Thursday, June 28: European indices were once again pushed into the red this morning as trade tensions and political concerns were triggered ahead of a European Union summit on Brexit. The event will see PM Theresa May brief other EU leaders for the last time before October, with both sides hoping that a deal will be done on the UK’s March 2019 departure. The FTSE 100(-0.08%) was narrowly lower as a raft of industrial, mining and finance stocks weighed.
Greene King(-8.47%) fell intraday despite announcing a pre-tax profit increase of 6.8% to £197.5m for FY2018 and a successful World Cup trading period thus far. The profit increase was attributed to cost savings with LFL pub sales recorded at +2.2% for FY2019. LFL FY2018 revenues came in 1.2% lower, excluding the impact of snow in early 2018. The British pub chain guided on growth in comparable sales at its company pubs, £30-35m in cost savings alongside cost inflation of £45-50m as trading is expected to remain challenging.
Stagecoach(-1.50%) proved to be volatile intraday after announcing a five-fold increase in operating profit, despite reducing its dividend payout to a “sustainable” level. The transport group declared a pretax profit of £93.5m for FY2018, despite a fall in revenue for the same period due to the company’s loss of its South West Trains franchise. The Board proposed a final dividend of 3.9p per share which brings the full-year dividend to 11.9p per share. The Group will reduce the dividend payout to 7.70p per share, which should be covered by non-rail cash flows moving forward. Management issued guidance indicating it expects fiscal 2019 operating profit to decline in its U.K rail division, with anticipated profit from the East Midlands Trains franchise being partly offset by the costs of bidding for new opportunities. The stock sold off almost 7% on the news before coming back to almost parity before the close.
Across Europe, indices were lower at the close with the FTSE 100 -0.08%, the DAX 30 -1.39% and the CAC 40 -0.97%.