European and Asian markets catch a ride on the same tailwind which lifted US stocks last night, namely hopes that the US could ease tariffs on China. That would be positive for commodity producers, which is why miners and oil stocks are among the biggest risers on the UK market on Friday, the FTSE 100 firming 53 points to trade at 6,888.2.
In corporate news, budget airline Ryanair (RYA) loses altitude, the shares off 2.1% at €9.8 as the low cost carrier downgrades full year profit guidance due to a fall in winter ticket prices. Net profit for the year to March is now expected at between €1bn and €1.1bn, down from previous guidance of between €1.1bn and €1.2bn. The downgrade comes despite Ryanair forecasting passenger growth of 9% to 142m, higher than previous guidance of 141m, and a slightly better-than-expected cost performance.
‘While we are disappointed at this slightly lower full year guidance, the fact that it is the direct result of lower than expected second-half air fares, offset by stronger than expected traffic growth, a better than expected performance on unit cost and ancillary sales is positive for the medium term,’ comments combustible CEO Michael O’Leary.
He also warns that ‘while we have reasonable visibility over forward fourth quarter bookings, we cannot rule out further cuts to air fares and/or slightly lower full year guidance if there are unexpected Brexit or security developments which adversely impact yields between now and the end of March.’
IT security specialist Sophos (SOPH) slumps 25% lower to 282.8p after reporting a weak third quarter performance, with the subdued outturn for both billings and cash earnings triggering downgrades to full year expectations. CEO Kris Hagerman seems chipper however, insisting Sophos ‘remains strongly positioned from a technology, product, and strategic perspective’ and expressing confidence in ‘our strengthening product platform and how it positions us for the future.’
Elsewhere, mining titan Rio Tinto (RIO) ticks 17p higher to £39.14 on the news full year 2018 production was largely in-line with expectations, helped by a solid final quarter, with copper surprising positively, although the trend of increased input costs in aluminium continues.
And the health, safety and regulations-led electronics equipment supplier Halma (HLMA) trades 6p higher at £13.91 as investors give the £32.6m acquisition of Rath Communications the thumbs-up.
Wisconsin-based Rath extends Halma’s safety communications capabilities and adds a new market niche with its strong position in the Area of Refuge (a part of a building designed to hold occupants during a fire or other emergency) communications market across the pond, where tightening regulatory standards are driving growth.
Renewable infrastructure fund Greencoat UK Wind (UKW) wafts 3.6% higher to 134p on the news net asset value grew by 8.1p per share over the fourth quarter to 123.1p per share, a quarter in which power generation was on budget and power prices above budget.
Salads, pizzas and desserts supplier Bakkavor (BAKK) improves 0.4p to 140.4p on a reassuring trading update, confirming results for the year ended 29 December will meet market expectations thanks to robust 3.2% like-for-like growth.
Toys and games distributor Character Group (CCT:AIM) clips 3.5% ahead to 540p after assuring it is trading in-line with management expectations and market consensus. Despite the poor performances reported by many retailers over Christmas, Character’s products sold well and remain popular. Character also insists international sales, excluding the USA where a better second half is hinted at, ‘remain steady’.
Remote meetings platform LoopUp (LOOP:AIM) leaps 15p higher to 335p as investors applaud the inking of a material contract renewal with global law firm Clifford Chance.
Currency manager Record (REC) reverses 9.3% to 28.7p as the company reports a fall in third quarter assets under management due to market volatility and fund net outflows.
