Shares in London have stalled a little with the FTSE100 and FTSE250 down marginally after strong gains at the start of the week. Our Trader writer Neil Wilson says: 'Wall Street snapped a three-day win streak after doubts were raised about Moderna’s potential vaccine. Some scientists asked by health news website Stat queried the data, or lack thereof. Stocks ran up against the bad news as energetically as they ran with the good. It just shows how the market is clinging to any kind of sort of good news.
European shares followed lower again on Wednesday. The FTSE 100 just held onto the 6,000 level yesterday but opened lower this morning. Basic resources, financials and banks were the leading losers. Indices are within recent ranges as the tug-o-war between the economic reality on the one side and the twin hopes of stimulus and scientific research on the other play out.' For Neil's full article, click here.
IC TIP UPDATES:
Marks and Spencer (MKS) full year pre-tax profits fell 20 per cent to £67.2m, with operating profits in the retailer’s embattled clothing division slumping 37 per cent after first half availability problems in womenswear clothing, and second half issues in moving its menswear towards towards a more contemporary style and fit. Marks and Spencer has recorded £212.8m in costs and stock write-downs linked to coronavirus, and a profit hit of around £52m in March linked to the pandemic. Sell.
AstraZeneca’s (AZN) Lynparza treatment has been approved in the US for patients with a type of metastatic prostate cancer. Lynparza is currently under regulatory review in the EU and other jurisdictions. Buy.
Aviva (AV.) has bumped up non-executive George Culmer to the role of chairman, four months after the insurance giant announced Sir Adrian Montague would step down this year. Investors will hope Mr Culmer can either drill some focus into a company whose shares have underperformed peers for several year – or press for a breakup. Under review.
Bloomsbury Publishing (BMY) anticipates that in a ‘severe but plausible’ downside scenario, print revenues could drop by 60 to 65 per cent for the three months of expected global restrictions to July 2020 and gradual recovery through to March next year. The publisher said that orders for print books, which accounted for 79 per cent of total revenue in 2020, are being impacted across all its markets. The group will not pay a cash dividend and instead has proposed the issuance of new ordinary shares by way of bonus to shareholders, with a value equivalent to the proposed final dividend. Under review.
KEY STORIES:
Great Portland Estates (GPOR) rent collection for the second quarter stands at 71 per cent, with two-thirds of the outstanding balance relating to the retail, leisure and hospitality sectors. The commercial landlord also reported seven tenant delinquencies, equivalent to 1.3 per cent of the annual rent roll. During the year to March, rental income rose 3 per cent on a like-for-like basis, although a continued devaluation in the retail portfolio meant the group valuation declined 0.3 per cent. The group’s three development schemes are 48 per cent pre-let or under offer but it expects some delay to completion following site closures.
OTHER COMPANY NEWS:
Canadian developer Pure Gold Mining (PUR) will raise C$15m (£8.8m) from financier Eric Sprott in a new share issue. The news sent the company’s shares up 16 per cent in London, to 80p. Pure Gold, which has its principal listing in Canada, is re-opening the Madsen underground mine in Ontario. The C$15m will go towards “aggressive resource growth” at the brownfield project, which will have its first gold pour by the end of the year.
Playtech (PTEC) posted a mixed performance in its first quarter, as elements of its business are severely impacted by lockdowns in various countries and the absence of major sporting events. However its online Casino, Bingo and Poker businesses have seen significant increases in activity and adjusted cash profits have come in at €117 million. Management also flagged that it had added more than 20 new brands so far in 2020 and is on track to surpass its target of 50 for the year.
Frontier Developments (FDEV) expects operating profit for 2020 to be materially ahead of the top of its previous guided range of £11-13 million, following an uptick in demand for its games due to global lockdowns. The developer’s most recent launch, Planet Zoo, crossed the 1 million mark in early May for cumulative base game unit sales, less than six months after its initial release.
Two months after its spinoff from Investec, asset manager Ninety One (N91) has today released its first full-year results as a standalone company. Earnings of 16.8p per share were 10 per cent of market expectations, leading Numis to flag a modest upgrade for this year’s pre-tax profits. But while the group expects clients’ risk appetite to increase as volatility fades, “significant revenue pressure in the coming period” is also forecast.
It’s “one in, one out” at bill payments group PayPoint (PAY), which today announced the appointment of chairman Nick Wiles to the role of chief executive, and the resignation of Rachel Kentleton as finance director. Audit committee chairman Giles Kerr will take over board management responsibilities, while UK finance head Alan Dale has been promoted to the interim FD role on an interim basis. With the shares up 2 per cent, investors appear satisfied with the continuity moves.
