Shares round-up: Shell, Redrow, InterContinental Hotels, Cineworld

It looks like June will end little changed after a poor show from these significant movers at month-end.

Companies adjusting to the “new normal” after the pandemic ensured the London market ended one of its best quarters since the financial crisis on a subdued note today.

Royal Dutch Shell (LSE:RDSB) was the biggest drag on the FTSE 100 index after it said it would write down the value of its assets by up to $22 billion, while Redrow (LSE:RDW) led the FTSE 250 index fallers board after disclosing a shift in strategy to reflect home buyers focusing more on outdoor living.

The immediate fall-out from the pandemic also continues to be seen, with InterContinental Hotels (LSE:IHG) reporting a 70% drop in revenues per available room in June and Cineworld (LSE:CINE) having to put back the re-opening of its UK and US estate due to delays in film release schedules.

Among smaller companies, On The Beach (LSE:OTB) shares were 4% lower after highlighting the impact of this summer's holiday shutdown in half-year results. 

Despite today's sell-off - housebuilders and heavyweights Royal Dutch Shell and BP (LSE:BP) were all 2% lower — the FTSE 100 index is still 10% higher than at the end of a turbulent first quarter.

There were also some pockets of good news, particularly from technology group Smiths (LSE:SMIN) after its shares surged 7% in a session when the top-flight was 0.5% lower at 6,196.8.

The company, which is best known for its medical devices and airport security scanners, said sales had been resilient over the first four months of its financial year. A restructuring should also keep Smiths on track for operating margins between 18% and 20%.

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The next biggest rise came from Standard Life Aberdeen (LSE:SLA) after the asset manager named its successor to Keith Skeoch as chief executive. Stephen Bird most recently served as CEO of Citigroup's global consumer banking division, a role he held between 2015 and last November.

SLA chairman Sir Douglas Flint said:

“He is an inspiring leader with a great track record and experience in leading businesses to harness digital technology to improve both productivity and the client and customer experience.”

Investors appeared to like the appointment, particularly with Sir Douglas referencing Bird's record of managing businesses through periods of major change. Shares were up 4% to 276.3p. Other risers included grocer-turned technology stock Ocado (LSE:OCDO), having already jumped by 66% in the quarter just about to end.

Holiday Inn and Crowne Plaza chain InterContinental Hotels faded 1% to 3,600p after disclosing a 75% decline in its second quarter revenues per room, despite small but steady improvements over the past month as its US-based estate begins to see more domestic travel.

Occupancy levels in the US have improved to around 40%, with only 10% of its global estate now still closed. The fall in the share price comes a week after Peel Hunt initiated coverage with a 5,000p price target and said InterContinental was likely to recover faster than upmarket rivals.

In the FTSE 250 index, Cineworld (LSE:CINE) shares were up 4% despite revealing that the long-awaited re-opening of its cinemas in the UK and US will happen on 31 July rather than 10 July. The move comes after Warner Bros said it was delaying the release of spy thriller Tenet until 12 August.

The shift in strategy from Redrow will see the company scale back its operation in London to reflect the desire of home movers' to live closer to green spaces as their priorities change in the wake of Covid-19. Meeting these trends, including the desire for better home workspace, will mean Redrow focuses more on its regional operations and award-winning Heritage product.

The impact of Covid-19 and the cost of scaling back in London will mean profits for the year to June will be substantially below last year. The group completed 4,032 homes in the year for turnover of £1.3 billion, compared with 6,443 homes and £2.1 billion the previous year.

Trading has been encouraging since lockdown restrictions eased, with pent-up demand helping Redrow start the new financial year with a record order book worth £1.42 billion.

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Shares in Balfour Beatty (LSE:BBY), meanwhile, continue to trade near levels seen prior to the market sell-off. The stock rose another 2% to 262.6p after the infrastructure group said its Gammon Construction joint venture had secured a contract worth £577 million for highways work in Hong Kong, including the construction of tunnel ventilation and administration buildings.

The fall for On The Beach shares came despite reporting a recent surge in demand for summer trips as the UK government looks to introduce air bridges to European countries. Booking volumes for summer 2021 remain low, but are significantly ahead of this year, partly due to the early release of flights for by most major airlines.

Half-year profits were sharply lower, although the company said actions taken since mid-March left it well placed to capitalise on the “inevitable structural changes” in the market in the wake of Covid-19. Shares were later 2% lower at 295.5p, having stood at 487p at the end of 2019.