UK stocks opened weaker on Tuesday after markets digested the re-appointment of Fed chairman Jerome Powell amid concerns that the rate of reduction in monetary stimulus would be accelerated to counter inflationary pressures.

Brent crude futures were almost 1% lower at $79.2 a barrel while Gold was flat at $1,804 an ounce. Trading in Asia was quite with China’s SE Composite and Japan’s Nikkei 225 up 0.2% and 0.1% respectively.

At 08:45 the FTSE 100 index of leading shares was down 0.6% at 7,211.

AO PLUNGES 25%

Online white goods retailer AO World (AO.) saw its share price fall sharply in early trading after the company reported revenues and profits significantly below previous guidance.

The FTSE 250 company blamed UK delivery driver shortages and supply chain issues, while some shoppers have gone back to their old bricks and mortar shops.

Revenues for online electrical retailer of £760 million for the six months ended 30 September. That was up 6% year-on-year, though nothing like the double-digit growth it had once hoped.

Water company Severn Trent (SVT) said first half revenues grew 8% to £958 million while profit before interest and taxes was almost 14% ahead at £256 million.

Growth was driven by higher consumption of non-household consumption as more customers returned to normal operations after restrictions were lifted.

Adjusted earnings per share were up 6% to 54.4p reflecting an exceptional deferred tax charge. The board recommended an 0.6$ increase in the interim dividend to 40.86p per share. The shares dropped 1.5% to £27.54.

Construction company CRH (CRH) said nine-month sales through September increased 11% to $22.8 billion which drove a 15% growth in EBITDA (earnings before interest, taxes, depreciation, and amortisation) to $3.9 billion.

The company said underlying demand and pricing progress continued across key markets and it expected full-year EBITDA to be more than $5.25 billion, along with further margin expansion. The shares gained 1.3% to £37.02.

Food services company Compass (CPG) said fourth quarter underlying revenues recovered to 88% of 2019 levels and margins improved to 5.4%.

For the full year underlying revenues were 6.3% lower at £18.1 billion while operating profit was 55.4% higher at £811 million reflecting a 1.6% increase in operating margin to 4.5%.

The company expected organic revenue growth of between 20%-to-25% in fiscal 2022 and anticipated the underlying operating margin to be over 6%. Progress was expected to be second half weighted due to ‘mobilisation costs and inflationary pressures during H1’ the company said.

The dividend pay-out policy was reinstated to be around 50% of underlying earnings per share. The shares dipped 0.7% to £14.62.

PET OWNERSHIP BOOST

Shares in pet supplies retailer Pets at Home (PETS) leapt 3.6% higher to 478p after the company said it expected full year profit to be at the top end of analyst expectations.

First half profit jumped 81% to £70.6 million as revenues climbed 8% to £677.6 million, boosted by pet ownership.

The interim dividend per share was increased by 72% to 4.3p year-on-year. The company said it now saw a pathway to £2.3 billion of revenues over the medium term.

Industrial thread manufacturer Coats (COA) said revenues grew 22% across the four months to 30 October and eclipsed 2019 levels by 6% driven by market recovery and market share gains.

Looking ahead, the company anticipated performance for the full year 2021 would be in line with its expectations. The shares added 0.6% to 68.5p.

Food producer Cranswick (CWK) said first half profit was 17.7% higher at £63.2 million as revenues climbed 6.6% to £993.1 million driven by elevated retail demand offset by reduced revenues from its Far East export markets.

The interim dividend was increased by 7.0% to 20.0p per share from 18.7p per share previously. The company said labour and supply chain pressures had been well managed with excellent customer service levels maintained.

The company maintained its outlook for the full year and said it was proactively managing rising input costs. The shares added 1.7% to £36.92.

News publisher Reach (RCH) said revenue growth was currently ahead of full-year expectations following a recovery in digital advertising despite growth returning to a more normalised pattern in the second half of the year.

For the period from 28 June 2021 to 21 November 2021, revenues grew 1.2% overall, with digital up 17.2% and print down 3.5%. The shares dropped 4% to 289.6p.

A list of FTSE 100 index movers can be seen HERE

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Issue Date: 23 Nov 2021