Equities in London started the day brightly after a more positive showing overnight in Asia. Click here to see what The Trader Nicole Elliott makes of the markets.
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As expected, Royal Dutch Shell (RDSB) revealed a steep decline in profitability, with earnings on a current cost of supplies basis down 56 per cent in the final three months of last year to $1.84bn. Ben van Beurden highlighted the action on cost-cutting over the past year in the face of falling oil prices. Shareholders will be relieved that Shell announced a fourth quarter dividend of $0.47 a share, with a similar payment expected for the first quarter. Buy.
The share price was pointing north this morning for catering group Compass (CPG) with the stock up more than 5 per cent this morning on the back of strong first quarter. Management said organic revenues grew 5.9 per cent for the three months to 31 December thanks to a mix of new business and its continued cost-cutting programme. North America was the standout performer in terms of regions with revenues up 7.9 per cent while Europe and the ‘rest of world’ divisions registered turnover rises of 3.6 per cent. Buy.
Rail group Stagecoach (SGC) will be in the mix to defend the South Western rail franchise it operates. An announcement has been made today that the company - whose South West Trains run on the routes of the franchise - will be pitted against rival FirstGroup (FGP). Stagecoach has held the contract to run the route since 1996. It accounts for roughly 14 per cent of all rail journeys made in the UK. The Department for Transport has yet to confirm the length of the contract but is expected to conclude its consultation on 9 February. The contract will start in 2017. Stagecoach - sell. FirstGroup - hold.
Good news from Carclo (CAR). The technical plastics products specialist has confirmed that trading improved in the second-half, driven by strong performances across all divisions. While Technical Plastics was buoyed by success in the US and a new facility in China being fully operational, LED Technologies benefited from a further programme with an existing supercar lighting customer. Meanwhile, Precision Engineering reported improving order intake. Buy.
Shares in Daimler (DE:DAI) fell 3 per cent after the German automotive company forecast slower growth in 2016. The Stuttgart-based group, which posted record revenues and earnings the prior year off bumper sales of Mercedes-Benz cars, said tough comparatives mean sales growth will likely be slower in the year ahead. Buy.
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Vodafone (VOD) revealed a 1.4 per cent rise in organic service revenue to £9.17bn in the third quarter to 31 December. That reflected growth of close to 7 per cent in emerging markets, offset by a slight decline in Europe.
Insurer Beazley (BEZ) reported a 3 per cent rise in gross premiums written and an 8 per cent rise in pre-tax profits. Its combined ratio of premiums to claims also fell to 87 per cent, slightly lower than its five year average.
Shares in accesso (ACSO) rose 5 per cent after the e-ticketing and virtual queuing group’s directors said they expected full-year figures to be “comfortably in line with expectations”. They also highlighted strong trading this year: the ShoWare and Siriusware divisions have inked 16 and four contracts respectively.
BHP Billiton spin-off South32 (S32) has flagged "substantial" job losses and warned of a $1.7bn asset value write-down, following a review of its Samancor Manganese Joint Venture in South Africa.
Shares in newly-floated CYBG (CYBG) rose 2 per cent despite Moodys downgrading the bank’s long-term deposit rating to Baa2 from Baa1. Clydesdale’s commercial paper rating was also downgraded to Prime-3 from Prime-2. However, its standalone baseline credit assessment was upgraded baa3 from ba1. CYBG said the downgrades will not materially affect the bank’s ability to raise funds or the cost of funding.
Satellite telecoms group Avanti Communications (AVN) revealed underlying sales growth of 18 per cent in the six months to 31 December. It also inked $40m in contracts with governments and large telcos in the second quarter, underpinning management’s guidance of constant-currency sales growth of 50 per cent for this financial year. But a reported pre-tax loss of £45.5m sent the group’s shares down 8 per cent.
Legal & General (LGEN) chief financial officer Mark Gregory has announced his retirement at the start of next year. A replacement is yet to be announced.
Imperial Innovations (IVO), which invests in early stage technology groups, has announced a £100m placing at 425p a share. The group intends to use the net proceeds to invest further into portfolio companies.
