Portfolio

FTSE 100 movers: Taylor Wimpey sinks on results, HSBC manages gains

By Josh White

Date: Wednesday 26 Feb 2020

FTSE 100 movers: Taylor Wimpey sinks on results, HSBC manages gains

(Sharecast News) - London's benchmark index was flat in afternoon trading on Wednesday, clawing back some of its earlier losses, after health officials sounded the alarm in the morning over the near-pandemic status of the ongoing outbreak of the Covid-19 coronavirus.
At 1538 GMT, the FTSE 100 had broken above the waterline, and was trading 0.16% higher at 7,029.28.

Travel and tourism plays were mixed after a negative start to the day, with British Airways owner IAG in the green and accommodation operator Intercontinental Hotels Group broadly flat, while cruise operator Carnival and low-cost airline easyJet were both well into the red.

Taylor Wimpey was the leading loser, after it reported a 6% improvement in revenue to ?4.34bn for 2019, but a fall in operating profit to ?850.5m from ?880.2m, which it said reflected its volume growth, offset by rising build costs and flat house prices.

The housebuilder said that delivered an operating profit margin of 19.6%, down from 21.6% year-on-year, while the company's profit before tax and exceptional items was ?821.6m, falling from ?856.8m in 2018.

Sector peer Barratt Developments also saw its shares sink on Wednesday afternoon.

Retailers were also under pressure, after fresh research showed that shop prices continued to fall in February, being driven lower by weak consumer demand and stiff competition.

The BRC-Nielsen Shop Price Index reported a 0.6% decrease in February year-on-year, compared to a 0.3% decline in January.

Non-food prices fell 1.9%, compared to January's fall of 1.5%, the highest rate of decline since May 2018.

Supermarket chain Morrisons and footwear retailer JD Sports Fashion were both at the wrong end of the index.

On the upside, HSBC saw decent gains even after Berenberg reiterated its 'sell' rating on HSBC, arguing the blue chip bank's premium valuation was "unjustified".

The investment bank, which first downgraded its recommendation from 'hold' to 'sell' last December, said that the success of HSBC's strategic plans, which include reducing low-returning assets, continued to face challenges.

"First, we believe reinvestment of capital released by the plan may be more challenging and less profitable than anticipated," wrote analyst Peter Richardson.

On Tuesday, HSBC confirmed the impending closure of another 27 branches, claiming more customers were turning to online and mobile banking.

The cuts would leave the total of UK outlets at 594, and would include the closures of branches such as Regent Street and Kensington High Street in London.

FTSE 100 - Risers

NMC Health (NMC) 952.60p 8.23%
Smurfit Kappa Group (SKG) 2,752.00p 3.93%
Evraz (EVR) 370.20p 2.92%
HSBC Holdings (HSBA) 554.30p 2.71%
Ocado Group (OCDO) 1,124.50p 2.69%
Smith (DS) (SMDS) 348.20p 2.59%
Melrose Industries (MRO) 226.00p 1.76%
Rolls-Royce Holdings (RR.) 619.00p 1.58%
Antofagasta (ANTO) 809.20p 1.51%
GlaxoSmithKline (GSK) 1,624.80p 1.41%

FTSE 100 - Fallers

Taylor Wimpey (TW.) 209.60p -4.29%
Whitbread (WTB) 4,230.00p -2.89%
Compass Group (CPG) 1,817.00p -2.86%
Informa (INF) 724.40p -2.63%
Barratt Developments (BDEV) 785.40p -2.56%
JD Sports Fashion (JD.) 785.40p -2.46%
Morrison (Wm) Supermarkets (MRW) 172.60p -2.40%
Bunzl (BNZL) 2,004.00p -2.24%
ITV (ITV) 122.10p -2.12%
M&G (MNG) 223.40p -1.93%

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