11th Mar 2016 08:39
LONDON (Alliance News) - Stocks in London shot higher at the open Friday, as the dust settled on the European Central Bank's broad easing measures announced on Thursday, while Old Mutual shares were little changed after confirming plans to split up its business.
The Anglo-South African financial services company said there is "limited rationale" for its four main divisions to be part of the same group, confirming that it intends to separate them by the end of 2018 in a move to cut debt, costs and complexity.
Bruce Hemphill, a former executive at African lender Standard Bank Group, said the review he began when he succeeded Julian Roberts as Old Mutual's chief executive in November 2015 showed that there is "very little commonality" between the businesses.
The group's four divisions are comprised of its 54% stake in South African lender Nedbank, an emerging markets business also based in South Africa, a UK-focused wealth arm, and a US institutional asset manager. As Old Mutual manages their separation and sells assets, it will consider returning any excess capital generated to shareholders.
The company was amongst the biggest gainers in the FTSE 100 early Friday, but slipped shortly after to trade down 0.2%.
The blue-chip index itself was up 1.5%, or 91.22 points, at 6,127.92. Marks and Spencer Group was the only other decliner in the index, down 0.7%, after it was downgraded to Underperform from Neutral by Bank of America Merrill Lynch, according to traders.
The FTSE 100 was boosted as investors digested the ECB's stimulus package on Thursday, which included a cut to all three of its interest rates and an expansion to its asset purchase programme.
The FTSE 250 was up 0.9% to 16,539.19, and the AIM All-Share was up 0.3% to 699.85. In Europe, the French CAC 40 was up 2.4% and the German DAX 30 was 2.1%.
In Asia Friday, the Japanese Nikkei 225 index in Tokyo closed up 0.5%, the Shanghai Composite ended up 0.2% and the Hang Seng in Hong Kong rose 1.1%.
Computacenter was one of the worst performers in the FTSE 250, down 3.5% after the IT infrastructure firm said its pretax profit rose as a result of a one-off gain and lower restructuring costs in 2015, though revenue dipped amid continued challenges in France.
The company said pretax profit jumped 66% to GBP126.8 million for the year to the end of December from GBP76.4 million in 2014. The increase was driven by a one-off gain made from the sale of Computacenter's RD Trading recycling subsidiary and from lower restructuring costs related to a redundancy programme in France.
Revenue dipped to GBP3.06 billion from GBP3.11 billion, however, partially due to the weak euro. The group also faced continued sales weakness in France, where it has been exiting businesses and focusing on higher-margin revenue streams, though the country did perform ahead of Computacenter's expectations.
Just Retirement Group and Partnership Assurance Group said they remain confident of achieving at least GBP40.0 million of cost savings through the GBP1.6 billion merger of the life insurers.
The pair said they expect their merger to complete in April, with the aim of creating JRP Group PLC, as they separately reported earnings. The merger was driven by changes to the UK pensions landscape, which removed the effective requirement to buy individual guaranteed income annuity products.
Just Retirement said it swung to a first-half pretax profit of GBP26.1 million in the six months ended December 31, from a GBP9.2 million pretax loss in the corresponding period of 2014, as new business sales rose by 50% to GBP1.23 billion. Its first-half new business sales rose by 50% to GBP1.23 billion.
Swinging to a full-year pretax loss of GBP16.5 million in 2015, from a GBP24.1 million pretax profit in 2014, Partnership said it was hit by one-off costs, particularly the new Solvency II rules for insurers across the EU, and lower sales volumes.
Just after the open, Just Retirement traded up 3.8%, while Partnership was up 0.5%.
Shares in health, education and care services provider Cambian Group were down 13% after it issued a profit warning for 2015 and said it has agreed a temporary waiver on financial covenants with its lenders.
The company said it was now likely that, given an ongoing finalisation of costs and the completion of its audit for the year to the end of December, its results will be slightly weaker than previous guidance.
Due to this, the group will be in breach of financial covenants on its lending facilities and has agreed to a temporary waiver with its banks to allow time to continue talks on restructuring its financing arrangements.
Imagination Technologies Group was up 6.9% after N+1 Singer upgraded its rating on the chip designer to Buy from Hold. The broker said it is convinced of the quality of the group's intellectual property, which could attract potential bidders.
Still ahead in the economic calendar, the Bank of England's survey of consumer inflation expectations is released at 0930 GMT, at the same time as UK trade balances.
In the afternoon is the US import and export price index at 1230 GMT, the preliminary reading of the Reuters/Michigan Consumer Sentiment Index at 1400 GMT, and Baker Hughes' US oil rig count at 1700 GMT.
By Neil Thakrar; [email protected]; @NeilThakrar1
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