UK stocks rallied at the open on Tuesday, reversing much of Monday's losses, thanks to positive corporate news. At 8.45am the FTSE 100 index was up 58 points or 0.8% to 6,961 points, led by energy, mining and industrial stocks, while the FTSE 250 mid-cap index gained 159 points to 23,561.
Overnight US stocks fell heavily with the S&P 500 index falling 1.7% and the Nasdaq 100 falling 2.1%, while Asian markets were also weak with the Hang Seng index sliding more than 3% in Hong Kong.
Sterling held firm against the US dollar at $1.3675 while Brent crude prices climbed 0.3% to $74.60 per barrel and gold eased 0.1% to $1,762 per ounce.
The firms argue a combination would be ‘a strategically compelling proposition with significant growth and cost synergies’. Annual cost savings are projected at £35 million, with a third coming from network efficiencies, a third from technology and scheduling and a third from office rationalisation.
National Express shares gained 5% to 235p while Stagecoach shares soared 18% to 80p.
Following a 20% rise in first half turnover to £7.1 billion, the firm increased its second half revenue forecast and lifted its pre-tax profit guidance to between £910 million and £950 million, compared with a consensus forecast of £907 million.
The group also raised its interim dividend by more than a third to 3.8p per share and announced a £300 million share buyback. However, shares drifted off 3.5% to 355p after the firm warned of shortages of certain building materials.
The pay-out will take the form of a £79 million or 35p per share special dividend followed by a share buyback programme starting next month. Shares climbed 0.7% to £17.02.
The firm reported ‘solid’ trading in July and August, strengthening its confidence in the full year outlook despite input price inflation and material shortages. Shares gained 2.3% to 51p.
Global catering and foodservice group Compass (CPG) said its fourth quarter revenues were slightly ahead of expectations, returning to around 86% of 2019 levels thanks to the return of big sporting events.
The firm is ‘encouraged’ by the prospects for growth, with most of its sectors continuing to perform well, although it cautioned the recovery in its Business & Industry business remained uncertain due to the pace of office reopening varying around the world. Shares eased 0.7% to £14.75.
The firm reported continued strong momentum into the second half and said full year profits would be ‘substantially ahead of consensus’, lifting the shares 3.5% to 151p.
Funeral services firm Dignity (DTY) posted flat first half revenues and a 10% drop in pre-tax earnings, but said it was ready for regulatory change ahead of the official deadline with new governance, processes, products and infrastructure to meet the new rules.
It also said it had reviewed and adapted its pricing, launching competitively priced funerals in the UK ‘to lower the cost of dying’ for families. Shares drifted 3.5% lower to 716p.
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