The popular chain of discount retail stores published full year numbers this morning but despite an impressive 10% upturn in revenue along with expectations that the company can grow its network of 741 UK stores to more than 1200 in the long term and profits falling in line with expectations, the market failed to buy into the good news story. A lack of forward guidance may be behind the negative sentiment although there’s also a point where the growth of stores risks cannibalising demand. Shares were down more than 5% in the first hour of trade.
Another stock struggling in early trade on Wednesday was Centrica who published a pre-AGM statement before the opening bell. Whilst the underlying theme was one of the company plotting a steady course with sustainable profit ranges being achieved earlier than had been expected, falling prices are expected to hit the second half performance and this appears to have taken a toll. Shares were down by more than 5% in early trade before some support emerged.
Half year results from FTSE-250 listed Paragon Banking were out this morning with the group delivering profits up 13.5% and the deposit book growing by more than 24%, outperforming the market. The cost-income ratio is falling, investors are receiving an interim dividend that’s 20% higher and the market has evidently willing to shrug off the modest increase in impairments. Share buybacks have been increased, with the note pointing out that more than £1bn has now been returned to shareholders since 2015. Shares traded almost 8% higher shortly after the open before giving back some of the gains but remain at post global financial crisis highs.
Headlines we expect on Thursday
Mitie Group Final Results
This time last year Revenues £4,055m, Operating profit £162m, Total dividend 2.9p
