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LONDON (Alliance News) - Stocks in the UK opened mixed but then swiftly turned higher Tuesday, on a busy day of UK corporate news, which has seen shares in London Stock Exchange Group rise amid bid interest from the US and those of Barclays sink.
The bank confirmed it will sell down its 62.3% stake in its African subsidiary, amid a broader strategic update that will see the bank pay a reduced dividend in 2016 and 2017.
Jes Staley, the bank's new chief executive, said there is more work to do to restructure the bank in 2016. He set out plans to focus the group on two "sibling" divisions, which he identified as Barclays UK and Barclays Corporate & International, the latter of which includes its investment bank. The UK arm will become Barclays' UK ring-fenced bank by 2019, focused on retail banking.
Barclays maintained its dividend for 2015 at 6.5 pence per share, but said it will cut the payment to 3.0p in 2016 and 2017. Together with the selling down its stake in Barclays Africa Group, the reduced dividend will help bolster the group's common equity tier one ratio, a key measure of financial strength.
Shares in Barclays were down 7.4%, making it the second worst performer in the FTSE 100, surpassed only by Ashtead Group, which traded down 8.7%.
The equipment rental company said pretax profit and revenue grew significantly in the third quarter as it continues to benefit from a strong US market, but the pace of growth slowed slightly.
The FTSE 100-listed group said its pretax profit for the three months to the end of December was GBP139.1 million, up 17% year-on-year from the GBP113.9 million it posted in 2014. For the first nine months of the financial year, pretax profit grew 20% to GBP481.8 million from GBP379.4 million.
London Stock Exchange Group shares led the gainers in the FTSE 100, up 7.2%, after Intercontinental Exchange, the owner of the New York Stock Exchange and Euronext, said it is considering a takeover offer for the UK-based bourse operator.
While no approach has been made to the target's board, an offer from ICE could threaten talks between LSE Group and Germany's Deutsche Boerse to create a European challenger to US and Asian rivals.
"No approach has been made to the board of LSEG, and no decision has yet been made as to whether to pursue such an offer. There can be no certainty that any offer will be made, nor as to the terms on which any offer will be made. A further announcement will be made as appropriate," ICE said, confirming a report by Bloomberg News.
The FTSE 100 reversed a lower open to trade up 0.4%, or 22.45 points, at 6,119.54.
The FTSE 250 index was up 0.6% at 16,696.57 and the AIM All-Share was up 0.4% at 695.80. In Europe, the CAC 40 in Paris was up 0.2% and the DAX 30 in Frankfurt up 0.7%.
Asian stocks on Tuesday were reacting to the Chinese required reserve ratio cut on Monday. The Japanese Nikkei 225 index closed up 0.4%, the Shanghai Composite ended up 1.7%, and the Hang Seng finished up 1.6%.
In the FTSE 250, shares in Rotork soared 10% after the actuators manufacturer expressed confidence in its medium-term outlook and its cost-cutting measures, as it delivered an expected fall in pretax profit and revenue for 2015, hit by its exposure to the struggling oil and gas industry.
The company said its pretax profit for the year to the end of December fell 28% to GBP101.9 million from GBP141.2 million in 2014, while revenue dropped to GBP546.5 million from GBP157.2 million, a 21% fall.
Rotork said the results were in line with the guidance provided in its trading updates in September and November and said orders from the oil market have remained weak. The group is seeking to cut costs and said the actions taken so far will deliver higher-than-anticipated annual savings.
Just Eat reported a fall in profit in 2015 as an exceptional gain in the prior year was not repeated, but revenue grew on a rise in active users and order volumes.
The online takeaway delivery service said its pretax profit in 2015 fell to GBP34.6 million from GBP57.4 million in 2014, even though revenue grew by more than half to GBP247.6 million from GBP157.0 million.
Just Eat said revenue was boosted by a 65% increase in active users to 13.4 million from 8.1 million, and a 57% rise in order volumes to 96.2 million from 61.2 million, led by a shift towards mobile transactions.
The stock was one of the best performers in the FTSE 250, up 5.2%.
Greggs shares were also performing well, up 4.6% after the bakery and food-to-go retailer reported growth in profit in its recently-ended financial year as revenue was boosted by an increase in customer visits and average transaction values.
The company said its pretax profit in the year ended January 2 grew to GBP73.0 million from GBP49.7 million the prior year, as revenue rose to GBP835.7 million from GBP806.1 million.
Greggs said market conditions continued to be favourable during 2015, with low inflation leading to further rises in real disposable consumer income. As a result, the business saw strong growth throughout the year, although customer footfall in some shopping locations was subdued in the final quarter.
In the economic calendar, there are a number of Markit manufacturing PMI readings, with France at 0850 GMT, Germany at 0855 GMT, the eurozone as a whole at 0900 GMT, the UK at 0930 GMT and the US at 1445 GMT.
Also in Europe is unemployment data from Germany at 0855 GMT and for the eurozone at 1000 GMT. Later in the day is the ISM manufacturing PMI for the US at 1500 GMT.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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