LONDON-Market Open Report

London open: Positive start to busy day

Investors have a batch of results to consider this morning, with BT currently leading London’s blue chips higher after publishing quarterly figures.

Telecoms giant BT saw adjusted EBITDA fall 3% in the first quarter, held back by BT Global Services. It saw adjusted EBITDA come in at Ł1.3bn against Ł1.4bn in the same period last year. But lower finance income and higher finance expenses pushed first quarter profits, on a reported basis, down 45% to Ł272m.

Royal Dutch Shell said its second quarter results were affected by the weak global economy as net profit slumped 70%. Second quarter earnings, on a current cost of supplies (CCS) basis, came in at $2.3bn, which was in line with expectations, against $7.9bn a year earlier. In the six month period, CCS earnings fell 64% to Ł5.6bn.

Specialist publisher Reed Elsevier is the worst performer after announcing plans to raise about 10% of its capital through a placing to pay off debts after an acquisition. Reed acquired the operator of the Lexis Nexis news archive system ChoicePoint for $4.1bn and had intended to pay for this with the sale of its business information division, but shelved the plans because of the economic environment.

Broadcaster and broadband provider BSkyB posted a sharp rise in profits in the year to June 30 as householders continued splashing out on home entertainment amid tough economic conditions. The firm posted a profit before tax of Ł456m, compared with Ł60m over the previous year as revenues rose to Ł5.35bn from Ł4.95bn.

Aero engine company Rolls-Royce reiterated its guidance for the full year but said the global trading environment remains ‘very difficult’, adding that the recovery is likely to be slow. Underlying pre-tax profits, which excludes the non-cash impact of the hedge book and other financial instruments, rose 9% to Ł445m in the six month ended 30 June.

Its fellow aerospace and defence stock BAE Systems has swung to a half-year loss, but upped its dividend and said it expects good growth for the full year. The defence firm made a loss of Ł70m in the six month ended 30 June compared with a profit of Ł599m last time.

Miner Kazakhmys said given the progress made in reducing stockpiles, output is likely to be lower in the second half but it remains on track to meet our full year target.

Knee and hip joint supplier Smith & Nephew posted a rise in second quarter profits but expects its products which serve the younger more active patient segment to face greater challenges.

Aero engine company Rolls-Royce reiterated its guidance for the full year but said the global trading environment remains ‘very difficult’, adding that the recovery is likely to be slow. Underlying pre-tax profits, which excludes the non-cash impact of the hedge book and other financial instruments, rose 9% to Ł445m in the six month ended 30 June.

Tobacco firm British American hiked its dividend by a quarter as acquisitions continued to drive the firm’s profits higher.

National Express, which last week received a takeover approach from its main shareholder, has scrapped its interim dividend in a bid to reduce debt.

Water firm Pennon Group said it has been performing in line with management expectations and intends to offer Ł120m of senior unsecured convertible bonds.

Rail and bus group Go-Ahead has agreed to acquire the assets of East Thames Buses from Transport for London (TfL)for Ł5m.

Model trains and racing cars group Hornby said its businesses in the UK, mainland Europe and the USA have continued to experience good demand.


FTSE 100 - Risers
BT Group (BT.A) 121.25p +7.59%
Wolseley (WOS) 1,234.00p +3.70%
Lonmin (LMI) 1,300.00p +3.59%
Randgold Resources (RRS) 3,750.00p +3.31%
Smith & Nephew (SN.) 488.75p +2.89%
Rio Tinto (RIO) 2,354.00p +2.53%
BHP Billiton (BLT) 1,534.00p +2.16%
Rolls-Royce Group (RR.) 383.25p +2.13%
Antofagasta (ANTO) 723.50p +2.12%
Friends Provident Group (FP.) 72.60p +2.11%

FTSE 100 - Fallers
Reed Elsevier (REL) 414.50p -13.69%
BAE Systems (BA.) 319.25p -2.67%
Carnival (CCL) 1,671.00p -1.07%
ICAP (IAP) 442.25p -1.01%
WPP Group (WPP) 445.25p -1.00%
Pennon Group (PNN) 463.50p -0.96%
Intertek Group (ITRK) 1,030.00p -0.87%
Centrica (CNA) 229.00p -0.87%
TUI Travel (TT.) 220.75p -0.67%
Compass Group (CPG) 315.75p -0.63%

FTSE 250 - Risers
Travis Perkins (TPK) 760.50p +8.64%
SIG (SHI) 118.50p +5.80%
Punch Taverns (PUB) 97.00p +5.15%
Yell Group (YELL) 31.00p +4.20%
DS Smith (SMDS) 75.50p +4.14%
Charter International (CHTR) 520.00p +3.79%
easyJet (EZJ) 298.25p +3.56%
Edinburgh UK Tracker Trust (EUK) 206.50p +3.51%
Halma (HLMA) 192.75p +3.49%
Galiform (GFRM) 53.25p +3.40%

FTSE 250 - Fallers
St James's Place (STJ) 175.00p -2.78%
Computacenter (CCC) 212.25p -2.64%
BlueBay Asset Management (BBAY) 238.00p -2.46%
JD Wetherspoon (JDW) 440.50p -2.38%
Stagecoach Group (SGC) 128.75p -1.90%
Rank Group (RNK) 66.50p -1.85%
Carpetright (CPR) 622.00p -1.58%
Renishaw (RSW) 375.00p -1.32%
United Business Media (UBM) 381.00p -1.30%
Croda International (CRDA) 552.00p -1.25%