London afternoon: Miners push Footsie higher

30th Jul 2009 14:48

Corporate news-flow and resurgent miners are driving Footsie higher today, with the benchmark index adding to its gains over the lunch-time session. Telecoms giant BT racked up a double-digit percentage gain in the morning after quarterly figures that were not as bad as feared. EBITDA (earnings before interest, tax, depreciation and amortisation) fell 3% in the first quarter, largely due to the troublesome BT Global Services division. Adjusted EBITDA came in at £1.3bn against £1.4bn in the same period last year, but lower finance income and higher finance expenses pushed first quarter profits, on a reported basis, down 45% to £272m.Royal Dutch Shell, Britain's biggest company by market value, is little changed after results that were in line with expectations. The oil giant said its second quarter results were affected by the weak global economy as net profit slumped 70%. Second quarter earnings, on a current cost of supplies (CCS) basis, came in at $2.3bn, against $7.9bn a year earlier. In the six month period, CCS earnings fell 64% to £5.6bn. The withdrawal of two generic competitors to heart drug Toprol XL helped AstraZeneca boost second quarter sales and raise full-year earnings targets. Anglo-Swedish firm Astra posted a 9% increase in sales at constant exchange rates (CER) to $7.96bn. Pre-tax profit for the three months to 30 June rose 14% to $2.6bn and core profit leapt 32% to $3.4bn.Specialist publisher Reed Elsevier is the worst performer after announcing plans to increase its shares in issue by around 9.9% through a placing to pay off debts after an acquisition. Reed acquired the operator of the Lexis Nexis news archive system ChoicePoint for $4.1bn and had intended to pay for this with the sale of its business information division, but shelved the plans because of the economic environment. Reed saw revenue from continuing operations rise to £3,060m in the first half of 2009 from £2,454m a year earlier. Profit before tax more than halved, however, to £188m from £393m as net finance costs ballooned to £138m from £67m.Pennon is another Footsie stock in the doghouse after announcing fund raising plans. The water firm Pennon Group, which said it has been performing in line with management expectations since the end of the first quarter, intends to offer £120m of senior unsecured convertible bonds.Broadcaster and broadband provider BSkyB posted a sharp rise in profits in the year to June 30 as householders continued splashing out on home entertainment amid tough economic conditions. The firm posted a profit before tax of £456m, compared with £60m over the previous year as revenues rose to £5.35bn from £4.95bn.Aero engine company Rolls-Royce reiterated its guidance for the full year but said the global trading environment remains 'very difficult', adding that the recovery is likely to be slow. Underlying pre-tax profits, which excludes the non-cash impact of the hedge book and other financial instruments, rose 9% to £445m in the six month ended 30 June.Its fellow aerospace and defence stock BAE Systems has swung to a half-year loss, but upped its dividend and said it expects good growth for the full year. The defence firm made a loss of £70m in the six month ended 30 June compared with a profit of £599m last time.Miner Kazakhmys said given the progress made in reducing stockpiles, output is likely to be lower in the second half but it remains on track to meet our full year target. The shares move higher but are outpaced by sector peers Antofagasta, Rio Tinto, Xstrata, ENRC, Vedanta and Lonmin. The latter is boosted by an upgrade by Citigroup, which now rates the shares a "buy".Gas supplier Centrica retreats after posting a net profit of £534m for the first half of 2009, up from £418m a year earlier. The result was ahead of market expectations but the group warned that low commodity prices will continue to shift profit from the upstream to the downstream, resulting in a reduction in the group's operating profit. Knee and hip joint supplier Smith & Nephew posted a rise in second quarter profits but expects its products which serve the younger more active patient segment to face greater challenges.Tobacco firm British American hiked its dividend by a quarter as acquisitions continued to drive the firm's profits higher.Building materials supplier Travis Perkins posted a 27% drop in half year pre-tax profit but in recent months has seen evidence that some of its markets are beginning to stabilise. The shares motor forward on the trading statement, dragging sector peer Wolseley with them, even though the latter predicted on Monday that conditions will continue to deteriorate until the end of 2009.Among second-liners environmental consultancy RPS Group falls heavily after disappointing results. Profit before taxation and amortisation was virtually flat in the first half of 2009 at £29.2m compared to £28.5m a year earlier. National Express, which last week received a takeover approach from its main shareholder, has scrapped its interim dividend in a bid to reduce debt.Rail and bus group Go-Ahead has agreed to acquire the assets of East Thames Buses from Transport for London (TfL)for £5m.Northumbrian Water will raise its full-year dividend by 6% after increased water and sewerage charges helped the group maintain revenues at previous levels. The firm, which operates in the Northeast of England, has increased charges by 3%, in line with inflation. Total revenue for the year should be in line with last year, it added.Health and sensor group Halma said trading during the first quarter of the financial year has been in line with expectations. That was enough to spark a rise in the share price, however. Product margins remain strong across all three sectors of its business, the company said.Model trains and racing cars group Hornby said its businesses in the UK, mainland Europe and the USA have continued to experience good demand. Shares in chilled convenience food group Uniq fell sharply after losses for the half year widened as customers switched to cheaper alternatives.e2v technologies, the specialist developer and manufacturer of high technology components and sub-systems, is sharply lower after saying trading remains challenging. The company remains in discussions with financial advisors about he most appropriate long term capital structure for the group.Underwriter Novae Group is friendless after sliding into the red at the interim stage. Loss before tax and before foreign exchange movement on non-monetary items was £2.1m in the first half of 2009, compared to an interim profit of £16.8m the year before, after a charge of £26m from aviation reinsurance and credit insurance claims. The firm was involved in the insurance of the Air France airliner that crashed in the Atlantic Ocean. Nicola Horlick's bid vehicle, Petersfield Asset Management, has finally ended offer talks with Bramdean Alternatives, the fund management business she floated in 2007.