Equities have enjoyed a positive start to the day as eyes turn towards the US where the Federal Open Markets Committee will be closely watched for hints of interest rate rises. Click here to find out what The Trader Nicole Elliott thinks of the markets.
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RBS (RBS) has announced that its partial sale of its holding in US bank Citizens will be priced at $26 a share and comprises around 16 per cent of the share capital with a further 15 per cent overallotment option. The sale should yield $2.2bn to RBS, plus Citizens has agreed to buy back a further $250m worth of shares. RBS will be left with around 23 per cent of Citizens. We retain our buy rating.
Sticking with banks, Barclays (BARC) posted half year results which showed net profits rising 43 per cent to £1.6bn over the six months to June. Notably, executive chairman John McFarlane, praised the improving performance of the investment bank just two weeks after ousting chief executive Anthony Jenkins. We keep our buy recommendation.
Full year results from Sky (SKY) reflected strong trading over the period, during which the company added 973,000 customers, up 45 per cent on the previous year. Growth has been strong in the UK and Germany and numbers remained steady in Italy. Overall revenues rose 5 per cent and profits 18 per cent to £1.4bn. Buy.
Outsourcing services from government continues to prove fertile ground for Capita (CPI), which won £1.6bn worth of new contracts during the six months to June including being sole provider on a £1bn NHS framework for Primary Care Support Services. Over the first half revenues rose by 10 per cent and profits by 11 per cent to £264.9m. We stick with our buy rating.
Quintain Estates (QED), which owns vast swathes of Wembley and Greenwich in London, has attracted a 131p a share offer from private property investment business Lone Star which values the company at £700m, a premium to its net asset value. Management has recommended the offer.
Fund manager Jupiter (JUP) has maintained its momentum despite more mixed market conditions of late. Half year figures showed assets under management have risen by £1.4bn to £34.3bn and pre-tax profits rose sharply from £48.4m to £84m. Buy.
Transport operator National Express (NEX) says it is on course to meet its target of £100m of free cash flow in the full year after enjoying revenue growth in every one of its divisions during the opening six months of the year. Overall revenue rose by 2.2 per cent and like for like operating profits by 6 per cent after stripping out bid costs. We retain our buy rating.
The strong mortgage market conditions are reflected in good trading figures for the first nine months of the year at buy to let mortgage specialist Paragon Group (PAG). It has posted profits of £98m for the nine months compared with £88.3m last year. Buy.
Shares in Pets at Home (PETS) have dipped back a little after it published a first quarter trading statement which showed like for like revenue growth of 1.7 per cent but admitted that trading had been weaker in health & hygiene and also been affected by hot weather earlier this month. Our recommendation is under review.
Half year results at building products specialist Tyman (TYMN) showed revenues up 0.9 per cent after a subdued first half in the UK and ‘solid’ trading in the US. Improving margins meant underlying profits grew by 6.6 per cent. We keep our buy recommendation.
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Zurich Insurance, which is considering bidding for RSA (RSA), has confirmed that any bid it makes will be in cash.
House builder Taylor Wimpey (TW.) grew completions over the first half of the year from 5,695 homes to 5,842 homes and a 9.2 per cent uplift in selling prices fed through to an increase in profits of one third. The order book at the end of June stood at a record £1.86bn.
Despite declining overall markets, currency headwinds and strong comparatives with last year, shareholders in British American Tobacco (BATS) have reacted favourably to its interim results which included a modest increase in the dividend payout and a hint that a similar increase will be made in the full year payout.
Tullow Oil (TLW) has posted figures in line with reduced expectations after the slump in the oil price hit revenues, down 35 per cent at $820m, but losses narrowed to $10m. Management expects the $500m of cost savings it has targeted to begin to have an effect over the coming three years.
Funerals operator Dignity (DTY) has made the most of an unusually high death rate in the UK in recent months with half year revenues rising 19 per cent and pre-tax profits 43 per cent higher at £45m. Management now expects the full year to beat expectations.
Ingredients specialist Tate & Lyle (TATE) has said that recent trading has been in line with expectations and management expects to meet full year forecasts.
The housing market surge has benefited Rightmove (RMV), whose half year results show revenues climbing by 16 per cent and profits by 18 per cent. The company’s website is experiencing a record 110m visits a month.
Wealth manager St James Place (STJ) continues to go from strength to strength according to its interim results which showed a net inflow of £2.7bn into funds under management, taking the total to £55.5bn.
Engineer Renishaw’s (RSW) recent strong performance has continued with the company posting record revenues for the year to June of £494.7m with profits more than doubling to a record £144.2m.
Bakers and convenience food specialist Greggs (GRG) continues to see trading picking up with interim results showing a 6.4 per cent uplift in sales, with like for like sales up 5.9 per cent, and profits up from £16.9m to £25.6m.
Compass Group (CPG) reported strong trading in North America, where revenues for the nine months to June were up 7.8 per cent while emerging markets also continue to trade well but Europe and Japan are more subdued.
Central Europe-focused budget airline Wizz Air (WIZZ) has posted record first quarter profits of €33.9m and raised guidance for the full year.
A weaker London property market in the build up to the general election saw results from Foxtons (FOXT) suffer. Its half year results showed a 2.3 per cent decline in revenues and a near-20 per cent reduction in profits. Property sales revenue dipped 10.9 per cent while lettings revenue rose by 5.4 per cent.
