A late move higher saw the FTSE 100 close Thursday’s session up 0.26% at 7,168.55 points, the blue chip benchmark taking its cue from a strong start on Wall Street where the S&P 500 rose 0.4% to 4,541.62 by 4.30pm UK time.
MELROSE ON THE MOVE
Engineering firm Melrose Industries (MRO) gained 7.1% to 184.1p to top the risers on the FTSE 100 after it confirmed alongside first half results it was ‘trading ahead of expectations, with better profit margins, better earnings per share and significantly lower net debt’.
The fall in borrowings underpinned plans for a further return of capital to shareholders in 2022. This follows the approved and imminent £730 million being paid out to shareholders from the proceeds of the £2.6 billion sale of Nortek Air Management.
The company, which specialises in buying and turning around industrial businesses and acquired GKN in a high-profile and controversial deal in 2018, reported a 5.6% year-on-year increase in adjusted revenue to £3.83 billion for the six months to 30 June 2021.
Adjusted profit after tax swung from a £80 million loss in 2020 to a £109 million profit. Free cash flow came in at £75 million.
Shares in trainers-to-tracksuits seller JD Sports Fashion (JD.) softened 4.5p to £10.36 after the retailer’s acquisition of Footasylum was provisionally prohibited again by the Competition and Markets Authority (CMA).
Having reassessed the merger, the CMA still argues JD Sports’ takeover of Footasylum ‘could lead to a worse deal for shoppers’, while JD Sports struggles to understand how the merger could substantially lessen competition in a market being shaped by the direct-to-consumer strategies of Nike and Adidas.
Housebuilder Barratt Developments (BDEV) announced a 65.1% increase in pre-tax profits to £812.2 million for the year to June 30. However, the shares were marked down 4.7% to 708p as the market focused on the rising costs and weakening demand which were highlighted by management.
Online broker CMC Markets (CMCX) was a victim of reduced market volatility. Shares in the group were marked down by 27% to 306.5p after the company reduced its profit guidance. CMC now expects full year 2022 operating income of between £250 million and £280 million compared to previous guidance of over £330 million.
OTHER RISERS AND FALLERS
Budget airline Jet2 (JET2:AIM) dipped 0.1% to £11.91 as it reported that since 19 July, when fully vaccinated UK holidaymakers have been able to travel without quarantine to amber list destinations, it has seen a programme at around 55% of pre-Covid summer 2019 capacity.
Digital auction marketplace Auction Technology (ATG) plunged 10% to £14.78 following the sale of a £189 million slug of stock by a pair of major shareholders.
Gulf Keystone Petroleum (GKP) shot up 14.8% to 178.2p after the company revealed the extent to which it is a beneficiary of higher oil prices, announcing a more than tripling of EBITDA for the six months ended 30 June, compared to that reported in the first half of 2020.
Shares in low cost, no contract gym operator Gym Group (GYM:AIM) gained 8.1% to 306p after reporting a resilient first half to 30 June and confirming stronger than expected post reopening trading.
Floorcoverings distributor Headlam (HEAD) softened 3.5% to 496p, robust first half results showing a strong sales recovery to 2019 levels providing a catalyst for profit-taking following a strong run.
‘As a consequence of this performance, along with balance sheet strength and confidence in the prospects for the business, we have returned to a normal dividend profile more rapidly than initially anticipated,’ said CEO Steve Wilson.
‘Notwithstanding the presence of some industry-wide and other Covid-19 related headwinds, we remain positive on prospects and look forward to our busiest trading months in the fourth quarter.’
