Burberry Group PLC (LSE:BRBY) sunk 5.6% to 1557p as it reported a 35% drop in sales to mainland China in the 13 weeks to 2 July due to restrictions and store closures designed to control Covid-19 outbreaks.
Although the British luxury fashion house grew its global turnover by 5% in the first quarter despite “significant disruption from lockdowns in mainland China.”
Burberry chief executive Jonathan Akeroyd commented: "Our focus categories, leather goods and outerwear, continued to perform well outside of mainland China and our programme of brand activations boosted customer engagement.
“While the current macroeconomic environment creates some near-term uncertainty, we are confident we can build on our platform for growth."
The designer brand is continuing to target high single-digit revenue growth and 20% margins in the medium term, it said in a trading statement.
It expects a £190mln revenue bonus and a £90mln addition to operating profits for the full year due to currency effects.
The retailer grew its Europe, the Middle East, India and Africa business by 47%, where it reported “an increase in spending” to above pre-pandemic levels.
Alex Smith, senior analyst for luxury goods at Third Bridge, said: “Burberry should remain resilient during a recession but it is more exposed than some other luxury brands.”
1.25pm: Fevertree Drinks (AIM:FEVR) sinks
Fevertree Drinks (AIM:FEVR) PLC shares crashed 24% lower to 910p after a profit warning cautioned over soaring costs that are eating into margins.
The mixer maker has stuck to its production guidance of £355mln to £365mln for 2022, but, downgraded its margin forecasts to 33% from 36%.
It told investors that the past eight weeks have seen a “rapid shift in operational and cost backdrop”.
Specifically, Fevertree said labour shortages impacted its production ramp-up in the United States and a shortage of glass has become severely restricted, whilst at the same time industry-wide cost pressures have increased.
11.31am: Ncondezi soars
Ncondezi Energy Ltd (AIM:NCCL, OTC:NCDZF) shares sparked 77% higher to 1.375p after it launched a feasibility study for a planned solar PV power plant of up to 300 megawatts (MW) with a battery storage system in Tete, Mozambique.
The study, which will be carried out by specialist technical consultants WSP Group (TSX:WSP) Africa, will require around four months to complete, examining three preferred sites located within the Ncondezi concession area.
A solar project would be "uniquely positioned to fast track first power to the grid as early as 2024," said the company, which it said would make sure of existing development work and be estimated to have a pre-money net present value of US$60-65mln and fully diluted cash flows of US$130-180mln over a 25-year period
9.30am: Fundraisings
Aston Martin Lagonda Global Holdings PLC (LSE:AML) shares vroomed 19% to 440p higher as it confirmed proposals for a £575mln rights issue and a £78mln strategic investment from Saudi Arabia's sovereign wealth fund.
New shares will be sold at 335p, almost a 10% discount to the last closing price.
The sportscar maker also provided a trading update, reporting strong demand trends and said trading had been in line with expectations, with sports cars fully sold out into 2023 and order intake for its DBX vehicle more than 40% higher year on year.
Elsewhere, a £20mln fundraising was also confirmed by ANGLE PLC (AIM:AGL, OTCQX:ANPCY).
With the new shares placed at a price of 80p, with the med-tech firm’s directors chipping in £130,000 through a management subscription, the share price fell 13% to 81.8p.
"We are pleased to have received support from both existing shareholders and new investors for this capital raise despite the challenging market conditions," said chief executive Andrew Newland.
“The new funds will be used to capitalise on the momentum gained following the ground-breaking FDA clearance of our Parsortix liquid biopsy system in May this year.
“The new funding will allow us to accelerate multiple pathways to commercialisation including clinical use of the system in breast cancer, our growing pharma services business and the establishment of new tests in ovarian and prostate cancer."