Persimmon profits slide | Deliveroo orders shrink
The FTSE 100 gained 31.30 points, or 0.4%, to close at 7,618.60 after the latest US inflation reading showed consumer prices rose modestly last month, lifting expectations that the US Federal Reserve may pause its programme of interest rate rises.
Shares in the luxury retailer Burberry, which counts China as its single biggest market, moved 61p, or 2.8% higher to 2257p after Bejiing’s decision to lift Covid restrictions on tour groups travelling to dozens of countries pushed the company to the top of the blue-chip index.
It also boosted IHG, the hotel company behind the Holiday Inn and Crowne Plaza brands, which rose 110p to 6044p, while IAG, the owner of British Airways was 1.5p higher at 168.25p.
Persimmon said it is on course to hit profit expectations despite a difficult first half which saw a 65% slump in the first half as the housing sector grappled with subdued demand in the wake of rising mortgage rates.
Pre-tax profit came in at £151 million, against £439.7m previously. However, the housebuilder reinstated the interim dividend at 20p per share.
Chief executive Dean Finch said: “Against a backdrop of higher mortgage rates, the removal of Help to Buy and significant market uncertainty, Persimmon has delivered a robust sales rate excluding bulk sales whilst growing the private average selling price in our forward order book and also securing cost savings.”
“We are on track to deliver profit expectations for the year and are building a platform for future growth.”
New home completions in the six months to 30 June slid to 4,249 from 6,652 the year before while revenue of £1.19 billion was down from £1.69bn. It reiterated its home build target of 9,000 for this fiscal year.
Capital & Regional, which is structured as a stock market-listed real estate investment trust (REIT), has acquired the Gyle shopping centre in Edinburgh for £40m.
Deliveroo orders shrink
Food delivery firm Deliveroo has increased its full-year earnings expectations despite seeing order numbers shrink further as consumers continue to face cost-of-living pressures.
The company saw order numbers fall by 6% over the latest half year, but food price inflation boosted gross transaction value (GTV) per order, which jumped by a tenth to £24.20 from £22.10.
It expects its full-year adjusted earnings to be up to £80m and revealed it plans to serve up an extra £250m to shareholders.
Watches of Switzerland
Watches of Switzerland Group said demand for luxury watches continued to be “robust” and to exceed supply with average selling prices still increasing
Sales in the US grew by 10% at constant currencies, while in the UK and Europe sales were impacted by the unwind of the product intake that had benefitted the previous quarter. In the UK and Europe sales fell by 8%.
Guidance for the full 2024 financial year was for 8-11% constant currency growth on a pre-IFRS 16 basis to reach £1.6-1.7bn with earnings before interest and tax margins seen in line with FY 23.
“Looking ahead, we expect to return to more normalised growth rates in the balance of the financial year,” said the company’s CEO Brian Duffy.
“Our full year guidance for another year of strong growth remains unchanged.”
Property agent Savills was hit after pre-tax profits in the first half fell to £6 million with the board saying expectations for the year were “somewhat reduced”, driven by a slower recovery in mainland China and continental Europe. The shares fell to a three year low, shedding 106.5p to 885p.
Oil and gas services company Petrofac’s swung to a pre-tax loss of $160 million as its engineering and construction unit made an operating loss of $122 million. Investors were unimpressed as the shares slid 4p to 83½p.