UK stocks remained in the red Tuesday lunchtime giving back some of yesterday’s gains as investors awaited the reopening of US markets following Monday’s Labor Day holiday.
At 12pm the FTSE 100 index of leading shares was down 0.3% at 7,166 points.
COMPANY NEWS
Packaging firm DS Smith (SMDS) released a trading update ahead of today’s annual general meeting showing strong growth in volumes against last year and 2019, especially in the US and Southern Europe.
The firm also said it was seeing ‘notable increases’ in energy and transport costs but thanks to strong demand for its products it was making ‘good progress’ in pushing through price increases to its customers. The shares added 2.2% to 459.5p to top the FTSE leader board.
House builder Vistry (VTY) posted forecast-beating first half results thanks to the continued boom in demand for new homes. Revenues for the six months to June were £1.26 billion, slightly ahead of the comparable period in 2019, while pre-tax profits hit £166 million and return on capital employed rebounded to 19.4% against 14.4% last year.
The firm also announced a 20p per share interim dividend and said it would accelerate its pay-out ratio this year thanks to strong cash flow generation and a lower average net debt position. The shares climbed 3.6% to £12.67.
Oil and gas exploration firm Cairn Energy (CNE) gave investors further details of its transformation. Along with the proposed return of up to $700 million in special dividends and share buybacks following the resolution of its tax dispute with the Indian government, Cairn is expanding into Egypt with a significant investment in gas-producing assets while plans are progressing to dispose of its North Sea assets by the end of this year. The shares nudged 0.2% higher to 195.3p.
Broking firm TP ICAP (TCAP) published a fairly unremarkable set of first half results with reported revenues down 5.5% to £936 million due to ‘subdued secondary markets’ and a strong prior-year comparison.
In spite of much-touted cost savings, earnings before interest and taxes dropped 44% to £57 million, giving a margin on sales of just 6.1% against 10.2% in the first half of last year. The shares sank 8% to 181.5p.
Clothing brand Ted Baker (TED), which has had its ups and downs over the past year, reported a 50% increase in sales for the second quarter to mid-August and said its transformation plan was on track.
Pleasingly, full-price sales improved which significantly boosted the trading margin, but fewer discounts meant online sales were lower. Also, the firm admitted it was struggling with some technical aspects of its new e-commerce platform, forcing it to delay its ‘go live’ date until early next year meaning it will miss the key pre-Christmas selling period.
Despite rallying more than 8% yesterday in anticipation of a positive update, the shares added a further 1.5% to 169.1p.
SMALL-CAP NEWS
Lighting firm Luceco (LUCE), a running Great Idea, reported a sharp increase in first half revenues and earnings thanks to a healthy UK residential repair, maintenance and improvement market and improving demand from commercial and overseas customers.
Revenues of £108 million were 51% higher than a year ago while pre-tax profits of £16.6 million were almost double last year’s level as the firm was able to pass on cost inflation through ‘proactive’ price updates and hedging. The shares dropped 1.9% to 463.5p.
Shares in Michelmersh Brick Holdings (MBH) gained 1.1% to 159.2p after the firm posted a 33% jump in first half revenues to £29.9 million and a 150% increase in pre-tax earnings to £5 million due to continued strong demand from the new housing and RMI markets.
With a strong order book and given the good start to the second half, the firm has reinstated the interim dividend and said it expects to ‘modestly’ top full year expectations.
Shares in prepared food delivery firm Parsley Box (MEAL:AIM), which have languished since stock market their debut in March after the company warned of a slowdown in sales, plunged 10.3% lower to 109p after the firm posted a wider first half loss.
Despite a 26% rise in first half revenues, due to a sharp rise in customer numbers, the firm continues to lose money with pre-tax losses of £5.4 million for the six months to June against a loss of £1 million in the same period last year.
FOR A LIST OF FTSE 100 RISERS AND FALLERS SEE HERE
