UK stocks traded higher on Wednesday following a strong session in the US which followed through to strength in Asia overnight.
The broad and economically sensitive Russell 2000 index closed 1.6% higher in New York while Japan’s Nikkei 225 index gained 1.2% and China’s SE Composite index added 0.8%, easing market nerves.
Brent crude dipped 0.5% to $90.30 per barrel as traders took profits after a stellar run for the commodity and gold was flat at $1,827 an ounce.
In early trading the FTSE 100 index of leading shares was 0.4% higher led by housebuilders while financial stocks were the main laggards. The mid-cap FTSE 250 index gained 1% to 22,006 points.
CORPORATE NEWS
Pharmaceutical firm GlaxoSmithKline (GSK) said full year revenues to 1 December rose 5% to £34 billion in constant currencies while adjusted earnings per share were 5% higher at 113.2p, beating analysts’ forecasts.
The pharma division grew revenues by 4% to £17.7 billion, with the consumer health division which is due to be spun out by mid-year delivering 4% growth to £9.6 billion excluding divestments and the vaccines division posting a 2% revenue gain to £6.8 billion.
Looking to 2022, Glaxo guided for biopharmaceutical revenues to grow between 5% and 7% and adjusted operating profit to grow between 12% and 14%. Guidance excludes contributions from Covid-19 products.
A 23p per share dividend was declared for the fourth quarter taking the full year pay out to 80p per share. The shares gained 0.5% to £16.52.
REJECTED BID
Shares in aviation services group John Menzies (MZNS) jumped 28% to 430p after it said it had rejected a second takeover approach pitched at 510p per share from Kuwait's National Aviation Services, representing a premium of 52% on yesterday’s closing price.
The board unanimously rejected the offer calling it ‘entirely opportunistic’ and claiming it ‘fundamentally undervalued’ the company.
Packaging company Smurfit Kappa (SKG) said strong demand for cardboard boxes offset higher material and energy costs to drive full year pre-tax profit up 22% to €913 million as revenues climbed 18% to €10.11 billion.
The company declared a dividend of $0.96 per share, a 10% increase. The firm said current trading was ‘strong’ and its integrated and paper and packaging system remained effectively sold-out. The shares gained 2.6% to £40.58.
Branded consumer goods company PZ Cussons (PZC) said an easing of demand for its hygiene products reduced first half revenues by 9% to £283.7 million, a drop of 2% on a like-for-like basis.
Pre-tax profit fell 8.3% to £32 million but the company maintained its dividend at 2.67p per share which it said reflected ‘confidence in the underlying business momentum’, while recognising that challenges remain for the second half.
The company added that commodity and freight cost pressures showed no sign of abating in the near term. The shares gained 1.2% to 192p.
INCREASED GUIDANCE
Housebuilder Barratt Developments (BDEV) said first half pre-tax profit rose 0.6% to £34.5 million on revenues which fell 9.9% to £2.25 billion.
Total home completions fell 11.1% to 8,067, reflecting unusually high completions in the prior year due to Covid-19 dislocations.
Looking forward the company said it was on track to deliver total completions of 18,000 to 18,250 in fiscal 2022, an increase of 250 homes on previous guidance and in excess of the total home completions delivered in 2019. The shares added 3.6% to 650p.
Shares in homewares retailer Dunelm (DNLM) leapt 4.5% to £13.21 after it reported a record first half pre-tax profit of £140.8 million, up 25.3% year-on-year as revenues climbed 10.6% to £795.6 million.
The first half dividend was increased by 16.6% to 14p per share and the company also announced a special dividend of 37p per share.
The company said trading in the second half including its winter sale continued to be ‘encouraging’ and the board reaffirmed 2022 pre-tax profit would be in line with recently upgraded guidance.
A list of FTSE 100 index movers can be seen here.
