14th Feb 2017 08:32
LONDON (Alliance News) - UK equities opened lower on Tuesday, with focus on UK inflation and US Federal Reserve Chair Janet Yellen's testimony before Congress.
Ahead of all that, Rolls-Royce Holdings was the worst performer in the FTSE 100, down 2.2%, after swinging to a massive pretax loss in 2016 but saying it sees "modest" improvements ahead in 2017 following a year of restructuring for the group.
The jet engine and turbine systems maker said it made a pretax loss of GBP4.64 billion in the year to the end of December, swung from a GBP160.0 million profit in 2015. The loss was driven by a GBP4.40 billion mark-to-market revaluation of derivatives, Rolls-Royce said, plus a one-off charge it booked from settling bribery allegations made against it.
Underlying pretax profit, stripping out any one-off effects, fell to GBP813.0 million from GBP1.43 billion the year before.
Rolls-Royce said its massive restructuring, a push to improve efficiency across the business and improve accountability, remains on track, with GBP60.0 million in annualised savings achieved in 2016. A further GBP80.0-100.0 million in savings are expected in 2017, leaving the company on track to meet its overall GBP200.0 million annualised savings run-rate by the end of 2017.
The FTSE 100 index was down 0.3%, or 22.71 points, at 7,256.21. The FTSE 250 was down 0.3% at 18,707.76, and the AIM All-Share was up 0.2% at 901.77.
The BATS UK 100 was down 0.5% at 12,278.46, the BATS 250 was down 0.3% at 17,008.27 and the BATS Small Companies was up 0.1% at 10,972.20.
The CAC 40 in Paris and the DAX 30 in Frankfurt were both down 0.1%.
In Asia, the Nikkei 225 index closed down 1.1%, and the Shanghai Composite and the Hang Seng in Hong Kong both closed flat.
In other UK corporate news, TUI AG shares were up 2.9%, the best performer in the FTSE 100. The Anglo-German travel operator said its net loss narrowed in the first quarter of its financial year, and it reiterated its underlying earnings guidance for the full year, while also announcing a deal to sell its Travelopia business.
TUI said it made a net loss of EUR81.6 million in the quarter to the end of December, compared to a EUR138.7 million loss a year before.
It made an underlying earnings before interest, tax and amortisation loss, adjusted for any one-off impacts, of EUR72.5 million, narrowed from EUR101.7 million the year prior. The loss was narrowed as the group continued to deliver synergies from the merger of TUI's London-listed unit with its German parent.
Acacia Mining said it reversed the losses seen in 2015 and generated a significant amount of earnings in 2016 following a strong operational performance and more favourable economics.
Acacia reported net earnings of USD94.9 million in 2016, turning from the USD197.1 million loss reported in 2015. After being adjusted for exceptional items, net earnings rose year-on-year to USD161 million from USD6.8 million.
Acacia said it will pay a full-year dividend of 10.4 cents per share, way ahead of the 4.2 cent payout in 2015. The miner was the best performer in the FTSE 250, up 6.8%.
Precision instrumentation and controls supplier Spectris said its pretax profit slumped in 2016 due to an impairment charge booked by the group, though its underlying performance was robust.
Spectris - which makes materials analysis and testing and measurement systems used by industrial and manufacturing industry customers - said it made a reported pretax profit of GBP31.9 million for 2016, down 77% from the GBP141.6 million it made the year before.
The lower reported profit was due to a GBP115.0 million goodwill writedown booked by the group on its Omega Engineering and ESG Solutions unit in the year.
Adjusted pretax profit, stripping out any one-offs and presented in constant currencies, rose 11% year-on-year to GBP195.8 million from GBP176.3 million the year before. The stock was up 3.1%.
In the economic calendar, UK inflation figures are due at 0930 GMT. Economists expect the UK consumer price index to show annual growth of 1.9%, accelerating from the 1.6% seen in December. The monthly CPI reading, however, is expected to show a decline of 0.5%.
Elsewhere in the economic calendar, eurozone GDP and industrial production are at 1000 GMT, as are ZEW economic surveys for the eurozone and Germany, and the US producer price index is at 1330 GMT. Fed Chair Yellen will make her semi-annual testimony before Congress at 1500 GMT.
By Neil Thakrar; [email protected]; @NeilThakrar1
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