Despite ongoing concerns over the Wuhan virus, shares in London have rebounded sharply after their recent losses, with the FTSE100 in particular boosted by a fall in value in the pound. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
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BP (BP.) has said farewell to chief executive Bob Dudley by increasing its dividend, even as revenue and its profit marker fell last year. The supermajor’s underlying replacement cost profit for 2019 was down a quarter on the year before because of weaker commodity prices and what outgoing finance chief Brian Gilvary described as the “one of the worst refining environments since the financial crisis in 2008”. The quarterly dividend was increased 2.4 per cent for the three months to December, to 10.5 cents (8p). Incoming chief executive Bernard Looney, who starts tomorrow, said he wanted to reassure investors of his commitment to BP’s “fundamental principals”, and would aim to increase cash flow and cut the company’s debt load. BP shares were up 4.5 per cent on the results, to 473p. Sell.
Ferguson (FERG) will consult with shareholders on two proposals for its listing structure, following its decision to demerge its UK business and become solely US-focussed. The construction supplier will either seek shareholder approval for the additional listing of shares in the US or secure a primary US listing. It expects that either plan will be adopted by the close of its 2021 first half. Ferguson also announced its intention to buy back $500m in shares over the next 12 months. Buy.
QinetiQ (QQ.) announced its acquisition of training and simulation businessNewman & Spurr Consultancy for £14m. The group also revealed that it secured a €75m observation contract with the European Space Agency in January. Buy.
St Modwen (SMP) reported a 4 per cent rise in adjusted net asset value during the year to November to 504p a share. Development activity boosted industrial and logistics exposure to 44 per cent of the total portfolio by value, while the house building business increased the volume of homes sold by a quarter and the operating margin by 40 basis points to 14.8 per cent, towards a medium-term target of between 16 and 17 per cent. Buy.
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Shares in Mattioli Woods (MTW) are up in early trading, despite the wealth management firm posting no change in its total client assets in the six months to November. As ever, it is the discretionary asset pile that investors should pay attention to; this rose 3.8 per cent in the period, mirroring the increase in first-half revenue. Encouragingly, cash, profits, margin and the dividend are all up.
Electrocomponents (ECM) announced that its chief executive Lindsley Ruth will return to his post on 10 February after a short period of absence due to illness. An accompanying trading update detailed overall revenue growth for the group’s four months to 31 January, which included a 4 per cent contraction in central Europe owing to continued sluggish performance in Germany. Electrocomponents shares rose 5 per cent in morning trading.
WANdisco (WAND) expects to report revenues of around $16m for 2019, with a year-end cash balance of $23.3m. Management is confident that this will enable the company to achieve cash-flow breakeven. Revenues were below expectations, but the group said that it delivered strong sequential revenue growth in the second half (about 67 per cent). Some significant deals slipped from the end of 2019 into 2020. Most of these were within WANdisco’s Microsoft channel, where customers have decided to wait until its embedded Azure product is publicly available. These delayed deals are now expected to close early this year, supporting management’s confidence in meeting market expectations.
Micro Focus (MCRO) reported a 7.3 per cent slump in revenue in its annual report, in line with guidance issued in August last year. The group, which is still grappling with its complex acquisition of HP’s software business in 2017, also announced the departure of executive chairman Kevin Loosemore effective from 14th February. Mr Loosemore, who has spent 15 years in the role, was made chairman of De La Rue (DLAR) in October.
RM’s (RM.) revenues rose by 1 per cent to £224m over the year to November 2019, with good growth in its results and education businesses offset by a decline in the resources segment. The latter endured a “challenging year”, largely because of constrained trading in the UK. RM said that progress continues on consolidating resources’ five distribution centres into a single automated facility, which is expected to be completed by the end of 2021. Overall, international revenues rose by 18 per cent. Net debt increased from £5.8m to £15m, following the funding of the acquisition of e-testing company SoNET last June.
