(Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Wednesday.
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FTSE 100 - WINNERS
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SSE, up 9.7%. The electricity utility reported a fall in full-year profit on exceptional charges, though it continues to target delivery of its five-year dividend plan. For the year ended March 31, SSE posted a pretax profit of GBP587.6 million from continuing operations, down sharply from GBP1.30 billion the year before. "Reported results for the year to 31 March 2020 were significantly lower than the previous year, reflecting pre-tax exceptional charges of GBP738.7 million recognised during the year; both in relation to the reshaping of SSE (with the sale of SSE Energy Services and the closure of Fiddler's Ferry coal fired power station) and a deterioration in market conditions," SSE explained. SSE recommended a full-year dividend of 80 pence, down 18% from 97.5p the year before. The reduced payout was in line with SSE's five-year dividend plan, which it said it continues to target.
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Berkeley Group Holdings, up 3.7%. The housebuilder reported a double-digit decline in earnings in its most recently ended financial year as home deliveries dropped, but maintained its payout plans. The Cobham, England-based property developer said revenue declined 35% in the year to the end of April to GBP1.92 billion from GBP2.96 billion a year earlier, taking pretax profit down 35% to GBP503.7 million from GBP775.2 million. "The reduction in profit before tax of 35.0% on the prior year was anticipated and reflects the progressive completion of a number of Central London developments acquired in the period from 2009 to 2013," Berkeley said. The company said it is maintaining a pretax return on equity target of at least 15% for the period stretching May 1 to April 30, 2025, which equates to annual pretax profit of GBP500 million for the six-year period. Of the GBP140.0 million shareholder return already announced to be made by the end of September, GBP6.0 million has been made to date through share buybacks, Berkeley noted. The amount that will be returned as a dividend will be announced on August 13, it said.
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FTSE 250 - WINNERS
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Serco, up 17%. The outsourcer said it expects a sharp rise in interim revenue with strong growth in underlying trading profit, and reinstated full-year guidance. In the first half, ending June 30, Serco expects to report underlying trading profit between GBP75 million and GBP80 million, about 50% higher year-on-year. Serco said the growth was driven primarily by its overseas businesses including the impact of the acquisition in August 2019 of the Naval Systems Business Unit of Alion in North America. Revenue in the period is expected to grow by about 23%, with organic growth of 14%. Serco is now guiding for full-year revenue of GBP3.7 billion, up from previous guidance of between GBP3.4 billion to GBP3.5 billion. Organic sales growth is now guided for about 9% from about 4% previously. Underlying trading profit will land between GBP135 million to GBP150 million, similar to previous guidance of about GBP145 million.
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Kingfisher, up 4.5%. The DIY retailer expressed a confident outlook going forward despite a sharp profit fall in its most recently ended financial year. The B&Q and Screwfix stores operator reported a 1.5% fall in revenue for the year to the end of January to GBP11.51 billion from GBP11.69 billion. On a constant currency basis, revenue declined by 0.8% year-on-year. Kingfisher explained that growth at Screwfix in Poland and Romania was offset by weaker sales at B&Q in France, Russia and Iberia. Pretax profit, meanwhile, dropped by 66% to GBP103 million from GBP300 million a year before amid GBP441 million of exceptional items, largely reflecting store and Russia impairments. In financial 2021, first quarter like-for-like sales were down 25% even though trading up to March 14 continued the "positive trends" seen in the fourth quarter of the recently ended year. However, second quarter like-for-like sales to date were up 22% amid strong e-commerce growth and the phased reopening of stores.
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FTSE 250 - LOSERS
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Domino's Pizza, down 7.6%. The pizza delivery chain said it expects earnings for the first half of 2020 to be lower than a year prior. While sales in the UK increased year-on-year, changes made to its operations in UK and Ireland during the lockdown period has resulted in higher costs, it said. From December 31, until June 14, like-for like sales were up 3.7%, driven by an increased order count. However, Ireland recorded a weaker performance as sales fell by 5.9%. Domino's said that while the UK operation benefited from an increased order count during lockdown, Irish business suffered from weak consumer spending generally. Domino's Pizza said changes implemented - such as re-routing all store deliveries to stop two-person deliveries, ensuring all stores are closed during restocking, changing its supply chain shift patterns, paying salary premiums and purchasing contact-free boxes and facemasks - has meant that it has incurred "considerable" costs.
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William Hill, down 5.3% at 131.58 pence. The bookmaker said it has raised GBP224 million through the placing of 174.9 million shares at 128 pence each. William Hill said that in conjunction with the placing, directors and members of the senior management team subscribed for a total of 160,013 shares. In addition, retail and other investors have subscribed in the offer made via the PrimaryBid platform for a total of 5.6 million shares. The placing shares, subscription shares and retail shares together represent just under 20% of the company's issued share capital prior to the fundraise. The new cash will "enable the group to pursue its long-term growth ambitions, strengthen its balance sheet and increase its strategic and financial flexibility".
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OTHER MAIN MARKET AND AIM - WINNERS
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boohoo, up 9.1%. The online retailer reported a "very strong" performance in the first quarter despite "these unprecedented and difficult times". In addition, the Manchester-headquartered company said it bought the online businesses and all associated intellectual property of two brands, Oasis and Warehouse, for GBP5.3 million in cash from Hilco Capital. boohoo said revenue in the three months to the end of May totalled GBP367.8 million, up 45% year-on-year, with strong underlying growth across boohoo, PrettyLittleThing and Nasty Gal. Despite the uncertain backdrop, boohoo said it delivered a strong gross margin performance, up 60 basis points year-on-year to 55.6%. Revenue growth for the current financial year ending February 2021 is anticipated to be 25%, with an adjusted earnings before interest, tax, depreciation and amortization margin of 9.5% to 10%.
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By Lucy Heming; lucyheming@alliancenews.com
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Dominos (DOM)
Kingfisher (KGF)
Berkeley Group (BKG)
SSE (SSE)
Serco (SRP)
Boohoo (BOO)