UK stocks were subdued on Tuesday after strong September employment data and rising average wages sent the pound higher against the dollar and the euro, creating a headwind for the globally-focused FTSE 100 index.
Energy prices were higher with Brent crude up 1% to $83 per barrel as commentators talked of a tight market heading into winter, helping to lift the oil majors, but weakness in industrial stocks prevented the index from making progress.
At 9am the FTSE was marginally lower at 7,350 points while the FTSE 250 eased 26 points to 23,595 despite a raft of positive corporate earnings updates.
Net profits reached £2.83 billion compared with £1.5 billion the previous year and a consensus estimate of £2.35 billion, while revenues were little changed at £32.79 billion.
Property company Land Securities (LAND) returned to profit in the first half to September, delivering pre-tax earnings of £275 million against a loss of £835 million last year, as the London office market saw ‘a recovery in investment and operational activity’.
The firm also put forward a new strategy for its offices, retail properties and mixed-use urban sites, along with a plan to de-carbonise the business. Investors moved the shares 1.8% higher to 723p.
Transport groups National Express (NEX) and Stagecoach (SGC) reported that ‘constructive discussions’ over their proposed merger were ongoing and the Takeover Panel had agreed to extend the deadline for a deal to 14 December. National Express shares were flat at 241p while Stagecoach shares gained 1.8% to 77.75p.
Pre-tax profits for the first half to September were €1.28 billion against €2 billion last year, but the company raised its outlook for full year operating earnings and cash flow generation.
SMALL- AND MID-CAP NEWS
Audio specialist Focusrite (TUNE:AIM) posted a 28% rise in sales on a like-for-like basis for the year to the end of August and an operating profit of £35.9m or more than four times last year’s figure.
Chief executive Tim Carroll said he was ‘cautiously optimistic about the prospects for modest revenue growth in the current year’, helping lift the shares 8% to £16.26.
Chief executive Andrew Wass lowered his outlook for full year operating profits to ‘no less than £12 million’ compared with market forecasts of £14 million, sending shares 17% lower to 660p.
Shares in home repair group Homeserve (HSV) climbed 3.5% to 885p after it reported strong progress in the six months to September with revenues up 14% to £610 million and operating profits up 24% to £54.7 million.
The North American business beat expectations with an ‘outstanding’ performance in the half, while the Home Experts business finally turned a profit.
However, investors were unimpressed with net profits which were half the year-ago level at £21 million and sent the shares to the bottom of the mid-cap table, down over 6% at 107p.
Shares in Restaurant Group (RTN) leapt 12% to 89p, topping the FTSE 250 leader board, after the owner of Wagamama raised its full year operating profit forecast on better than expected trading across the business including at its airport concessions.
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