London shares rally sharply in early trading on Tuesday as gains among supermarkets and resources stocks provide strong direction for a string of UK companies. The fact that both Wall Street and Asian markets also rose adds to the run higher. The FTSE 100 index jumps more than 100 points, or 1.7%, to 6,252, while midcaps leap back over the 17,000 mark, the FTSE 250 hitting 17,056.
A deluge of corporate news is led by engineering conglomerate Smiths (SMIN). Its shares soar 10% to £10.20 on news changes to its pension funding structure will increase the company's free cash flow by £36 million a year by 2017. The group has also issued a trading statement which reveals revenue fell by 4% in the three months to 1 November due to the tough oil and gas end markets.
Also in the engineering space, Bodycote (BOY) gains 10.5% to 535p despite a trading update revealing an 8% drop in underlying sales and an admission there will be no near term improvement in its markets. Investors are instead focusing on profit guidance, which is being maintained at between £101 million and £106 million.
Supermarkets operator Sainsbury's (SBRY) ticks 3.2% higher to 250.9p as the latest grocery share figures from Kantar Worldpanel shows a 1.5% sales increase for the 12 weeks to 8 November, a performance flying in the face of tough market conditions.
Tenanted pub group Enterprise Inns (ETI) climbs 5.9% to 100.6p on like-for-like growth of 0.8% in the year ending 30 September with pre-tax profit £1 million higher at £122 million. The company says the execution of its strategic plan, which includes building a managed business and selling under-performing assets, is on track. Net debt has edged down from £2.4 billion to £2.3 billion.
Equipment rental firm Lavendon (LVD) adds 6% to 143p as sales growth improves a little in the UK and slows in the Middle East and Europe. Growth across the business was 1% on a constant currency basis in the third quarter.
Budget airline Easyjet (EZJ) slips 3.5% to £17.21 despite posting a record 18% rise in pre-tax profits to £686 million in the year to September 30. Worries over travel are clearly still echoing across Europe in the wake of the terror attacks on Paris.
Among the bigger movers, mobile marketing play CDialogues (CDOG:AIM) slumps as it warns on profits for the third time in a little over four months. The company, which principally operates in the Middle East and Vietnam, says delays to project launches mean earnings before interest, tax, depreciation and amortisation (EBITDA) for 2015 will be ‘materially below current market expectations’.
Interior fitout specialist Havelock Europa (HVE:AIM) crashes 43.5% to 6.5p on news of a material 2016 profits hit, with the company's biggest financial services customer set to substantially reduce its refurbishment spend next year.
App store operator Mobile Streams (MOS:AIM) rises 12% to 17.13p as it talks up its shift from subscription to ad-funded 'freemium' revenues, matching consumer trends. But trading in its core Argentina market remains under pressure, which will likely hit first half income.
A strong first half from Carclo (CAR) sees the speciality chemicals outfit powering up 7.4% to 120.9p after operating profit before exceptional items increased by 82.2% to £4.7 million in the six months to the end of September.
TV and film rights business Entertainment One (ETO) is up 3.3% to 233p as it delivers first half earnings ahead of forecast and confirms it is on track to double the business by 2020. We will have more on the story later.
Terry Leahy-chaired discounter B&M European Value Retail (BME) cheapens 4.4% to 305.5p despite unveiling a 25.4% interim pre-tax profit hike to £66.4 million. A cautious outlook statement flags disappointing sales in the build-up to Christmas, caused by short-term operational challenges and the impact on cold weather and seasonal ranges of unusually mild temperatures.
Housebuilder Crest Nicholson (CRST) adds 1.7% to 518.5p after reassuring investors its growth strategy continues to deliver, after it reported an 8% year-on-year increase in housing volumes this year.
Real estate investment trust British Land (BLND) rises 1.5% to 832.5p on higher than expected growth in the value of its net assets by 7.5% to 891p a share in the six months to 30 September as demand for office space pushes prices higher.
Drug developer Allergy Therapeutics (AGY:AIM) falls 6.7% to 29.2p on plans to raise £12 million through a placing. More than 41 million shares will be sold for at least 28p each to fund product development.