London-listed housebuilders have been among today’s notable UK share prices, as disappointing results from building supplier SIG (LON:SHI) pressured the sector. A shock profit warning meanwhile has fuelled a selloff in aviation servicing company John Menzies (LON:MNZS).
SIG pressures housebuilders
Specialist building materials company SIG is in the doldrums this Friday as it updated investors on its six-month performance, posting a 3.8-percent fall in like-for-like revenues over the period. Group revenues from continuing operations were 5.7 percent lower in the period, including an adverse 1.3-percent currency movement and a 0.6-percent impact from fewer working days.
“Trading conditions remain challenging in many of the Group’s end markets and there has been a marked deterioration in the level of construction activity in the UK as the year has progressed,” the company pointed out in a statement, while trying to reassure investors that the transformation of its businesses, along with seasonality, “should enable delivery of a stronger second half to the year”.
“As such, the Board continues to believe that underlying profitability for the full year will be delivered in line with its expectations, but will continue to monitor how trading conditions develop,” SIG cautioned.
Proactive Investors reports that analysts at Jefferies had previously forecast that the FTSE 250-listed firm’s sales will continue to contract into May and June and so see the full interim results “as a bigger potential catalyst for the share price, as this is when it will be seen if management’s expectation of a strong profit up-tick in 1H19 has materialised”.
SIG’s share price has given up a little more than four percent in early afternoon trade. The results have also pressured shares in blue-chip housebuilders, with Barratt Developments (LON:BDEV) trading about 1.3 percent in the red and Taylor Wimpey (LON:TW) having given up about 1.6 percent. Persimmon (LON:PSN) is more than three percent worse off. FTSE 100 building materials company CRH (LON:CRH) is also underperforming the market with about a 0.9-percent drop intraday.
Elsewhere in the London market, John Menzies has sunk as it issued a profit warning, pointing to ‘disappointing’ trading across the group amid challenges in the wider aviation market.
“Against this backdrop, performance in the first half of the year has been below expectations and consequently the Board now believes that earnings for the full year are not expected to exceed last year,” the London-listed company said in its trading update.
“Lufthansa’s recent profit downgrade cited an almost halving of its cargo margins and IATA reduced its full-year growth outlook for air freight to 0% in June. Clearly Menzies is not immune to these market issues,” Berenberg analysts said, as quoted by Reuters. Shares in the aviation services company are down by more than 10 percent.
In blue-chip movers, British Airways and Iberia parent International Consolidated Airlines Group (LON:IAG) is flying lower as said that its traffic, measured in revenue passenger kilometres, had increased by 6.3 percent in June, versus the same period last year. In other news, Bloomberg reported that the FTSE 100 group had said that it had no plans to revive a bid for discount rival Norwegian Air Shuttle following a Spanish report that an offer was likely to be made in the next 15 days. IAG’s shares are about 0.5 percent, marginally underperforming the benchmark FTSE 100 index.
UK share prices to watch next week
Next week will provide some excitement on the corporate front, with Ocado (LON:OCDO) scheduled to update investors on its half-year performance on Tuesday. IG reports that according to Bloomberg estimates, the online grocer’s half-year earnings are expected to have fallen 14.2 percent, while revenue is forecast to have climbed 11.6 percent to £1.76 billion.
“Ocado’s transition from just an online supermarket to a provider of technology to similar firms around the world is complete, and the share price has responded with enthusiasm,” Chris Beauchamp, chief market analyst at IG, commented in a note this week, adding that while the average move on results day stood at five percent, “at present options pricing points towards a move of 3.4 percent”. The analyst further noted that volatility in Ocado’s share price has been relatively consistent since May last year, “with the 14-day average true range oscillating around 38p”.
Other UK share prices to watch next week will include Micro Focus (LON:MCRO) which set to post its interims on Tuesday, while Barratt Developments (LON:BDEV) will follow with a trading announcement on Wednesday.