London's indices are up solidly this morning as traders ignore political uncertainty around the UK election result and welcome the news from the US overnight where the Fed kept interest rates on hold. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
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Purplebricks (PURP) reported a 2 per cent rise in revenue on a pro-forma basis during the six months to October, although a rise in marketing and administrative costs meant the hybrid estate agency swung to a £1.2m operating loss. The gross profit margin also suffered from an increased proportion of buyside work in Canada, declining to 60.8 per cent, from 62.1 per cent the same time the prior year. Sell.
A stronger sterling and lower power prices will hit John Laing’s (JLG) end of year net asset value to the tune of £97m. The infrastructure builder, operator and owner also said its planned “value enhancements” have the forecast impact and so its NAV could be below market expectations even before the £50m foreign exchange loss. Its NAV was £1.6bn on June 30. The news saw the company’s share price plunge 17 per cent in early trading to 322p, before recovering slightly to 339p. John Laing has already seen sizeable impairments this year, with transmission issue causing a £66m write-down on Australian renewable energy assets. The company said it still had a “growing pipeline” of investment opportunities and its asset sales plan was on target. Buy.
Shares in Superdry (SDRY) are down 4 per cent this morning as the results for the half-year to October showed revenues down 11 per cent and profits almost completely wiped out. The reporting period came after Julian Dunkerton’s return as chief executive, but he warned the group was “eight months into a process that will take two to three years”. Trading in the peak trading period has apparently been promising, including the group’s “biggest online trading day ever”. Mr Dunkerton has little to show for his efforts at the moment, but we are reviewing our sell recommendation.
Versarien (VRS) half year pre-tax losses more than doubled on its prior interim period, with the graphene business experiencing a 16 per cent fall in revenues. The group’s cash outflow, which leaves it with £2.6m in cash and cash equivalents at the end of the period, will prompt questions over whether Versarien will need to conduct a fundraising round. Versarien shares plummeted in early trading before recovering. Sell.
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Costain (COST) has issued a profit warning after an arbitration decision over a Welsh road contract went against it. The company’s share price fell 17 per cent on the news, which came just a day after an £8.9m write-down over the sale of its Spanish golf course business. The arbitration decision will see Costain’s underlying profit for 2019 to be £17-19m, instead of the £38-42m guided in August. The company previously said the Wales dispute had come after the scope of the A465 project was increased. “The arbitration award effectively splits the responsibility for the design information between both parties,” Costain said.
Last month’s painful trading update may have taken the shine off a “truly transformational” period for Fuller’s (FSTA), but the pubco still managed to post a 1 per cent increase in adjusted earnings per share for the 26 weeks to 28 September. However, on a continuing basis (whereby cash from the sale of the beer business to Asahi is excluded), then one-off items meant statutory profits declined to £11.1m, from £15.1m a year ago. The interim dividend has been maintained at 7.8p per ordinary ‘A’ share.