On a day dominated by setbacks from the banking sector and a large amount of stocks going ex-dividend, the FTSE 100 still managed to achieve a small gain, rising 9 points to 6,414.
Investors welcomed a series of positive announcements from the retail sector, including a significant improvement in profit from Thorntons (THT). The chocolate specialist jumped 4.3% to 79p after saying that earnings would beat expectations, extending a long rally in the shares which is the subject of our analysis on the small cap here.
Banking investors continue to be optimists despite a succession of bad news from the sector. They certainly weren't worried by the collapse of Lloyds Banking's (LLOY) sale of 632 UK bank branches to the Co-op. The sites will now be sold as a standalone bank through a stock market listing. We look at the situation in more depth here.
Banking group Barclays (BARC) was up 3.6% to 309.2p despite its profits diving 25% in the first three months of the year. Its pre-tax earnings fell £609 million year-on-year to £1.8 billion due to management’s restructuring programme, which centres on its investment banking and private wealth management divisions as well as its credit card business, Barclaycard.
There are signs that Barclays is performing strongly in some areas. Its core tier 1 ratio increased to 11%, up from 10.8% in 2012 while its pre-tax profits in its investment banking arm increased 11% to £1.3 billion and bad debts fell 10% to £706 million.
Insurer Standard Life (SL.) shot up 4% to 366.8p after reporting strong first-quarter results. Its assets under management increased 7% to £233.1 billion, year-on-year, while net flows more than doubled over the same period to £2.8 billion. These were driven by a 24% rise in sales in the first three months of 2013.
Mike Ashley's Sports Direct (SPD) sprinted 9p higher to 455.6p on news of a strong end to the year. Over the nine weeks to the end of March, the sports retailing powerhouse's sales skipped 14.3% higher to £317.4 million, while gross profits grew almost 23% to £128.6 million.
Internet and catalogue retailer N Brown (BWNG) bounded 5.2% higher to 442p on solid final results and news of strong current trading. For the year to 2 March, pre-tax profits grew 2.6% to £96.4 million on sales up 6% to £784.7 million, while N Brown also pleased with news like-for-like sales were 6.1% ahead in the opening seven weeks of this year.
The bidding war for infrastructure services provider May Gurney (MAYG:AIM) took a new turn after Kier (KIE) finally made its offer, leaving original predator Costain (COST) out in the cold. Kier is paying a chunky premium which analysts reckon will easily seal the deal. A mixture of cash and shares, the bid valued May Gurney at 315p before the market open. The target nudged up 17.6% to 297.5p on the news.
Packaging group DS Smith (SMDS) jumped 5.7% to 228p after a solid trading update including lower-than-expected finance and tax charges. Revenue of £3.7 billion is slightly ahead of the £3.6 billion consensus figure.
Redrow (RDW) advanced 2.9% to 214.2p after the housebuilder reported a 12% rise in price of private reservations. The group also saw a 20% increase in reservations on the back of a higher number of outlets. Net debt at Redrow has risen in line with guidance to £145 million but the group still expects net debt to come in around £130m at the end of June 2013.
A short-term reduction in demand flagged up by surface coating specialist Hardide (HDD:AIM) saw shares in the specialty chemicals provider plummet 23.2% to 1.08p. The group said that despite continuing to reduce its dependence on a small number of large customers, a major inventory reduction exercise by one major customer, combined with delays in new product introductions by others has resulted in what was expected to be a short-term reduction in demand. Hardide is expected to produce revenue for the year to 30 September of around £2.5 million.
Low-cost African carrier Fastjet (FJET) saw it shares lose 12.5% to 1.75p after the group announced its intention to enter the South African market, raising the additional working capital need to assist with the venture though a successful placing with Blockbuster, a local institutional investor. The memorandum of understanding with Blockbuster will set up a joint venture (JV) to operate a service between Johannesburg and Cape Town. The JV will be 75% owned by Blockbuster, with the rest owned by Fastjet.
Cleantech Advanced Power Components (APC:AIM) jumped over 5% to 30.75p after bagging its second big LED lighting retail deal. The £2.8 million agreement, believed to be with Morrisons (MRW), will see back-of-house installations across several stores. This adds to a recent £6.1 million contract win, putting the £9 million microcap on target for its best ever year.
Leading set-top box maker Pace (PIC) rose over 5% to 237.6p after confirming a solid start to 2013. The Saltaire-based firm flags several new agreements plus strong cash flow, although revenues this year are unlikely to beat 2012's £1.48 billion.
Video search engine designer Blinkx (BLNX:AIM) unveiled a strong end to the year with revenues up 71% to $196 million, beating market expectations of around $180 million to $185 million. That sparked a 12% hike in the shares to 87p. The figures are not quite so hot on the bottom line, pre-tax profits growing 15%, but that hasn't stopped analysts at Numis Securities flagging its 108p target price, 24% up from here.
IT services giant Computacenter (CCC) saw a slump in Germany bite hard, the market slashing 13.7% off the shares to 464.5p. That's swiped nearly £110 million off the market valuation of the £720 million company. Germany revenue dived 12% to £280.6 million, more than offsetting an encouraging showing here in the UK, where sales rose 6% to £295 million. Management warns that matching 2012's performance will be tough.