26th Nov 2015 08:42
LONDON (Alliance News) - Stocks in London opened slightly higher on Thursday, with Severn Trent benefiting from a positive update and PayPoint taking a hit after reporting a dramatic drop in pretax profit, in a day with few significant economic data releases in sight and the New York market closed for the Thanksgiving Day holiday.
The FTSE 100 index opened up 0.4% at 6,363.08 points, the FTSE 250 was up 0.2% at 17,138.17 and the AIM All-Share was up 0.1% at 730.92.
Severn Trent was up 1.6% after saying its pretax profit rose in the first half and said it has had a good start to its current year, underpinning expectations it will outperform its targets.
The FTSE 100-listed company said its pretax profit for the financial half year to the end of September was GBP186.2 million, compared to GBP137.1 million a year earlier, due to lower financing costs and a cut to operating costs. Revenue for the first half was broadly flat at GBP896.1 million, compared to GBP898.3 million a year earlier, and the group said it has made progress on the majority of its operational metrics.
Severn Trent will pay an interim dividend of 32.26 pence per share, slightly down from the 33.96p it paid a year earlier.
At the other end of the FTSE 100, fellow utility National Grid was leading blue-chip fallers, down 1.7%, as it went ex-dividend, meaning new buyers no longer qualify for its latest dividend payout.
Tesco was up 1.1%. The retailer said it has reached an agreement to settle a class action commenced in New York on behalf of the holders of the company's American Depositary Receipts. The class action was against Tesco and some of its former directors for alleged breaches of US federal securities laws in connection with its overstatement of commercial income in September 2014.
The settlement agreement means Tesco will have to pay USD12 million to settle the class action with no admission of liability and, if confirmed by a federal court in New York, will settle one of two claims before US courts arising from the scandal.
Tesco peers Wm Morrison Supermarkets and J Sainbury were up 1.1% and 1.0%, respectively.
In the FTSE 250, Paypoint shares plunged 11%. The company, which offers in-store payment services, reported a considerable drop in first-half pretax profit, as the company booked a GBP18.2 million goodwill impairment charge in relation to the online payments business it is seeking to sell.
Pretax profit plunged to GBP3.2 million in the six months ended September 30, compared with GBP22.5 million in the corresponding half the prior year. Revenue fell to GBP102.8 million from GBP104.3 million, while administrative expenses rose to GBP29.3 million from GBP27.8 million.
OneSavings Bank was the best mid-cap performer, up 3.7%, after being upgraded to Buy from Hold by Investec. The stock had lost 7.3% on Wednesday after UK Chancellor George Osborne announced a new stamp duty on buy-to-let properties, against which OneSavings Bank lends. Another lender that suffered on Wednesday, Aldermore, was down 1.0% early Thursday after being cut to Hold from Buy by Deutsche Bank. Aldermore shares had lost 5.4% on Wednesday.
Pub company and brewer Marston's was another mid-cap gainer, up 2.9% after it said it swung to a profit in its recently-ended financial year as revenue grew amid new pub openings and the recently-integrated Thwaites beer business, part of a three-year transformation plan.
Marston's said it made a pretax profit of GBP31.3 million in the year ended October 3, after suffering a GBP59.2 million pretax loss the year before, as revenue rose to GBP878.6 million from GBP815.3 million. It will pay a final dividend of 4.5 pence, making a total dividend of 7.0p, up 4.5% on the prior year.
In Europe, the French CAC 40 index opened up 0.1%, while the German DAX 30 was up 0.3%. European indices received a boost on Wednesday from a media report that the European Central Bank is mulling the implementation of a two-tier charge on banks parking their cash with the ECB and the widening of its bond-buying program.
The ECB officials considered various options, including the buying of bonds of towns and regions, as well as charging a two-tier penalty on banks amassing money with the ECB, Reuters reported on Wednesday. They even discussed in preparatory meetings the purchase of rebundled loans at risk of non-payment, although such a measure looks unlikely for the time being, Reuters added.
The Japanese Nikkei 225 index closed up 0.5%, while in China, the Shanghai Composite ended down 0.3% and the Hang Seng index in Hong Kong finished flat.
The New York market will be closed due to Thanksgiving holiday after closing flat to higher on Wednesday, with the Dow Industrials and the S&P 500 flat and the Nasdaq Composite up 0.2%.
In a light economic calendar Thursday, the UK Financial Stability Report is due at 0930 GMT, while Germany's Gfk consumer confidence survey is expected at 1200 GMT.
By Daniel Ruiz; [email protected]
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TescoNational GridALD.LPaypointOneSavings BankMRW.LSainsbury'sSevern TrentMarstons