Blog: FTSE swings to red after Brexit deadline delay and lockdown threat – Shares magazine

UK shares swung to the red by lunchtime on Wednesday with the benchmark FTSE 100 index hit by rising Brexit uncertainty, the growing threat of another national lockdown and a rise in the pound.

Prime Minister Boris Johnson has reportedly pushed back the deadline for a Brexit deal to be completed, with the original deadline for a trade deal with the EU of 15 October scrapped as talks are now set to continue until the end of the month.

Meanwhile work and pensions minister Therese Coffey told Sky News earlier today that Johnson isn’t keen on a national lockdown following calls from Labour leader Keir Starmer for a two-to-three week ‘circuit breaker’.

Also hurting the exporter-heavy index was a rise in the pound against the dollar.

Just after 12pm, the benchmark FTSE 100 fell 0.16% to 5,960.55.

STOCKS ON THE MOVE

UK and Europe-listed food-ordering firm Just Eat Takeaway (JET) on Wednesday said it had received 46% more orders in the third quarter than a year earlier, as a surge in online orders due to coronavirus social distancing measures continued.

Order growth accelerated from an increase of 32% in the first half of 2020, with orders up 47% in Germany and 43% in the UK. Restaurants in the Netherlands delivered a third more meals through the company’s platform.

Just Eat shares topped the FTSE 100 leader board, jumping 5.6% to £93.40

Distribution business Bunzl (BNZL) was also firmly higher, up 3.6% to £26.46, after telling the market that strong sales of Covid-19 related products had more than offset the impact of weak economic activity on its business in the year to date.

Revenue in the second half of the year is expected to grow ‘strongly’ while second-half operating profit margin should be ‘slightly higher’ than last year.

British online fashion retailer ASOS (ASC:AIM) reported a massive jump in full-year profit, benefiting from strong demand during the Covid-19 pandemic and forecast more improvement in the 2020-21 fiscal year.

ASOS, whose fast fashions are popular with younger adult shoppers, made a pre-tax profit of £142.1 million in the year to 31 August. While that was in line with guidance in August and up on the previous year’s £33.1 million, investors are clearly harbouring concerns about how retail will hold up as lockdown restrictions increase, sending the shares plunging more than 9.7% to £48.57.

PENT-UP HOUSING DEMAND

Housebuilder Barratt Developments (BDEV) reported a near 17% jump in forward sales value, benefiting from strong pent-up demand for its homes following the end of a coronavirus-led lockdown.

The company, which builds homes in England, Scotland and Wales, said total forward sales as at 11 October rose 16.7% to 15,135 homes and at a value of £3.65 billion.

Barratt shares moved 2.35% higher to 556p.

Global recruitment firm PageGroup (PAGE) reported a 31.9% fall in third-quarter profit on Wednesday as companies refrained from hiring new employees during the ongoing health crisis, while adding that markets in Mainland China and Japan were either flat or returning to growth.

Gross profit in the quarter ending Sept. 30 was £143.5 million compared with £216.8 million a year earlier. The shares gained 1.95% to 419.2p.

Education group Pearson (PSON) traded almost flat at 569.6p after saying it was on course to match market expectations, as demand for online learning helped soften the impact from cancelled tests and closed schools due to Covid-19.

G4S (GFS) on Wednesday said profit for the nine months ended 30 September was ahead of last year, helped by a tight check on costs even as the British security firm’s revenue slipped 2% during the period.

The London-listed company, which has been fending off a hostile takeover bid from Canada’s GardaWorld, said it has retained and won contracts with an annual revenue contract value of £2 billion in the nine months to 30 September.

G4S shares also traded effectively flat at 209.4p.

MOVERS ELSEWHERE ON THE MARKET

Digital transformation business and running Shares top idea for 2020 Kainos (KNOS) soared more than 27.45% to £13.00 after issuing another strong trading update. The company said ongoing customer demand remained high and had resulted in a ‘very strong trading performance’ between 1 April to date, driven by the structural shift of digital adoption.

The company said its digital services customers continued to ‘prioritise digital transformation programmes in the NHS and public sector.’ Its Workday practice continued to ‘benefit from its international scale and an ability to secure new consulting contracts across all our geographies,’ it added.

Shares flagged Kainos for a good 2020 at 718p in December 2019.

Chemicals company Synthomer (SYNT) soared 17.8% to 392.2p, having upgraded its annual earnings guidance and reinstated its dividend after demand for its latex products spiked during the Covid-19 crisis.

Synthomer’s earnings before interest, tax, depreciation and amortisation for the year through December were now expected at around £232 million, some 10% higher than previous guidance.

Emerging markets-focused money manager Ashmore (ASHM) rallied 6.34% to 386p after telling investors that its assets under management rose 2.3% to $85.5 billion (£66 billion approx..) during the first quarter.

The firm said it recorded a positive investment performance of $2.7 billion and net outflows of $800 million over the period.

Angling Direct (ANG:AIM) plunged 4.64% to 65.32p despite reporting a profit surge in its first half as the fishing tackle retailer highlighted ‘considerable resilience’ in its trading performance for the period.

For the six months ended July 31, 2020, the company posted a pre-tax profit of £1.4 million, up from £0.4 million in the prior year, while revenues jumped 21% to £32.1 million.

Eastern European focused drinks maker Stock Spirits (STCK) advanced 6.44% to 239.5p on announcing that annual trading was ahead of its expectations, with volumes up in Poland and the Czech Republic.

Surveillance systems group Petards (PEG:AIM) jumped 28% to 8.32p after it won a contract worth more than £1.3 million from Porterbrook Maintenance for the supply of systems in trains.


Issue Date: 14 Oct 2020    

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