UK stocks eked out a small gain on Thursday as weakness in oil stocks crimped gains in consumer and technology stocks. The FTSE 100 index added 14 points or 0.2% to 6,909 points.
Global markets extended their rebound with analysts predicting more new highs to come as investors put aside fears over the resurgence of the virus to focus on the strength of corporate earnings.
Oil prices continued to drop after a surprise build in US inventories with Brent crude futures down 0.3% to $65.10 per barrel. Meanwhile, gold prices continued their recent rally, touching $1,795 per ounce, and sterling pushed back towards the $1.40 level as yield support for the dollar faded.
COMPANY NEWS
Pest control and hygiene group Rentokil (RTO) posted a solid first quarter with ongoing revenues up 15.4% to £711 million driven by organic growth of 9.4% and a 6% contribution from acquisitions.
Hygiene services were boosted by £75.7 million from one-time disinfection services while pest control reported 10.5% growth of which just 1.2% was organic.
The firm reported ‘growing momentum over the quarter’, particularly in pest control, but signalled a ‘material’ reduction in disinfection volumes and prices this quarter and projected ‘a significant unwind as the year progresses’. Shares fell 3.4% to 494p.
House builder Taylor Wimpey (TW.) confirmed its full year earnings guidance thanks to a healthy housing market ‘underpinned by continued strong customer demand, low interest rates, good mortgage availability and ongoing Government support, particularly for first time buyers’.
As of this week the company’s net private sales rate was well ahead of April last year, while the order book was also ahead at £2.8 billion against £2.67 billion.
Although it isn’t paying a special dividend this year the firm reiterated its long-term intention to return excess capital to shareholders. Shares dipped 0.2% to 183p.
Information and analytics group RELX (REL) said its three core businesses had ‘started the year well’ as it updated on its first quarter progress. Exhibitions, which make up a small part of revenues, continued to be impacted by Covid restrictions worldwide.
Overall the firm said it is looking at ‘another year of underlying revenue and adjusted operating profit growth similar to pre-Covid trends’ in its core operations. Shares gained 0.8% to £19.34.
Precision instrument maker Spectris (SXS) reported a strong start to the year with sales growth ahead of management expectations thanks to a faster than expected recovery in its end markets, in particular pharmaceuticals and semiconductors.
The recovery was most notable in Asian markets, where sales bounced by 24% during the quarter, well ahead of Europe and the US which saw declines of 1% and 2% respectively. Shares lost 0.3% to £32.90.
Investment platform AJ Bell (AJB) posted a strong second quarter update with customer numbers rising 11% from the first quarter and 32% year on year, driven by a 64% increase in platform customers compared with last year.
Net fund inflows hit £1.5 billion, taking total assets under administration to a record £65.2 billion, a 35% increase on the same period last year. Chief executive Andy Bell signalled ‘strong momentum going into the second half’. Shares gave up 0.6% to 464p.
Fast food purveyor Domino’s Pizza (DOM) released a mixed first quarter trading update, with sales up 18.7% thanks to ‘exceptional trading over the new year’ when the UK was still in lockdown, but collection services still running well below pre-pandemic levels.
Moreover, the firm declined to give an indication of second quarter trading or provide any full year guidance save to say it aimed to ‘capitalise on the opportunities which lie ahead’ as the UK exits lockdown. Shares lost 1.1% to 363p.
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Disclaimer: The author owns shares in AJ Bell, owner and publisher of Shares magazine
