Shares round-up: UK jobs data, FTSE 100, ASOS, SSE

Stock markets are down Thursday, but the selling is modest and there’s lots to interest investors. 

Some 650,000 fewer people in paid employment than before the lockdown today provided investors with a stark reminder about the fragility of the UK's recovery prospects.

The data on company payrolls came as the Office for National Statistics (ONS) said the overall jobless rate held firm at 3.9% in the three months to May, thanks to the government-backed furlough scheme.

But with big employers including Rolls-Royce (LSE:RR.), Centrica (LSE:CNA) and John Lewis (LSE:JLH) among those in recent weeks to announce plans to cut headcounts, there are fears that this rate could go above 10% once the furlough scheme comes to an end in October.

Much will now depend on how the public responds to Chancellor Rishi Sunak's various initiatives, including his Eat Out to Help Out voucher scheme next month. The stamp duty threshold has also been raised to £500,000 to encourage activity in the housing market.

Young people, who account for the bulk of the jobs in hospitality industry, are particularly vulnerable. The ONS said the number of people unemployed aged 16 to 24 years increased by 47,000 on the year, whereas other age groups remained steady.

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ASOS (LSE:ASC) made this point yesterday when it cited the uncertain economic outlook for its 20-something customers as one of the main reasons why it remains cautious about prospects despite recent strong sales growth. Shares fell by almost 2% to 3,421p today.

This uncertainty was felt in the wider London market, with the FTSE 100 and FTSE 250 both down by 0.5% after their strong performances earlier in the week. Recruitment firm Hays (LSE:HAS) was among the fallers after its fourth quarter update showed a 34% fall in net fees, with the UK and Ireland 42% lower.

It said that while current activity levels have improved, there were no signs yet of positive fee momentum. Shares fell 3% to 122.9p, even though analysts at Jefferies said the profit impact from Covid-19 looked to be less acute than feared.

Burberry (LSE:BRBY) shares remained under pressure following yesterday's 45% fall in quarterly sales, with European rival Richemont (SIX:CFR) disclosing today its revenues had almost halved.

Burberry dipped another 4% to 1,416p, making it the biggest faller behind GVC Holdings (LSE:GVC), whose shares tumbled 5% after its deal-making chief executive Kenny Alexander announced his surprise decision to leave the Ladbrokes Coral owner.

Other big fallers were mining giant Anglo American (LSE:AAL) after it revealed an 18% drop in second quarter production. It was operating at 60% of capacity in April, but with this rate recovering to 90% by the end of June Anglo stuck to its full-year guidance for all products apart from coal.

Shares were 27p lower at 1,926p, while BHP (LSE:BHP) was down 11.4p at 1,749p and Glencore (LSE:GLEN) dipped 0.8p to 181.9p.

SSE (LSE:SSE) saw the biggest rise of the blue-chip session after the renewable energy giant reassured investors that its prized dividend was secure. It went as far as to reveal that it would declare a 24.4p interim dividend in November for payment next March. This is despite the impact of Covid-19, which has caused a drop in electricity demand and likely rise in bad debts.

The company said:

“SSE's dividend provides income for people's pensions and savings and is particularly vital given the economic consequences of the coronavirus pandemic.”

SSE shares rose 28p to 1,391.5p, beating another popular income stock to the top of the risers board after a further improvement in sentiment towards safety equipment conglomerate Halma following its profits warning earlier this week.

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The session also highlighted some of the companies whose fortunes have been enhanced by the lockdown. They include AIM-listed remote meetings specialist LoopUp (LSE:LOOP), with its latest upgrade to full-year forecasts helping shares to jump another 9% to 179p.

Revenues increased by 43% to £31.9 million in the first six months, driven by the large-scale migration towards working from home associated with Covid-19. Its shares had been trading at below 40p prior to the March lockdown.

There was also momentum from games developer and publisher Team17 (LSE:TM17), whose shares rose 8% to 612p after announcing a new publishing agreement with China's Tencent Games.

The company's shares have now risen by around 50% in the year-to-date, partly due to the increased demand from homebound gamers during the lockdown.
Augmentum Fintech (LSE:AUGM), which is the UK’s only publicly listed investment company focusing on the fintech sector in the UK and wider Europe, also reported favourable trends in its annual results.

CEO Tim Levene explained: “Covid-19 has fundamentally changed behaviours. This has accelerated the digitisation of financial services and has created significant opportunity for further disruption.

“Fintech per se finds itself at the centre of this change and we expect to capitalise on a once in a generation transformation in digital adoption.”

The company, whose portfolio companies include interactive investor, peer-to-peer lender Zopa and equity crowdfunding platform Seedrs, increased net asset value per share by 5.9% to 116.1p in the year to March 31. Shares rose a penny to 105p.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.