UK stocks recovered from their midday lows on Thursday but investors turned to worrying over tomorrow's US jobs report amid rising signs of inflation in the labour market.
The US non-manufacturing activity index hit the highest level since the series started, while the European composite purchasing managers' index hit its highest level since early 2018.
Brent rrude prices were easier at $71.12 per barrel while gold fell 0.7% to $1,894 per ounce.
At the close the FTSE 100 index of leading shares was down 44 points or 0.6% at 7, 064 points, pulled lower by consumer and mining stocks.
CORPORATE NEWS
Shares in variety goods value retailer B&M European Value Retail (BME) were the second-worst performer on the FTSE, dropping 4% to 539p despite a 140% hike in the final dividend to 13p per share, bringing the full year ordinary dividend to 17.3 p, at the top end of its ordinary dividend pay-out policy.
For the 52 weeks to 27 March 2021, pre-tax profit increased 108.5% to £525.4 million as revenue increased 25.9% to £4.80 billion. Performance reflected strong sales of product categories related to stockpiling through the pandemic.
While noting the tough comparatives created by today’s results, the company said it remained ‘confident’ that its customer proposition would prove highly relevant to the needs of shoppers.
Information Services firm Informa (INF) said it was on track to deliver on its base line revenue target of at least £1.7 billion and remain cash flow positive as its events business continued to recover and its digital services business expanded.
The company plans to update the market on first-half results on 29 July 2021 and provide clarity on the likely shape of the transition year and the pace of recovery through the 2022-2024 period. The shares reversed earlier gains, dipping 0.8% to 541p.
SPECIAL DIVIDEND AND ACQUISITION
Water group Pennon (PNN) said full year revenues increased by 1.2% as higher than expected household demand, driven by lockdowns and new contract wins, offset reductions related to the new regulatory regime.
Pre-tax profit fell 14.2% to £157 million reflecting the revenue impact. The firm announced a special dividend of £1.5 billion equating to £3.55 per share and a share buyback of £0.4 billion, which is subject to ‘flex’ to satisfy growth opportunities.
In order to maintain the comparability of the company's share price before and after the special dividend, it is proposing a share consolidation.
Pennon also announced the acquisition of Bristol Water for £425 million, recognising the strong strategic fit of the business which is expected to deliver growth to the group.
The board decided to increase the group's dividend level by around 9% (equivalent to an increase of 2p per share on a pre-consolidation basis) from 2021/22 onwards, and to continue its sector-leading dividend policy of increasing it by consumer price inflation plus 2% growth. Shares gained 1.5% to £10.84.
Defence company Chemring (CMG) raised its dividend after reporting a rise in first-half profit.
For the six months ended 30 April 2021, underlying pre-tax profit rose 12% to £27.2 million year-on-year as revenue increased by 4% to £198.5 million.
The interim dividend increased by 23% to 1.6 pence as the company unveiled a new policy to target a medium-term dividend cover of around 2.5 times underlying EPS.
The company said its full year expectations are unchanged, and approximately 92% of expected H2 revenue is in the order book as at 30 April 2021.
Chemring also announced the acquisition of Cubica group which it said would drive further scale. Shares jumped 5% to 322p.
Sports retailer JD Sports Fashion (JD.) said it had struck a non-binding agreement to sell Netherlands-based subsidiary Sports Unlimited Retail BV to Iberian Sports Retail, its 50.02% subsidiary based in Spain, for €16.5 million.
Iberian Sports Retail is more focused on the sporting goods sector than the core JD brand and would be better placed to drive growth and higher returns in Sports Unlimited Retail BV in the longer term, the company said. Shares dropped 1.6% to 933p.
Infrastructure group Balfour Beatty (BBY) said it had sold its 70% stake in the BC Children's & BC Women's Hospital redevelopment project phase 2 - Teck Acute Care Centre, located in Vancouver, Canada.
The disposal proceeds of £20 million were in excess of the directors' valuation as at 31 December 2020.
The pre-tax profit on disposal was £7 million with the end to end investment multiple in excess of the group's 2x target, the company said. Shares eased 1.6% to 310p.
A list of FTSE 100 movers can be seen HERE
