UK shares make early gains in trading on Tuesday despite another hefty sell-off in China and a mixed bag of corporate announcements. The FTSE 100 index rallies around 30 points higher, about 0.4%, to 6,53, with midcaps and the wider FTSE All Share posting similar gains.
The big company story emerges from the stiff-collared insurance world, where Swiss group Zurich Insurance (ZURN:VX) is reportedly considering a £4.9 billion takeover offer for the UK's RSA (RSA), sending the More Than-owner 11.2% higher to 486.8p. Shares highlighted the stock as a takeover target in a recent cover story.
High street bank Virgin Money (VM.) gains 6.4% to 398.5p on a 37% underlying pre-tax profit boost to £81.8 million in the six months to the end of June. Falling costs, higher lending and improving margins were behind the rise.
Manufacturing buy, build and improve specialist Melrose Industries (MRO) is the FTSE All-Share's biggest winner, gaining 11.6% to 284p. The private equity style operator has sealed a £3.3 billion deal to sell its Elster gas and electricity unit to US-listed manufacturer Honeywell (HON:NYSE), more than doubling its money since it acquired the business in 2012.
Automotive engineer and aerospace firm GKN (GKN) gains 7.2% to 316p as it announces a £499 million deal to acquire aerospace firm Fokker Technologies. The deal sees GKN become the number two global player in aerostructures and number three in electronic wiring systems. It is being funded by a £200 million share placing.
Fantasy miniatures maker Games Workshop (GAW) surges 6% to 560p on a 34% rise in pre-tax profit to £16.6 million in the year to 31 May. This was driven by exceptional costs in the prior year relating to the reorganisation of its Continental European operations. Pre-tax profit excluding these exceptional costs is down 1.9% while revenue at constant currency is 0.3% lower at £123.1 million due to continued difficult trading in Europe. The group has declared a total dividend of 52p per share.
Elsewhere, Lord Wolfson-led clothing colossus Next (NXT) rises 1.5% to £76.10 after raising full-year sales and profit guidance following a better interim sales performance. Cash-generative Next says it will shell out a further special dividend of 60p per share in November too.
Convenience food maker Greencore (GNC) gains 2.05p at 320.65p on a solid third quarter trading statement flagging respectable organic growth. Despite price deflation in the UK grocery market, Greencore still expects to deliver annual earnings per share growth 'within the range of market expectations'. Shares highlighted Greencore's re-rating potential at 247.1p in October.
Wine warehouse chain Majestic Wine (MJW:AIM), a running Shares Play of the Week, is marked up 1.5p to 423.5p. Following the transformational acquisition of online crowd funded retailer Naked Wines in April, Majestic cheers followers with the launch of Naked Wines' Click & Collect service across Majestic's UK store portfolio.
Takeaway pizza chain Domino's Pizza (DOM) climbs 3.9% to 834.5p after reporting a 28% increase in profit before tax to £32 million with like-for-like sales in the UK, its core market, up 10% in the six months to 28 June. The group has net cash of £19.2 million compared with net debt of £3.7 million this time last year.
Packaging group Mondi (MNDI) adds 1.4% to £15.03 on news it expects underlying earnings per share for the half year ended 30 June to between 65 and 70 euro cents, an increase of between 25% and 35%. Underlying operating profit is expected to be above last year's €377 million.