and ongoing savings from last year’s restructuring benefiting the bottom line. CEO John Fallon also says his charge will return £300m in surplus capital through a share buyback.

Also in demand is challenger bank Virgin Money (VM.), bid up 3.6% to 299.2p on an encouraging third quarter trading statement. CEO Jayne-Anne Gadhia reaffirms full year earnings guidance, stating ‘our low risk business model and customer-focused strategy continues to deliver excellent results and I am delighted with the ongoing momentum of the business.’

Profit taking and recent slower growth in the UK sees online fashion phenomenon ASOS (ASC:AIM) cheapen 81p to £56.19. Better-than-expected full year results show a 26% surge in adjusted profit before tax to £80m on the back of a 33% rise in sales to £1.923bn, largely driven by an excellent international performance. ASOS also increases revenue guidance for the current financial year to a range of 25-30% given the continuing momentum behind the business.

Newcastle-headquartered housebuilder Bellway’s (BWY) strong run continues, the shares bid up 2% to £35.71 on record full year results showing 12.6% growth in profit before tax to £560.7m and a 13% hike in the dividend to 122p. Trading has remained strong in the first nine weeks of the new financial year, Bellway achieving 171 reservations per week, an increase of 5.6% year-on-year.

Model and collectibles group Hornby (HRN:AIM) is marked down 0.5p to 33p following a new profit warning. The group had warned shareholders at the annual general meeting last month that performance had been below forecasts but the board has now decided that it would no longer offer for sale large quantities of stock at a discount, which will have a material impact on this year’s profits. The decision follows an initial review of the business by CEO Lyndon Davies.

Private healthcare play Mediclinic (MDC) falls 21.5p to 653.5p on news first half patient volumes were down in Switzerland and Southern Africa, impacted by the timing of Easter, although the Middle East business is generating strong growth with margin expansion.

Issue Date: 17 Oct 2017