As expected, specialty chemicals company Johnson Matthey (LON:JMAT) has been one of this session’s UK share prices to watch, posting a sharp drop with investors digesting its full-year results. The broader London market meanwhile has seen some recovery on the back of stronger oil, however, with a lid on gains with investors continuing to monitor the ongoing trade tensions between the US and China.
Johnson Matthey down on Thursday
In FTSE 100 companies, Johnson Matthey is underperforming the broader market, even as it reported a 48-percent surge in full-year operating profit. The company’s revenue meanwhile came in five percent higher for the 12 months ended March 31.
“While sales performance was good, the operating profit figures were a little more mixed, with profits at the New Markets division falling to just £2mln, an 85-percent fall,” noted Helai Miah, an investment research analyst at The Share Centre, as quoted by Proactive Investors. Johnson Matthey’s share price has given up nearly four percent in early afternoon trade, significantly underperforming the benchmark FTSE 100 index which has moved into positive territory to stand about 0.4 percent higher.
In mid-caps, FirstGroup (LON:FGP) is shining this Thursday as after announcing rationalisation plans which will see the company focus on its core American businesses First Student and First Transit, and put US coach service Greyhound up for sale. The move comes amid pressure from US hedge fund Coast Capital which holds a 9.7-percent stake in the company and has been pushing for a radical overhaul of the group.
“Greyhound is in long term structural decline and absorbs considerable management time without offering upside potential, and therefore disposing of it is optimal,” Investec analysts wrote, as quoted by Reuters. First Group’s shares are changing hands more than five percent higher, outperforming about a 0.8-percent gain in the mid-cap FTSE 250 index.
Daily Mail and General Trust (LON:DMGT) meanwhile is rallying on the back of its half-year report which revealed a 19-percent rise in adjusted profit before tax.
“The highlight of DMGT’s 1H results was their comment that FY19E Consumer Media revenues (46% of group revenues) should be better than expected, with a low single digit decline vs mid-single digit previously guided,” analysts at Liberum pointed out, as quoted by Proactive Investors. The group’s shares are trading more than eight percent higher.
Elsewhere on the London market, De La Rue’s (LON:DLAR) shares have lost nearly thirty percent of their value today as the company flagged lower profit in the new financial year, noting that the banknote market was “anticipated to become increasingly competitive as the strong demand driven by overspill in the last few years starts to normalise,” creating ‘significant headwinds’ for the group. The banknote maker further announced that it had decided to part ways with its chief executive. De La Rue’s shares are down by more than 29 percent in early afternoon trade.
Tomorrow’s UK share prices to watch
Airlines are likely to be among tomorrow’s UK share prices to watch, with London-listed lowcost carrier Wizz Air Holdings (LON:WIZZ) set to update the market on its full-year performance. IG reports that the company is expected to post pre-tax profit of €293 million, up from €286 million a year earlier, while revenue is forecast to have climbed by a fifth to €2.3 billion. Earnings per share meanwhile are expected to come in four percent higher at 2.27 cents. The results will come after low-cost peers easyJet (LON:EZJ) and Ryanair (LON:RYA) both pointed to industry challenges in their respective results, with the former posting an interim loss, and the latter saying that its full-year outlook remained cautious on pricing.
“Budget airlines face major challenges, as recent updates from easyJet and Ryanair have demonstrated,” Chris Beauchamp at IG commented in a recent note, adding that Wizz Air’s shares were trading “at around 15.9 times forward earnings, a relatively high number for a company facing many headwinds”.
“As a result, any failure to meet or beat expectations in its FY results could provoke some significant downside,” he pointed out.
Proactive Investors, however, reports that analysts at Numis expect the airline to continue to take market share from national and legacy carriers as Wizz is one of the lowest cost airlines and “material cost tailwinds” are yet to come in.
London-listed mining stocks are also likely to see some moves tomorrow, with China, the world’s top metals consumer, scheduled to post its NBS manufacturing purchasing managers’ index (PMI) and the Caixin non-manufacturing PMI for May before the UK market opens. IG reports that the manufacturing PMI is expected to have fallen to 49.9 from 50.1, slipping into contraction territory, while the non-manufacturing PMI is forecast to have dropped to 51.4 from 54.3.
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