FTSE Index is trading around 0.5% higher today in a busy trading session so far. Asos (LON: ASC) stock price tumbled after the company reported slightly lower margins, while shares of Kainos (LON: KNOS) and Synthomer (LON: SYNT) are both 30% up profit expectations.
Asos reports lower margins
Asos stock price fell 8% today after the online retailer saw its gross margin plunge to 47.4% from 48.8% in 2019. Other than that, Asos reported mostly positive data as revenue rose 19% to £3.2 billion, while profit before tax jumped 329% to £142 million.
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Unlike in 2019 when it finished its fiscal year £90 million in the red, Asos reported positive cash balance of £125 million. This is despite significant investments in IT-related services.
“After a record first half which saw us make progress in addressing the performance issues of the previous financial year, the second half will always be defined by our response to Covid-19,” said Nick Beighton, chief executive of Asos.
Shares of Asos are now trading at 5000p, or 7.03% in the red.
Kainos stock price explodes on strong demand
The provider of IT services, Kainos, witnessed its share price exploding 30% this morning after the company noted it expects full-year results to be “significantly ahead” of previous forecasts.
This is because Kainos observed strong demand for its services and products since the beginning of the year.
“Looking forward, we remain confident in our outlook for the financial year, which is underpinned by a robust pipeline and a significant contracted backlog. Notwithstanding we are mindful of the potential medium-term impacts of further lockdown measures and the broader economic disruption caused by Covid-19,” said Kainos in a statement.
KNOS currently trades at 1298p, or 27.25% up on the day.
Synthomer upgrades annual guidance
Synthomer, a manufacturer of chemical products, upgraded its annual earnings guidance and reinstated its dividend. It now expects EBITDA for the year ending December to arrive at around £232 million, or some 10% higher than previous forecasts.
“This is a very encouraging performance with all business divisions performing ahead of prior year. Alongside this strong momentum, we have made significant strategic progress, with a decision to close our site in Oulu and the integration of Omnova continuing ahead of our initial expectations,” chief executive Calum MacLean said.
As the pandemic yielded higher interest in Synthomer latex products, the firm has reinstated the interim dividend. It will now pay 3p per share on 10 November.
“The board has also fully reinstated its existing dividend policy and intends to pay a final dividend in line with its capital policy,” the company said in the statement.
SYNT price soared around 30% to a 2-year high before giving up some gains to now trade at 390.6p, or 17.3% up on the day.
Summary
Asos, Synthomer and Kainos all issued positive trading updates this morning. However, Asos share price plunged as gross margins slightly decreased compared to last year, sending its shared 8% lower.
