UK stocks opened higher on Tuesday as focus shifted to the reopening of the economy. Oil stocks were boosted by rising commodity prices.
In early trading the FTSE 100 index was 0.4% ahead at 6,375.
BP (BP.) gained 4% to 264.4p and Royal Dutch Shell (RDSB) was 3% higher at £12.90, following a 0.7% increase in Brent Crude prices to $46.4 a barrel. The gold price slipped back 0.6% to $1,827 an ounce.
CORPORATE NEWS
Water utility Pennon (PNN) said adjusted pre-tax profits slipped 14.5% to £86.7 million as revenues fell 2% to £319.7 million due to a reduction in water usage as a result of the COVID-19 lockdown, partially offset by high household demand and contract wins for Pennon Water Services.
The dividend was increased 2.7% to 6.77p per share. Following the £3.7 billion sale of Viridor the group had £2.7 billion of available cash resources. The shares slipped 0.2% to 990p.
In a trading update for the 10 months to 31 October, quality assurance and testing group Intertek (ITRK) said revenues fell 7.2% to £2.2 billion and were 7.3% lower on a like-for-like basis.
With an improvement in second-half trading the company said it was on track to deliver a ‘resilient’ full-year performance after seeing sequential improvement in margin in the second half and expected to report lower net debts of between £570 million-to-£590 million. The shares dropped 1.4% to £59.80.
Food services company Compass Group (CPG) reported full-year revenues to 30 September down 18.8% to £20.2 billion and operating profits down 69.7% to £561 million as the company was severely impacted by the lockdown.
At the period end, net debt was £3 billion. The company returned to profitability in the fourth quarter and expects the first quarter operating margin to be around 2.5%. The shares gained 2% to £13.70.
UK food producer Cranswick (CWK) upped its interim dividend after reporting a rise in profit on strong export growth and robust demand following a shift toward greater in-home consumption amid the Covid-19 lockdown.
For the 26 weeks ended 26 September 2020, pre-tax profit increased by 13.3% to £53.7 million year-on-year as revenue rose 21% to £931.6 million. The company increased its interim dividend by 12.0% to 18.7p. The shares gained 35 to £37.30.
For the nine months through September, building materials company CRH (CRH) said sales fell 3% to £20.6 billion on like-for-like basis, while earnings before, interest, taxes, depreciation and amortisation (EBITDA) rose 2% to $3.4 billion.
Full-year EBITDA in 2020 was expected to be in excess of $4.4 billion, ahead of 2019 on a like-for-like basis. Full-year pre-tax and pre-impairment profit was expected to be ahead of 2019's $2.2 billion. The shares gained 2% to £30.
Insurance company Phoenix (PHNX) confirmed press speculation that it was mulling a sale of its European businesses. Phoenix said the European unit was an established participant in the life insurance market, with operations across Ireland, Germany and the UK offshore savings market.
Pet retailer Pets at Home (PETS) said first half pre-tax profit for the 28 weeks through 8 October increased 14.4% to £38.9 million, year-on-year, as revenue grew 5.1% to £574.4 million. The interim dividend was held steady at 2.5p per share.
The company said it expected to post a flat underlying pre-tax profit for the full year, assuming no escalation of Covid-19 restrictions or other unexpected disruptions. The shares dropped 7.8% to 386.2p.
Healthcare services provider UDG Healthcare (UDG) said net constant currency revenues rose 5% to $1.28 billion leading to a 7% rise in adjusted operating profit for the year to 30 September 2020.
UDG Healthcare upped its full-year dividend by 1.2%. The shares gained 2.7% to 769.5p.
Online electrical retailer AO World (AO.) swung to a profit in the first half of the year as a pandemic-fuelled surge in online sales boosted revenue.
For the six months ended 30 September 2020, pre-tax profit rose to £18.3 million from a loss of £5.9 million in the prior-year period, as revenue jumped 53.2% to £717.0 million.
The company said it expected its German operations to turn a profit in the second half. However the shares dropped 9% to 380.5p as investors took profit following a very strong run this year.
Drink and flavouring ingredient supplier Treatt (TET) posted a 11.3% rise in annual pre-tax profit to £14.8 million that it said exceeded its pre-Covid expectations.
Treatt declared a full-year dividend of 6p per share, up 9.1% year-on-year. The shares retreated 1.4% to 636.8p.
