Investor appetite for UK shares remained pretty flat during Thursday’s session. The FTSE 100 and FTSE 250 have recorded marginal gains and falls respectively. And price action elsewhere isn’t much more spectacular either. Even the Allergy Therapeutics (LSE: AGY) share price has failed to spark despite the release of solid financials.
Allergy Therapeutics — which produces treatments for people with allergies and immunity disorders — said that operating profit was “strong” during the 12 months to April. And as a consequence it reckons that its bottom-line performance will be “well ahead of market expectations.”
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The UK healthcare share said that trading had remained strong despite challenging conditions, with sales helped by a favourable euro exchange rate too. As well, Allergy Therapeutics said that expenses for fiscal 2021 would be lower than predicted. This is due to some commercial projects being pushed back into this year and Covid-19 travel restrictions hitting conference attendances.
For the current financial year Allergic Therapeutics expects net sales “to grow at low single digit levels at constant rates”. The company said that it intends to improve the quality of its product portfolio “by streamlining a number of non-differentiated older products and maintaining focus on short course subcutaneous immunotherapy (SCIT) and innovative allergy treatments.” It predicted that the ongoing coronavirus crisis will impact sales this year too.
Finally the UK share advised that expenses “are expected to increase above the historic long-term trend and above current market expectations.” This is due to those commercial projects being delayed into financial 2022, while higher research and development activity will also hit operating margins.
A sinking UK share
The John Wood Group (LSE: WG) share price hasn’t fared nearly as well as that of Allergy Therapeutics on Thursday. Indeed, the oilfield services provider has slumped 9% during the course of Thursday business.
FTSE 250 firm Wood Group has now moved to its cheapest since last November. It has almost lost all gains printed during the past 12 months, too. The UK engineering share said that like-for-like revenues fell to $3.2bn in the first half. This represents a 21% annual fall and was caused by the ongoing Covid-19 crisis. As a consequence adjusted EBITDA is tipped to fall to between $255m and $265m, down around 12% on a like-for-like basis from the first six months of 2020.
In better news Wood Group said that it had witnessed improving activity momentum during the second quarter. It added that its Consulting and Operations divisions had both moved back into growth between April and June. These units are collectively responsible for 60% of group turnover.
These improved performances helped the group’s order book improve to $6.9bn as of the end of May. This was up around 6% from December levels.
Wood Group expects trading activity to remain lower year-on-year over the course of 2020. But it anticipates a “stronger” performance during the second half. The UK share expects to return to growth versus the first half of the year and the final six months of 2020.