Portfolio

Babcock lowers full-year guidance, interim profit rises for Dunelm

By Josh White

Date: Wednesday 12 Feb 2020

(Sharecast News) - London open

The FTSE 100 is expected to open 11 points higher on Wednesday, having closed up 0.71% at 7,499.44 on Tuesday.
Stocks to watch

Engineering firm Babcock lowered its full year profit guidance range on Wednesday due to contract award delays in its aviation division and write downs in oil and gas operations. The company said it now forecast underlying operating profit of ?540m compared with a previous range of ?540m - ?560m. Revenue guidance was unchanged at around ?4.9bn. Babcock said it expected to make an ?85m charge after write downs in oil and gas assets and leases.

Homeware retailer Dunelm reported a rise in interim profit as like-for-like sales grew and said full-year pre-tax profit will be "slightly ahead" of the top of the latest range of analyst expectations. In the 26 weeks to 28 December, pre-tax profit increased 19.4% to ?83.6m, with like-for-like sales up 5.6% and revenue 6% higher at ?585m.

Plus500 reported a "robust" performance across its key metrics in its second half on Wednesday, which it put down to increased trading opportunities identified by customers. The FTSE 250 company said second half revenues were up 40% on the first half at $206.5m (?159.33m), while revenues for the full year ended 31 December slipped to $354.5m from $720.4m. Its second half EBITDA was up 93% over the first half at $126.7m, with full-year EBITDA down at $192.3m compared to $506m in 2018.

Newspaper round-up

Loss of nature will wipe ?368bn a year off global economic growth by 2050 and the UK will be the third-worst hit, with a ?16bn annual loss, according to a study by the World Wildlife Fund. Without urgent action to protect nature, the environmental charity warned that the worldwide impact of coastal erosion, species loss and the decline of natural assets from forests to fisheries could cost a total of almost ?8tn over the next 30 years. - Guardian

The broadcast watchdog, Ofcom, is to be handed responsibility for policing online platforms under government plans to be unveiled this week, it is understood. The government intends to present its draft legislation on online harm to MPs on Wednesday despite concerns from some critics that it could lead to censorship. - Guardian

Michel Barnier has told Sajid Javid not to "kid" himself as he dismissed UK demands to grant the City access to the European market for decades after Brexit. Mr Barnier insisted that Britain cannot get a long-term guarantee that its finance firms will be free to sell services into the European Union. The EU negotiator said Brussels will reject efforts to agree a financial services chapter in the new UK-EU trade deal or a long-term deal on "equivalence", the regime which is to govern Square Mile companies' access from the end of this year. - Telegraph

The top five executives at Ocado are to share an ?88 million payday, despite the online retailer suffering a ?215 million loss in its last financial year. Ocado revealed yesterday that its management team would receive the maximum possible from a five-year incentive scheme set up in 2014 because of the rise in the company's share price. - The Times

US close

US stocks turned in a mixed performance on Tuesday as Wall Street continued to shrug off worries about the economic impact of the Wuhan coronavirus outbreak.

At the close, the Dow Jones Industrial Average was flat at 29,276.34, while the S&P 500 was 0.17% firmer at 3,357.77 and the Nasdaq Composite saw out the session 0.11% stronger at 9,638.94.

The Dow closed just 0.48 points lower on Tuesday, while the S&P 500 and Nasdaq Composite carved out record closes following on from a positive performance on the Street in the previous session which saw indices bounce back from some losses at the end of last week.

While China's National Health Commission confirmed overnight that the death toll from the Wuhan coronavirus had risen to 1,016 people, with 42,638 confirmed cases, that number was the lowest seen since late January, increasing optimism regarding the nation's efforts to contain the outbreak.

While concerns regarding the economic impact of the outbreak were offset by some positive data, weighing on sentiment on Tuesday were comments from Federal Reserve Chairman Jerome Powell, who testified in front of the House Financial Services Committee that the central bank was "closely monitoring" the coronavirus for potential impacts to China and the global economy.

Powell added that it was "too early to say" how the outbreak would ultimately hit the US economy.

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