Sterling Could Benefit if UK-EU Relations Improve -2-

1027 GMT - Direct Line Insurance shares drop 28% after the FTSE 250-listed firm reported a hit from higher motor and home-insurance claims due to bad weather and scrapped its full-year dividend. While not paying a dividend is one way to save cash, thousands of pensioners owning the stock for income won't be happy, AJ Bell says. "Questions will be asked about the strength of the company's balance sheet and whether it has enough capital," Bell's investment director Russ Mould writes. "The company says its capital coverage is now at the lower end of its risk appetite, so might we see a big fundraise soon?" Other insurers drop following the news, with Admiral and Aviva down 8% and 4% respectively. ([e-mail])

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Topps Tiles' FY 2023 Started Well But Uncertainties Prompt Caution

1025 GMT - Topps Tiles' start of fiscal 2023 looks encouraging given the robust 1Q trading, which set a positive tone for the year ahead, Liberum analysts Adam Tomlinson and Wayne Brown say in a note. The tiles retailer's 10% sales increase reflects its leading market position and robust underlying market activity, they say. However, consumer demand and cost pressures are likely to remain in 1H, the analysts say, adding they will therefore keep their "prudently set forecasts" for fiscal 2023-25 unchanged for now. Liberum has a buy rating on the stock and a target price of 100 pence. ([e-mail])

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Barratt Developments Forecasts Face Uncertainty

1024 GMT - U.K. house-building shares react mixed after Barratt Developments reported lower first-half sales rates and forward orders amid "a marked slowdown" in the U.K. housing market. The half-year update showed demand continued to deteriorate into the end of 2022, leaving current forecasts facing significant uncertainty, brokerage Davy says. "Without a meaningful rebound in sales, FY volume estimates would need to [fall] by 7%," Davy analyst Colin Sheridan writes. Barratt shares drop 1% and rivals Persimmon and Vistry also fall, though Taylor Wimpey, Berkeley Group, Bellway and Redrow gain. ([e-mail])

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JD Sports Fashion Investor Day in the Spotlight After Bumper Festive Trading

1020 GMT - JD Sports Fashion's bumper festive trading is a testament to the continuing appeal of brands names, AJ Bell investment director Russ Mould says in a note after the company posted its highest-ever weekly sales in the run-up to Christmas. The sports-and-fashion retailer is a story of the survival of the fittest as it benefits from improved product availability and easing shipping costs, he says. "All eyes will now be on a big investor day at the beginning of February, when JD will be expected to update on its digital strategy and what it intends to do with its increasingly large pile of cash," Mould says. Shares trade up 7.0% at 150.80 pence. ([e-mail])

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Direct Line Has Gone From Bad To Worse, Jefferies Says

1016 GMT - Direct Line Insurance Group's dividend scrapping after management's reassurances of a payout comes as a major shock to markets, says Jefferies in a note. "Despite starting the year with a buyback which was eventually cancelled, things have since gone from bad to worse, with the company no longer expecting to pay a final dividend for 2022." Jefferies rates the stock hold. Shares in the non-life insurer fell as much as 30%, to a low of 162.02 pence, marking their lowest level since its IPO in October 2012. ([e-mail])

Contact: London NewsPlus; [e-mail]

(END) Dow Jones Newswires

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