19th Apr 2016 07:39
LONDON (Alliance News) - Stocks in the UK started Tuesday higher, buoyed by the resumed upward march in oil prices, while Associated British Foods' interim results were well received, as it reported growth in profit.
AB Foods, which owns discount fashion retailer Primark, as well as British Sugar, along with agriculture and consumer goods businesses, said its pretax profit in the 24 weeks ended February 27 grew to GBP457 million from GBP213 million in the same period the year before, as it didn't book any exceptional hits in the period. The prior year period suffered from GBP98 million in exceptional items and GBP116 million in losses on the closure of businesses.
Revenue, however, retreated by 2% to GBP6.12 billion from GBP6.25 billion, although this would have grown by 2% on a constant currency basis, AB Foods said.
AB Foods traded up 1.2%, making it one of the best performers in the FTSE 100.
The blue-chip index itself was up 0.5%, or 29.83 points, to 6,383.35. The mid-cap FTSE 250 was up 0.4% at 16,955.95 and the AIM All-Share was up 0.3% at 735.65.
Stocks in London were benefiting from firm oil prices which managed to hold onto gains they made on Monday. After the open on Tuesday, Brent oil traded at USD43.73 a barrel, having been at USD43.18 a barrel just after the London equities close on Monday.
Investors continue to mull over the impact of the failed production freeze agreement in Doha on Sunday, counterbalanced by an oil workers strike that is disrupting production in Kuwait.
European stocks also were performing well, with the CAC 40 in Paris up 0.% and the DAX 30 in Frankfurt up 0.4%.
In Asia Tuesday, the Nikkei 225 in Japan closed up 3.7%, fully recovering from its 3.4% loss on Monday following the earthquake that hit the island of Kyushu. In China, the Shanghai Composite ended up 0.3%, while the Hang Seng in Hong Kong is trading up 0.7%.
Aerospace and defence components company Meggitt said trading in the first quarter met its expectations, with solid performance in its civil aerospace and defence arms offset by weakness in its energy unit.
The company said group revenue grew 1.0% in the quarter to the end of March on an organic basis, which strips out the effect of acquisitions and currency movements.
Civil aerospace organic revenue grew 6.0%, helped by 7.0% growth in aftermarket sales, while military revenue increased 1.0%. Energy revenue, however, declined 15% amid the ongoing pressures on the oil and gas industry.
Meggitt was one of the best performers in the FTSE 250, up 4.3%.
Ashmore Group traded up 2.0%. The emerging markets money manager ended the third quarter of its financial year with more assets under management than at the start, as positive investment performance more than offset net outflows of client money.
Investment performance added USD3.0 billion, while net outflows took away USD1.1 billion, Ashmore said, meaning assets under management rose to USD51.3 billion from USD49.4 billion during the three months ended March 31.
Following a volatile start to 2016, hit by fears about China's slowdown and global economic growth prospects, markets rallied towards the end of the three months. Investment performance was "particularly" strong in local currency in the quarter, as emerging market currencies strengthened against the dollar, Ashmore said.
McCarthy & Stone said it saw strong growth in the first half of its financial year, selling more houses at higher average prices, though profit was hit slightly by costs from its initial public offering in November.
The retirement housebuilder reported GBP250.2 million in revenue for the six months ended February 29, 33% higher than the GBP188.5 million for the same period a year earlier, as legal completions grew by 19% and its average selling price rose 12%.
McCarthy & Stone said it made 923 legal completions for the first half of the current financial year, up from 776 a year earlier, whilst the average selling price was GBP253,000, from GBP226,000 a year earlier.
The company declared an interim dividend of 1.0 pence per share, in its first interim results since floating.
Despite this growth, pretax profit came in flat at GBP29.0 million, from GBP29.1 million a year earlier, largely due to increased administration costs coming from its initial public offering in November. The stock traded down 0.9%.
Still ahead in the economic calendar, eurozone current account balance is revealed at 0900 BST, ZEW economic sentiment surveys for Germany and the eurozone are published at 1000 BST, at the same time as eurozone construction output.
Later in the day, US housing starts and building permits are at 1330 BST, before Bank of England Governor Mark Carney speaks before the Lords Economic Affairs Committee at 1530 BST.
By Neil Thakrar; [email protected]; @NeilThakrar1
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