Lower commodity prices were always expected to trigger a fall in second quarter profits on the previous three month at Anglo-Dutch oil major Royal Dutch Shell (RDSB), as we previously discussed. Yet $4.6 billion is some way south of consensus. Analysts had expected numbers to be broadly in line with the same period in 2012 at $5.7 billion. The blame is put on oil thefts in Nigeria, rising costs and adverse currency movements, sending the shares down 4.2% to £22.21.
Part state-owned lender Lloyds Banking (LLOY) is up 6.5% to 72.9p after reporting its first interim profit for three years, strengthening the argument for the return of dividends. The bank made £2.1 billion pre-tax in the six months to July, reversing the £456 million loss it made during the same period in 2012. We look at the results in more detail here.
Jupiter Fund Management (JUP) soars 7.5% to 349p after releasing a very strong set of half-year figures ahead of market expectations. Assets under management have gone from £23.4 billion a year ago to £29 billion. The dividend's gone up 40% to 3.3p.
Having enjoyed a strong rally in the past year, and an extra spurt in early July from a major contract win with Lloyds Banking (LLOY), it seems the market believe that all the good news was already priced into Communisis (CMS). It falls 7.8% to 62.25p on half-year results due to profit taking. We stick with our positive stance as there's plenty of good news in the interims to suggest the business is achieving its growth targets. For example, it set a target to have 20% of sales outside the UK by 2015. Last year the figure was at 5%, now it has soared to 13%, considerably ahead of Communisis' expectations.
Trinity Mirror (TNI) nudges ahead 0.7% to 116.25p as it reports a 2.5% rise in half-year pre-tax profit at £49.3 million. Net debt is coming down as a result of strong cashflow and the company says it is on track to achieve at least £10 million of structural cost savings this year.
Investors are changing their tune over LED lighting specialist Dialight (DIA), up 7% to £11.78, as it secures a vital US mobile communications tower lighting contract in the US. It's obstruction arm has been under the cosh for a while, but Shares recently spelled out why the company remained brilliantly placed.
Emergency power specialist Aggreko (AGK) has struggled to revive its share price rally since two profit warnings in 2012. Today's interim results don't help its cause as investors worry about a 2% drop in pre-tax profit. The shares fall 5.8% to £16.76. This is despite Aggreko's best efforts to sweeten shareholders with a 10% rise in the dividend. Margins in its Power Projects arm – which provides temporary supply for large users – are slipping, trading is also 'subdued'. But its Local business – which rents small generators to large cooling plants – is seeing the opposite.
Property services group Countrywide (CWD) slips 2% to 598.7p as investors use interim results as a trigger to lock in some profits following a strong rally since rejoining the stockmarket earlier this year. to a lack of surprises in its interim results. Half-year income improves 4% to £258.8 million, while operating profit is up 47% to £22 million during the period. Management proposes a 2p per share interim dividend.
Medical technology giant Smith & Nephew (SN.) dips 0.8% to 778.2p after half-year pre-tax profits falls 75% year-on-year to $392 million. This was on a 3% rise in revenues to $1 billion, driven by a strong performance in its wound therapy business. The board has increased the dividend by 5% to 9.9c.
Pharmaceutical AstraZeneca (AZN) falls 0.7% to £33.10 as its interim revenues decline 4% to $6.2 billion following a series of patent expires. This led to its pre-tax profits diving by 10% year-on-year. One high point is cash generation for the period, up at $3.8 billion compared to $2.7 billion a year earlier.
The market clearly anticipated the 6% fall in BAE Systems (BA.) interim profits due to US budget cuts. That's seemingly old news. The shares rise 3.6% to 461.8p on promises of 'double-digit growth in underlying earnings per share' in 2013 after previous guidance for a more modest gain. First-half earnings before interest tax and amortisation (EBITA) comes in at £865 million against consensus expectations for £885.7 million with the second half improvement reliant on the conclusion of a Saudi jet deal. Read our latest analysis of the company from March.
Branded homewares firm Portmeirion (PMP:AIM) cheapens 1.5% to 640p as profits fall 38% to £900,000 in the seasonally-slower first half, mainly impacted by an anti-dumping duty imposed by the European Union on ceramics imported from China. The £69.2 million cap may still achieve full-year profit estimates in the seasonally-stronger second half assuming US gift-giving picks up ahead of Christmas, UK sales benefit from the birth of Prince George of Cambridge and web-based sales strengthen. Freddie George, retail analyst at Cantor Fitzgerald, is sticking with his £7 million profit (2012: £6.7 million) estimate for 2013. He reiterates a 'buy' rating and raises his price target from 650p to 700p 'to reflect the strong performance of the personal and household sector over the last quarter.' Read our recent article highlighting Portmeirion's investment attractions.
Diagnostic specialist EKF Diagnostics (EKF: AIM) improves 0.9% to 25.5p as management voice confidence in meeting market expectations for the year. Revenues for the six months to July were some 18% ahead of the same period last year at £14.9 million with more details expected in next month’s interims (16 Sept). Read our article on EKF from January.
Heavy construction specialists Costain (COST) jumps 7.5% to 285p amid the acquisition of EPC Offshore, a specialist oil and gas project management services company, for an initial consideration of £9.6 million (plus £1.0 million for excess cash).
After disappointments earlier this year, investors welcome reassurance from specialty chemicals group Carclo (CAR) that trading is on track to hit board targets, sending the shares up 9.3% to 375p. This bodes well for our Plays of the Week trade – read the story here. Adding to the share price strength are positive comments from US manufacturer Atmel which licences technology from Carclo.
An expected 19% drop in half-year revenues from telco testing kit supplier Spirent (SPT) is offset by improving order intake. That has investors bidding up the shares 5.5% to 139.5p, a switch in sentiment Shares flagged in April.
Steady as she goes half-year results for electronic components supplier Laird (LRD) need watching after it talked up second-half weighting this year. That's been a euphemism for impending profit warnings for many this year. The wording jangles the market's nerves, slicing 2.6p off the shares to 190.4p, although a 14% rise in orders is more promising.
First-half results remain ugly for education gadgets supplier Promethean World (PRW:AIM) with revenues slumping 15%, and there's little hope for change any time soon. It's had a horrendous three-year run that has reduced the value of the company by 90% on squeezed education spending in the UK and US. News that losses halved in the six months and net cash remains robust at £9.1 million is not enough to prevent another 10% share price slump to 15p.