FTSE 100 movers: WPP gets cold shoulder, Burberry swaggers in the snow
London's blue chip benchmark was getting a cold shoulder on Thursday as the snow continued to fall and investors gave results from WPP and Rentokil an icy reception.
WPP blamed squeezed client marketing budgets for flatlining annual revenue as the world’s biggest advertising company said it made a slow start to 2018 and said advertisers remained under pressure from investors to cut costs. Pre-tax profit, excluding gains and losses on disposals and other items, rose 5.4% to £2.09bn in the year to the end of December – matching analysts’ an average forecast reduced by a string of sales warnings. Excluding currency swings, profit rose 1.9%.
Rentokil reported adjusted profit before tax of £287m that beat a consensus forecast of £285m, but with organic growth slightly lower in the fourth quarter at around 3.1% versus 3.7% the preceding quarter, investors cold cold feet due to the stock's high rating. Analysts at RBC Capital Markets said "underlying momentum looks fine, the outlook is positive and the acquisition pipeline is strong", with management targeting £200-250m spend in 2018, free cash flow good and the dividend raised 15%.
Miners were down again, as the strong dollar weighed on metals prices. Rio Tinto and Fresnillo were the biggest fallers in the FTSE 100's commodities heavyweights.
ITV was hit by a downgrade from Barclays, which felt this week's results did not offer many positives. Analysts at the bank moved to an 'equal weight' rating and lowered their price target to 180p from 200p, saying the numbers for 2017 were "only in line, unlike previous years" and lamenting the end of its previous special dividend.
Not feeling the cold and lead the risers was Russian steelmaker Evraz, which gained on the back of full-year profits up 70% to $2.6bn on the back of higher prices. Revenues were up 40.4% to $10.8bn driven partially by higher volumes but mostly by an upswing in prices for steel and coal products amid more favourable market trends, while cost-cutting helped lift EBITDA.
Burberry donned its checked scarf several pairs of leather gloves to strut higher after investors liked the cut of its new chief creative officer's jib. The fashion house has appointed Riccardo Tisci, who, under Burberry's CEO Marco Gobetti helped turn around the fortunes at Givenchy.
Irish building materials group CRH was winched higher as it reported an acceleration in profits growth towards the end of the year and saw good potential for more in the US and Europe in 2018.
Market Movers
FTSE 100 (UKX) 7,180.28 -0.71%
FTSE 250 (MCX) 19,537.96 -0.76%
techMARK (TASX) 3,317.70 -0.00%
FTSE 100 - Risers
Evraz (EVR) 452.50p 5.95%
Burberry Group (BRBY) 1,592.00p 3.81%
CRH (CRH) 2,473.00p 2.96%
Admiral Group (ADM) 1,890.50p 2.58%
Shire Plc (SHP) 3,170.50p 1.98%
International Consolidated Airlines Group SA (CDI) (IAG) 626.01p 1.86%
United Utilities Group (UU.) 672.20p 0.90%
Taylor Wimpey (TW.) 187.60p 0.86%
Severn Trent (SVT) 1,720.00p 0.73%
Smith & Nephew (SN.) 1,275.00p 0.51%
FTSE 100 - Fallers
WPP (WPP) 1,214.50p -12.88%
Rentokil Initial (RTO) 266.40p -8.01%
Rio Tinto (RIO) 3,796.00p -3.31%
Fresnillo (FRES) 1,182.25p -3.05%
ITV (ITV) 155.20p -3.00%
Mondi (MNDI) 1,851.50p -2.66%
Kingfisher (KGF) 349.20p -2.43%
Ashtead Group (AHT) 2,064.00p -2.37%
Micro Focus International (MCRO) 2,015.00p -2.33%
Sage Group (SGE) 676.60p -2.31%