As expected, Vodafone (LON:VOD) has remained among this week’s UK share prices to watch for a second day, swinging from gains to losses amid a broader London market rally. Tomorrow meanwhile promises to deliver a string of corporate updates, including TUI Group (LON:TUI) and Kingfisher (LON:KGF).
Vodafone volatile after dividend cut
Vodafone’s stock has been volatile in today’s session, after suffering a beating yesterday amid reports that the blue-chip telco might trim its dividend. Those fears materialised this morning as the telecoms group said that it was ‘rebasing’ its payout to shareholders, while, however, vowing to progressive dividend policy going forward.
“The reduction to the dividend is prudent, given the enormous constraints on cash flow […] even after the cut, the yield will remain punchy,” said Richard Hunter, head of markets at interactive investor, commented, as quoted by Reuters. “Now that the challenges are in plain sight, perhaps investors will give consideration to some of the potential for the company.”
Proactive Investors meanwhile quoted Russ Mould at AJ Bell as commenting on the rise in Vodafone’s shares, noting that the market had done a pretty good job of factoring in news ahead of time.
The blue-chip telco further logged a €7.6-billion loss for the financial year ended March 31, primarily due to a loss on the disposal of the telco’s business in India which merged with local provider Idea Cellular. Vodafone’s share price has given up about 0.40 percent in early afternoon trade, underperforming about a 0.9-percent rise in the FTSE 100 index. Shares in the telecoms group were changing hands about two percent higher in morning trade.
Sales, marketing and support services group DCC (LON:DCC) has been another prominent blue-chip riser as it posted a rise in full-year revenue and earnings, and flagged profit growth in the new financial year. DCC’s shares are about three percent better off this Tuesday.
Asset manager Standard Life Aberdeen (LON:SLA) meanwhile is outperforming the FTSE 100, having issued a first-quarter update ahead of its annual general meeting in Edinburgh today. The blue-chip group posted a rise in assets under management and administration, helped by positive market movements which were partly offset by the strength of sterling. Shares in SLA are up by about 1.4 percent.
Royal Dutch Shell’s (LON:RDSA) shares have been moved by analyst comments, as HSBC turned bullish on the Anglo-Dutch energy major. Sharecast reported that considering that the break-even crude price for the oil major was in the low-$50s, the analysts had concluded that Shell was now set to enjoy “a period of sustained excess free cash flow and strong cash distributions, and the growth outlook is solid”.
“Any messaging in this regard at the 4 June Management day could be important for investor sentiment, as would reassurance that the capital framework includes any possible acquisitions,” the broker pointed out. The oil major’s shares are about 1.2 percent up intraday.
At the other end of the spectrum has been Land Securities (LON:LAND), whose shares have been sold off as the company revealed that its full-year loss had widened to £119 million, from £44 million in the prior-year period. The property group’s shares are about 1.6 percent down at 877.80p.
Wednesday’s UK share prices to watch
TUI’s half-year results are likely to be one of tomorrow’s highlights in the UK corporate calendar, after the blue-chip tour operator flagged a €200-million hit to profits due to the Boeing 737 MAX grounding, assuming flight resumption with the aircraft by mid-July. As a result of the one-off impact, the tour operator expects an underlying EBITA rebased for FY19 of about minus 17 percent, from expectations for ‘broadly flat’ previously. Investors, therefore, will likely eye an update on that forecast, with any additional provisions likely to depress the shares.
Kingfisher, which is another blue-chip reporting tomorrow, is also in a tight spot after announcing the departure of its chief executive Veronique Laury at the end of the financial year. Aaran Fronda at IG commented in a note last week that investors would be eager for an update on who will replace Laury and be hoping that the company’s turnaround plans have finally begun to reap rewards.
Other blue-chips reporting tomorrow include Compass Group (LON:CPG) which is due to post its half-year results tomorrow. The update will come after the catering company said in February that it now expected to be slightly above the middle of its target organic growth range for the full year.
British Land (LON:BLND), Micro Focus (LON:MCRO), Hargreaves Lansdown (LON:HL) and Experian (LON:EXPN) will also be among tomorrow’s UK share prices to watch on the back of their respective reports.
If you’re interested in stocks on the other side of the Atlantic, check out this week’s Day Trading Stock Picks – US and Canadian Lists. For some trading basics, here’s our video on What to Focus On As a New Trader.