London’s FTSE 100 ticks 16.2 points higher to 7,333.5 on Thursday, building on yesterday's Brent Crude-led gains and at its best levels since the end of February.
Glasgow-headquartered pumps and valves play Weir (WEIR) races 5.6% higher to £22.36 as it reports continued strong momentum in the first quarter, with orders up 22% year-on-year. Investors also cheer the $1.285bn acquisition of US-based ESCO, a maker of mining equipment parts, with Weir also planning to sell its non-core Flow Control division.
Also in demand is Essentra (ESNT), bid up 4.3% to 450p as the FTSE 250 essential components distributor confirms its expectation of a return to like-for-like sales growth and margin expansion this year.
Ailing department stores Debenhams (DEB) slumps 10% lower to 20.96p on dire half year results and yet another round of downgrades to earnings guidance, which dent investors’ confidence in boss Sergio Bucher’s turnaround plan.
For the half to 3 March, like-for-like sales fell 2.2%, with trading hit by a disappointing Christmas followed by the UK’s big freeze. Debenhams’ profit before tax slumped 52% to £42.2m, the dividend is more than halved and Bucher now expects full year profit before tax to be at the lower end of the current £50m-to-£61m range. In a further blow, finance director Matt Smith is jumping ship and joining Selfridges.
Consumer goods giant Unilever (ULVR) gives up 92p to trade at £38.55, despite delivering in-line first quarter organic sales growth of 3.4%. Investors are shrugging off the news to focus on how Unilever is exchanging pricing power for volume growth, as well as the flat wider market growth of ‘around 3%’.
In possession of brands including PG Tips, Dove and Marmite, the good news is Unilever confirms 2018 guidance for 3-5% organic sales growth and an improvement in underlying operating margin and cash flow, in-line with management’s 2020 goals, and has also launched a new €6 billion share buy back scheme.
Ultra Electronics (ULE) is marked down 7.7% to £12.82 as the defence contractor says the UK Serious Fraud Office has opened a criminal investigation into ‘suspected corruption in the conduct of business’ by the company in Algeria.
Glasgow-headquartered software group Idox (IDOX:AIM) cheapens 4.8% to29p on a warning first half results are expected to be well below last year, reflecting restructuring-related disruption, changes in revenue recognition and the usual second half seasonal skew. While management seems confident full year results will meet market expectations, investors are clearly sceptical.
