As the banks' reporting season near conclusion, HSBC (HSBA) takes to the stage with a huge jump in earnings compared with major losses reported by many of its peers. Alas, its shares dipped 2.5% to 709.6p after results were hit by more than $4 billion in fines and compensation payments.
The bank made $20.6 billion in the year, 6% less than it reported in 2011. HSBC was fined $1.9 billion for money laundering in Mexico and for breaking sanctions with Iran and Syria. It also paid a further $2.3 billion for miss-selling some of its financial products, including payment protection insurance. These figures came less than a week after Royal Bank of Scotland (RBS) and Lloyds (LLOY) reported losses of £5.2 billion and £570 million, respectively.
HSBC reported a healthy core tier 1 capital ratio was 12.3%, up from 10.1% at the end of 2011, while its dividend jumped 10% to 45c, totalling $8.3 billion. Standard Chartered (STAN) will tomorrow be the last of the big five banks to report its 2012 results.
Acquisitions helped drive up a handful of FTSE 100 support service companies. Distributor Bunzl (BNZL) advanced 1.9% to £13.11 after buying Brazilian medical products group Labor Import. Testing group Intertek (ITRK) jumped 0.9% to £34.11 after making two corporate deals. It has bought 85% of Brazilian consumer products group E-Test and all of South Africa's food quality specialist Food Safety Assessment. Intertek also reported full-year results with a 19% rise in adjusted pre-tax profit to £308.4 million.
Small construction group Keller (KLR) advanced 1.8% to 759.5p as full-year results pleased the market. Pre-tax profit jumped to £43.5 million from £21.9 million the previous year, with Keller citing strong a North American performance as the key driver. Net debt also fell sharply in 2012, dropping from £103 million to £51.2 million year-on-year.
While economic conditions remain extremely challenging in Europe and the UK, as evidenced most recently by a disappointing showing in the UK's construction purchasing managers' index on 4 March, this was more than offset by a rise by a £20 million increase to £32 million in operating profit from the group's North American division.
Operating margins in the group's US and Canadian businesses also increased 3% year-on-year from 2.5% to 5.5% in 2012. Keller's European, Middle East and Africa division saw operating profit in 2012 slip to £2.2 million from £8.4 million the previous year. The group's Australian businesses meanwhile showed modest but steady improvement with operational profits rising £1 million year-on-year to £8.7 million.
Small cap explorer Metminco (MNC:AIM) owns one of the biggest copper exploration projects of any quoted miner, yet a question mark over how the project's $1.5 billion development will be funded has left the share price on its knees. Today's scoping study on its Los Calatos project in Peru shows that the asset is still worth pursuing, indeed Metminco reckons it has the potential to be a 'world-class copper mine'. The shares jumped 4.8% to 3.25p on the announcement.
Emeralds producer Gemfields (GEM:AIM) dipped 4.5% to 29.5p after half-year results showed a significant drop in earnings. This was caused by rising stock piles as production exceeded sales. Analysts are more confident about the second half of its financial year as there will be two emerald auctions and its maiden ruby auction. The company is also expected to conduct a full review of luxury goods retailer Faberge since buying the business in January. Later this month, Gemfields will unveil its new global marketing campaign featuring A-list Hollywood actress Mila Kunis who has been recruited as the miner's brand ambassador.
Leeds-based transport efficiency software supplier Tracsis (TRCS:AIM) advanced 6.8% to 173p thanks to impressive first-half figures. A 29% rise in revenues saw pre-tax profits jump 50% to £1.7 million, yet nearly 20% of its £43 million valuation remains in its £8.5 million cash. Tracsis is concentrating on rail and bus industry specific solutions, such as workforce scheduling, resource optimisation, data capture, and reporting technologies – all in demand from the major rail and bus operators. Condition monitoring, or checking that tracks are in good nick and safe, remains a key contributor (roughly 55% of sales) and as this work load makes the manual-to-automation shift, this should play well for Tracsis down the line.
Microcap cloud video editing software supplier Forbidden Technologies (FBT:AIM) saw its shares rise 2p, or 8%, to hit a year-to-date high of 27.5p. The jump comes in the wake of a contract win to supply its FORscene platform to sports media company Deltatre. However, there's no clue to the financial clout of the deal, so investors are left with little idea if it will significantly drive Forbidden's meagre revenues or put profits in sight. Last month's 2012 figures (25 February) showed revenues of just £812,744 and net losses of £216,715, so it will seemingly need a lot more deals like the Deltatre one to spark any real momentum in the business.
Kuala Lumpur-headquartered Purecircle (PURE: AIM) sweetened up 0.8% to 255p as investors responded positively to news of a major new product commercialisation from the world's largest high purity stevia ingredients producer. The £420 million cap has unveiled plans to commercialise its latest stevia innovation, 'high purity Reb D', which the food producer insists has one of the best sweetness and taste profiles of any steviol glycoside. Protected by a slew of patents, the new product has been submitted to the regulators for safety testing and strengthens the company's positioning in an emerging market.