UK stocks open higher with the FTSE 100 adding 0.9% to 7,104, shrugging off a soft tone in US stocks yesterday on the mid-term elections.
With the Democrats taking control of the House of Representatives, President Trump and the Republican party will find it more difficult to pass legislation and fulfill some of their policy promises.
Shares in high-street stalwart Marks & Spencer (MKS) dip 2% to 296p this morning despite reporting half-year pre-tax profits up 7% to £127m on sales of just under £5bn.
On a like-for-like basis clothing sales did better than food for a change with clothing down 1.1% on a same-store basis and food down 2.9% due to fewer promotions.
The company is still in the early phases of boss Steve Rowe’s overhaul which involves reducing the number of stores, increasing the focus on digital and removing costs, complexity and working capital.
Broadcaster ITV (ITV) sees its shares fall 4% to 148p after it reports total nine-month sales up 5% to £2.6bn with ITV Studios revenues up 10%.
Advertising revenues were up 2% over nine months but were flat in Q3 and are forecast to be down 3% in the final quarter which has clearly disappointed investors.
Persimmon (PSN) shares tick 1% higher to £23.85 as the house-builder delivers a solid third-quarter trading update with sales ahead of last year despite a strong comparison.
The company has already hit its full-year sales target and has almost £1bn of forward sales beyond 2018, a healthy 9% increase on last year.
Persimmon also announces that Jeff Fairburn will step down as chief executive officer at the end of the year due to the continuing negative impact on the firm’s reputation from his remuneration.
Rival house-builder Redrow (RDW) was less upbeat as it announced reservations in the quarter to the start of November were flat at £588m.
Sales have been held back by the London market which is suffering from Brexit uncertainty and what the company calls ‘excessively high Stamp Duty’.
Echoing Persimmon, Redrow announced that chairman Steve Morgan will be stepping down next March after 10 years at the helm. Shares are flat at 565p.
There was positive news from infrastructure firms Balfour Beatty (BBY) and Costain (COST) on contract awards through Highways England.
Balfour secured two lots of work, one in the South East and one in the North, worth a total of £425m. Shares rise 1% to 276p.
Meanwhile Costain has been appointed Delivery Integration Partner for the North and East region responsible for development, design and delivery of the roads upgrade.
The value to Costain is expected to be £1.5bn over six years. Shares add 2% to 370p.
Pub group JD Wetherspoon (JDW) releases a typically rambling trading update with seven of the eight pages devoted to Brexit, in the midst of which is a warning that earnings will be ‘slightly below’ than last year.
Also notable is the lack of new openings which has been a major growth engine for ‘Spoons’. Shares drop 8% to £12.08 in anticipation of earnings downgrades.
The wooden spoon goes to software and security firm Sophos (SOPH) with shares down 23% to 349p as investors take fright at a less-than-stellar first-half update.
Billings are in line with guidance given in July and the renewal rate is still impressive but the firm is only forecasting ‘modest growth’ in the second half before a pick-up in 2019-2020.
Disclaimer: the reporter holds shares in ITV and Sophos.
