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(Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Thursday.
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FTSE 100 - WINNERS
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Aviva, up 4.5%. The insurer said its financial performance in the first half of 2020 was "solid", thanks to a diverse range of products, excellent partners and swift operational response to the Covid-19 pandemic. Aviva added it will pay a second interim dividend of 6.0 pence per share and has decided to review its longer-term dividend policy "in light of our strategic priorities and the future shape of the group". Aviva's pretax profit for the six months to June 30 slumped 61% to GBP804 million from GBP2.05 billion recorded a year ago.Operating profit - the company's preferred profit measure - fell 12% to GBP1.23 billion from GBP1.39 billion. Excluding Covid-19 impact on general insurance claims of GBP165 million, operating profit was flat year-on-year. "These are resilient half-year results, demonstrating the benefits of the restructuring that has been taking place. Probably the biggest news to come out of this release was Amanda Blanc's statement surrounding a refocusing on the group's strongest markets being the UK, Ireland and Canada where they have the 'necessary size, capability and brilliant customer service to generate superior shareholder returns," said the Share Centre.
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Phoenix Group, up 4.0%. The life and pensions consolidator reported a substantial increase in written premiums, alongside a more than doubled profit for the first half of 2020. For the six months to the end of June, pretax profit more than doubled to GBP611 million from GBP217 million a year before, as the insurance firm's net written premiums rose by 37% to GBP2.17 billion from GBP1.58 billion. Gross written premiums meanwhile jumped by 32% to GBP2.46 billion from GBP1.86 billion. Total revenue grew by 28% to GBP2.48 billion from GBP1.93 billion the prior year; however, net income fell sharply to GBP3.07 billion from GBP20.41 billion, as net investment income declined to GBP534 million from GBP18.44 billion. Phoenix declared an interim dividend of 23.4 pence per share, in line with the year before.
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Mondi, up 3.5%. The paper and packaging firm said it is resuming dividend payments despite a double-digit profit fall in the first half of 2020. Mondi said it has delivered a robust financial performance in a challenging environment. For the six months to the end of June, revenue fell 8.4% to EUR3.45 billion from EUR3.77 billion a year earlier, resulting in pretax profit of EUR466 million, down 26% from EUR632 million. Mondi chopped its dividend for the half-year by 30% to 19.00 euro cents per share from 27.28 cents.In addition, the company said it will pay a 29.75 euro cents per share dividend relating to 2019. Going forward, Mondi said it is "well-positioned" for recovery with resilient business model, cost-advantaged asset base, strong balance sheet and unique portfolio of sustainable packaging solutions.
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FTSE 100 - LOSERS
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Glencore, down 5.1%. The Swiss commodities trader posted a swing to a loss for the first half of 2020 and said it will not pay a dividend but instead focus on reducing its net debt. Glencore said that for the six months ended June 30, it swung to a net loss of USD2.60 billion from a USD226 million profit last year, as revenue fell to USD70.96 billion from USD107.43 billion. Adjusted earnings before interest, tax, depreciation and amortisation dropped 13% to USD4.83 billion but was ahead of market expectations of USD4.29 billion. The company booked impairments of GBP3.2 billion as a result of lower commodity prices related to the uncertainty arising from the coronavirus pandemic. Glencore said it will not pay its deferred dividend, saying the economic outlook is too uncertain due to the coronavirus. The dividend was put on hold earlier this year due to the pandemic. It stated that it would instead focus on reducing its net debt to less than USD16 billion by the end of 2020.
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ITV, down 4.5%. The broadcaster offered a bleak picture to investors after its two main sources of revenue took a knock in the first half. ITV said pretax profit for the six months ended June 30, plunged 93% to just GBP15 million from GBP222 million recorded a year ago. Revenue for the half-year fell by 17% to GBP1.45 billion from GBP1.75 billion a year prior. The company saw its two main sources of income decline: advertising revenue fell 21% to GBP671 million, while production division - ITV Studios - saw a 17% drop in revenue to GBP630 million. ITV said it has decided not to pay an interim dividend in light of continued economic uncertainty. Looking ahead, ITV said that given the level of uncertainty for both ITV Studios and the broadcast unit it is not possible to provide financial guidance for the third quarter or the remainder of the year. "ITV has access to significant liquidity which will allow it to ride out this turbulence. But prosperity in the second half, and in the medium term, really rests on an advertising recovery. Advertising trends are likely to be subdued for some time, and it's hard to quantify at this point what the recovery is going to look like," said Hargreaves Lansdown analysts.
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FTSE 250 - WINNERS
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XP Power, up 6.5%. Liberum started coverage on the power supply products firm with a Buy rating.
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Synthomer, up 6.0%. The speciality chemicals firm reinstated its annual guidance and said it expects to pay a 2020 final dividend following a "resilient" first-half performance. The company added that there was no material disruption to operations through the Covid-19 pandemic as the chemical sector was largely designated as an essential industry. For the six months to June 30, Synthomer swung to a pretax loss of GBP4.7 million from GBP56.6 million profit in the year ago period. The loss was attributed to a large GBP63.1 million exceptional charge in the period versus GBP13.6 million charge a year ago. Underlying Ebitda inched higher, however, to GBP100.2 million from GBP99.7 million.
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FTSE 250 - LOSERS
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Hammerson, down 7.0%. The shopping centre operator announced a series of transactions to recapitalise the business and reduce leverage by a quarter after its loss widened in the first half of 2020. proposed a rights issue to raise gross proceeds of GBP552 million and the sale of substantially all of its 50% interest in VIA Outlets to a mutual fund managed by APG Asset Management NV for estimated cash proceeds of EUR301 million. Hammerson said it will implement a capital reorganisation, comprising a sub-division and share consolidation to reduce the nominal value of its existing shares. This should result in a higher market price for the consolidated shares and, accordingly, a more appropriate issue price in the rights issue. The capital reorganisation will result in Hammerson shareholders holding one consolidated share for every five existing shares. Hammerson then will offer 24 new consolidated shares for every 1 consolidated share. The rights issue will result in an offer of 3.68 billion new shares, representing 96% of the enlarged share capital following completion of capital reorganisation and the rights issue. Turning to results, for the six months to the end of June, net rental income declined by 44% year-on-year to GBP87.3 million, resulting in a pretax loss of GBP1.09 billion, widened from a loss of GBP319.2 million a year earlier.
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Meggitt, down 6.5%. The aerospace parts maker responded to a press report that is considering an equity raise by saying it is reviewing "a range of trading scenarios and associated actions to mitigate any material adverse change to the industry outlook". On Wednesday, Bloomberg reported that the UK aerospace and defence contractor is considering selling up to USD600 million in equity and is working with advisers to review equity and debt finding options. Citing people familiar with the matter, Bloomberg reported that one measure under consideration is a share sale equal to as much as 20% of Meggitt's issued share capital. In response, Meggitt said its financial position and liquidity "remain strong". It has continued to trade in line with internal expectations. "While there have been initial signs of a recovery in the civil aerospace sector, considerable uncertainty remains in relation to COVID-19," Meggitt said.
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OTHER MAIN MARKET AND AIM - LOSERS
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Hurricane Energy, off 17%. The oil and gas company said it will take a material downgrade on its estimated resources across its West of Shetland projects. Hurricane Energy said that a technical review found that the oil water contact in Lancaster field was shallower than expected. "Consequently, the company believes there is a risk of a material downgrade to estimated reserves attributable to the Lancaster Early Production System, and that there will also be a material downgrade to estimated contingent resources across the West of Shetland portfolio. This assessment does not take into account any production enhancement options for the Lancaster field which are currently under evaluation," Hurricane said.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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