London shares continue their run of moderate gains as investors take heart from soothing noises from the US Federal Reserve that it is going to hike interest rates immediately, even if it remains likely to do so later this year. There's also a swathe of big corporate announcements to factor in, including mixed news of massive UK job cuts by oil giant Royal Dutch Shell (RDSB) and energy group Centrica (CNA).
Shell has unveiled plans to axe 6,500 jobs following a 35% decline in quarterly profit, a cloth-cutting exercise welcomed by investors given the group's stark warning that the oil price slump could last 'several years.' The market evidentally sees this belt-tightening as the right move, marking the stock 2.8% higher at £18.26, heading the Footsie leader board in early trade on Thursday.
But Centrica's own decision to reduce it workforce. The British Gas-owner will cut up to 4,000 jobs following a strategic review as it posts a near doubling of profits, albeit in a decidedly two-speed set of half-year figures. While consumer-facing British Gas posts record interim operating profit, these are completely offset by Centrica's beleaguered exploration and production arm, sending the stock hurtling towards to top of today's biggest FTSE 100 fallers, down 2.5% to 268.4p.
Big British telco BT (BT.A) is also in the wars, off nearly 3% at 460.35p, despite posting adjusted pre-tax profits up 9% to £694 million in the first three months of this year to 31 March 2016. This negative feel comes from slightly disappointing results in its recent star Consumer arm, despite posting decent growth and adding 5% to ARPU.
Among other blue-chips of note, Royal Bank of Scotland (RBS) advances 1.7% to 395.3p after beating analyst forecasts in the second quarter despite losing £153 million in the six months to the end of June. Having picked up a £1.8 billion fine for mis-selling, plus other costs and penalties, the market is buoyed by a £293 million net profit in the second quarter, up from £230 million a year earlier.
Drug, pill and medicine-maker AstraZeneca (AZN) gains 2.2% to £42.86 on raising its revenue guidance for the year to a low-single-digit decline from the original forecast of a mid-single-digit fall. This follows sales of new drugs helping to limit its revenue decline to a 7% drop to $6.3 billion in the second quarter.
Among the bigger movers, media agency Chime Communications (CHW) soars 25% to 345p as the company confirms recent rumours that a buyer is lurking in the background by telling the market that it is in advanced talks with private equity firm Providence Equity and ad agency giant WPP (WPP) over a possible cash offer at 365p per share.
Xchanging (XCH) crashes 22% to 98.25p as it books a half-year pre-tax loss of £44.4 million, down from a profit of £22.2 million a year ago.
Vitesse Media (VIS:AIM) slumps 29% to 1.5p as it terminates a its Crowd-Funding Services Agreement. It is in is in advanced talks with an established UK crowdfunding business to form a strategic alliance.
Cruise and tour company All Leisure (ALLG:AIM) slumps 24% to 9.5p after warning ongoing conflicts in the Ukraine and Syria and increased price competition in the industry will negatively affect its profitability in the second half and beyond. The group's loss before tax narrowed from £15 million to £12 million in the half year to 30 April but revenue fell by 6.5% to £45.9 million.
Theme park ticketing and experience software supplier Accesso Technology (ACSO:AIM) rallies 17% to 625p as it finally ties-up a long-term deal with parks and attractions operator Merlin Entertainments (MERL) after a brief pilot scheme. The deal is significant, it will mean Accesso's Passport platform embedded across Merlin's 100-plus sites, including Alton Towers, Madame Tussauds and LEGOLAND, compared to just seven during the trial run. CEO Tom Burnett, clearly chuffed with the deal, also confirms ongoing strong trading across the business that will see 2016 and 2017 results likely beat current market hopes, good news for readers that followed Shares' Play of the Week story in February.
Elsewhere, Smirnoff vodka-to-Johnnie Walker whisky maker Diageo (DGE) froths up 4.5p to £18.44 despite a disappointing full-year topline performance. A pre-tax profit improvement to £2.9 billion beats expectations, while CEO Ivan Menezes ups the dividend 9% to 56.4p and identifies a further £500 million of cost savings.
Luxury car retailer Inchcape (INCH), a premium motor purveyor with a bias to troubled emerging markets, accelerates 6.5% to 801.5p on robust interims and the announcement of a new £100 million share buyback. Shares flagged scope for a relief rally in our look at the automotive retail sector here.
Women's value retailer Bonmarche (BON:AIM), one of Shares' 15 for 2015 selections, ticks up 0.5p to 296p on news of a solid start to the new financial year, with like-for-like sales improving on the previous quarter 'despite inconsistent spring and early summer weather.'
Outsourcer Babcock (BAB) sinks 3.5% to £10.03 as a trading statement issued this morning appears to put earnings per share estimates under pressure. Much of Babcock’s growth is acquired rather than organic and its bid pipeline is in decline, say analysts at Liberum. They reiterate a ‘sell’ recommendation.
Crowne Plaza and Holiday Inn operator InterContinental Hotels (IHG) slips 1.1% to £25.95 despite reporting a 10% rise in underlying operating profit and an 8% increase in revenue in the six months to 30 June. Growth at actual exchange rates is 9% and 1% respectively. Revenue per available room is up by 5.1% with growth across all its regions and the company says it is confident in the outlook for the rest of the year.