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UK market update – Rolls-Royce maintains forecast, Lloyds shares downgraded

Published 05/08/2021, 08:39
Updated 05/08/2021, 08:41
© Reuters.
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By Samuel Indyk

Investing.com – At 08:39BST, the FTSE 100 is trading lower by 0.1% at 7118.15. The midcap FTSE 250 is trading flat at 23,353.80.

In FX markets, GBP/USD is trading at 1.3917, EUR/GBP is trading at 0.8510. The US Dollar Index is down 0.05%.

Today’s calendar highlights include the Bank of England’s latest monetary policy decisions at 12:00BST. Weekly initial jobless claims from the US are released at 13:30BST.  

Friday is the July US Nonfarm Payrolls report.

Stocks

WPP (LON:WPP) (+3.0%) - Returned to 2019 levels a year ahead of plan. Raised guidance for full-year. £350 million share buyback planned for H2. Boosts interim dividend by 25% to 12.5p.

Rolls-Royce (LON:RR) (+1.1%) - Underlying operating profit of £307 million, up from a loss of £1.630 billion in 2020 H1. Strong liquidity position with no maturities before 2024. Target (NYSE:TGT) to turn free cash flow positive during the second half 2021. On track to meet forecasts.

EVRAZ (LON:EVRE) (+0.9%) - Consolidated EBITDA up 94% YoY to $2.082 billion. Interim dividend for 2021 of $802.3 million ($0.55 per share) has been declared. Expect global markets to remain fairly healthy in H2, despite a possible correction in steel prices.

Glencore (LON:GLEN) (+0.3%) - Higher commodity prices lift adjusted EBITDA to $8.7 billion, up 79%. Announced additional distribution of $0.04 per share plus a $650 million share buyback.

Frasers Group (LON:FRAS) (-0.7%) - Revenue down 8.4% to £3.625 billion. Covid uncertainty means board cannot currently confirm with enough material accuracy what the outcome for FY22 will look like. Mike Ashley to step down as CEO next year.

Serco (LON:SRP) (-0.5%) - Revenue up 19% to £2.2 billion. Underlying trading profit up 58% to £123 million. Guidance for 2021 remains unchanged. About 17% of first half revenues were directly associated with supporting governments in their response to Covid-19.

Hammerson  (LON:HMSO) (-1.8%) - H1 like for like net rental income flat YoY. Focused on continuing to de-lever the balance sheet through disposals of non-core assets. Declared a cash dividend of 0.2 pence per share.

Savills (LON:SVS) (+5.0%) - Group revenue up 18% to £932.6 million. Declares interim dividend of 6.0 pence per share. Expect some discretionary cost to start to normalise and certain markets to moderate in the second half of the year. Board expects the performance for the year as a whole to be meaningfully ahead of its previous expectations.

Centamin (LON:CEY) (-2.3%) - Revenue for H1 was $367.4 million from gold sales of 203,802 ounces at average price of $1,799/oz. Declared an interim dividend of $0.04 per share. Maintains gold production forecast at 400,000 to 430,000 oz.

Lloyds Banking Group (LON:LLOY) (-3.1%) – Downgraded to sell from neutral at Goldman Sachs (NYSE:GS).

Sectors

Travel & Leisure - France removed from UK’s amber-plus list. Germany, Austria added to UK’s green list, alongside five other countries.

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