UK and European shares opened higher on Monday as China’s factory output grew faster than expected in October and Japan's third-quarter GDP beat estimates. The FTSE 100 was up 0.4% at 6,353 points in early trading.
Also helping sentiment was the signing of a new regional free-trade agreement between Asia Pacific nations including China, Japan and South-Korea encompassing nearly a third of global GDP.
The news pushed Asian stocks to a record close with the Nikkei 225 index gaining 2% and China’s SE Composite rising 1%. Brent crude prices rose 2.2% to $43.7 a barrel and Gold prices firmed 0.2% to $1,893 per ounce.
CORPORATE NEWS
Global technology company Smiths Group (SMIN) reported first-quarter sales to 31 October down 2% on an underlying basis and said it was confident of meeting full-year market expectations.
The restructuring programme was said to be progressing well and expected to deliver £30 million savings in the current year and £70 million in 2022. Strong cash generation saw cash balances rise to £413 million at the period end. Shares gained 2% to £15.3.
Reporting on the first-half, telecom company Vodafone (VOD) posted slightly better than expected top-line earnings. Overall revenues dropped 2.3% to €21.4 billion, but service revenues were just 0.8% lower compared with market forecasts of a 2.3% drop.
The company reaffirmed its free cash flow guidance of at least €5 billion and adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of between €14.4 billion and €14.6 billion. The interim dividend of 4.5 euro cents was unchanged. Shares added 3.5% to 123.7p.
Distributer of seals, controls and life sciences group Diploma (DPLM) raised its full-year dividend to 30p per share from 29p after saying underlying revenues recovered strongly in the second-half.
Underlying full-year revenues to 30 September fell 7% but tight cost management and excellent working capital management saw free cash flow up 28% to £72.5 million.
The company said it was confident in the growth outlook and expected to deliver a strong performance with a return to mid-single digit growth and historic margins, in line with market expectations. Shares gained 1.5% to £23.3.
In an extremely brief first-quarter trading update for the period ended 31 October, software reseller Softcat (SCT) said it had performed well and delivered year-on-year growth in revenues and operating profit while also achieving its recruitment targets.
The board was said to be pleased with the results to date and noted further positive momentum heading into the second-quarter. Shares gained 5.8% to £11.82.
IT provider Kainos (KNOS) reported first-half revenues up 23% to £107.2 million and a doubling in pre-tax profit to £24 million for the period ended 30 September.
The company said its contracted order backlog grew 38% to £180.9 million which continued to underpin further revenue growth. The dividend was increased by 83% to 6.4p per share. Shares gained 4% to £12.30.
Engineering and consultancy company Wood Group (WG.) announced it had completed the planned sale of its joint venture interest in Canadian gas turbine group TransCanada to partner TC Energy for $67 million.
The deal represented a multiple of about 7.6 times Wood's share of expected 2020 EBITDA.
Wood said the sale formed part of its focus on portfolio optimisation, with the cash proceeds to reduce debt. Shares added 2.8% to 279.7p.
Gem Capital said it had made a £19.16 million cash offer to acquire oil and gas explorer Volga Gas (VGAS:AIM).
Upon completion of the deal, Volga Gas would become a private company, and its shares would be delisted from the stock exchange.
Volga Gas shareholders would receive 23.71p per share, representing a discount of around 3.2% to the closing price of 24.50 pence on 13 November.
The company said shareholders, representing about 80.07% of Volga Gas's existing issued ordinary share capital, had indicated they would be open to the offer. Shares dropped 6% to 23p.
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