Proactive Investors -
- FTSE 100 climbs 62 points to 8218
- Ladbrokes owner Entain (LON:ENT) appoints new CEO
- Ryanair (LON:0RYA) profits plunge and pricing warning hits sector
FTSE 100 strong but held back by airlines and hotels
The FTSE 100 is up around 60 points or 0.7% as we move post-meridiem, with only around four of the index's top 30 stocks in the red.
Rentokil, up 11% on bid reports, and Entain, up 4.2% on its new CEO appointment, are the top risers.
Burberry is up 4.1%, as investors continue ro reassess after its profit warning and change of CEO last week.
Analysts at Stifel put out a note this morning, saying: "Burberry aims to become a more democratic and inclusive brand, with a greater weight of classic timeless pieces in the assortment and price points more familiar to Burberry's traditional clientele. We believe that this should translate into a stronger entry-level offer, but within a genuine luxury context."
Airlines and associated companies are still the main drag on the index after Ryanair's update earlier, with easyJet (LON:EZJ) down 8%, British Airways (LON:ICAG) owner IAG down 4% and engine maker Rolls-Royce (LON:RR) down 0.6%.
Hotels groups are also being dragged down by the implications for consumer spending on holidays, with Premier Inn owner Whitbread (LON:WTB) and InterContinental (LON:IHG) Hotels Group both slipping 1.1%.
Several European stock benchmarks are outperforming London's, with Frankfurt's DAX and the CAC 40 in Paris both up 1.4%, the FTSE MIB rising 1% in Milan and the IBEX 35 in Madrid up 0.8%. The overall Euro Stoxx 600 has gained 1.2%.
Companies in distress
Numbers of UK companies in "significant financial distress" rose 8.5% in the past quarter and was up 37% year-on-year.
This may seem slightly at odds with the GDP forecast upgrade earlier, but these figures are from the first quarter of the year, when the country was emerging from a slight recession.
The Red Flag report from Begbies Traynor (LON:BEG) found the leisure & tourism, construction, food & drug retail and general retail sectors were under pressure.
In fact, all sectors experienced double-digit growth in financial distress over the last year, the report found, with 554,554 companies in ‘significant’ financial distress, up from 424,041 this time last year.
Numbers of companies in ‘critical’ financial distress fell 15.4% from the final quarter, though are still 20.1% higher than a year earlier.
Julie Palmer, partner at Begbies Traynor, said companies servicing lots of debt were facing the most problems, allied to ongoing changes in the consumer backdrop.
"While a fall in inflation to more palatable levels will likely provide some relief, consumers simply aren’t behaving like they used to and these businesses, who are still grappling with higher costs pushed up by higher wages, are really struggling."
Movers update
Shares in Hammerson PLC (LON:HMSO) spiked earlier after it announced a £1.5 billion sale of its interest in the company behind the Bicester Village outlet shopping park, though the rise has halved to just over 4%.
The sale of Value Retail to private equity firm L Catterton, backed by LVMH (EPA:LVMH) Moet Hennessy Louis Vuitton, will generate around £600 million in cash proceeds for Hammerson, which said the move would simplify its portfolio and allow it to focus on prime urban real estate.
Among small cap risers, Ceres Power Holdings PLC (LON:CWR) powered up 14% after announcing a new global long-term licence agreement for its solid oxide electrolyser cell technology with a global OEM based in the Asia Pacific region.
Analysts at Peel Hunt (LON:PEEL) said they anticipate the name of the new partner will be revealed in early August.
Ceres also issued a trading update for the first half of 2024, where this second new license deal in the financial year has led to revenue guidance being raised to £50-60 million, with gross margin also expected to rise.
Pennpetro Energy PLC vaulted more than 30% higher as it said a new well drilling is now expected to start in a matter of weeks.
A trading update from Fonix Mobile PLC sent its shares up 7% as profit and earnings ended the year ahead of market expectations, and the mobile payments and online messaging group added it had been selected as a Eurovision voting partner.
Tristel PLC scrubbed up 9% after the maker of infection prevention products said revenues in the first half of the year were higher than expected.
Arcontech Group PLC rose 5% after the financial market data provider released a brief yet bullish trading update