Cobham Share News (COB)

LONDON (Alliance News) - UK stocks ended mixed Thursday, with motor insurer Admiral Group and buildings materials group CRH firmly in the green but coffee chain owner Whitbread and satellite communications company Inmarsat flashing red.

The FTSE 100 closed down 0.3%, or 16.60 points, at 6,130.46. The blue-chip index ended down for a second consecutive session, after the slight buying interest seen around midday evaporating following a weak set of US economic data.

The FTSE 250 closed up 0.1%, or 16.67 points, at 16,745.64, and the AIM All-Share ended roughly flat, down 0.17 point at 696.61. In Europe, the CAC 40 index in Paris was down 0.2% and the DAX 30 in Frankfurt down 0.3%

Shares in Admiral ended up 7.4%. The company declared 2015 "the year of the uncut diamond", as it lifted its dividend and reported higher profit.

Pretax profit rose to GBP368.7 million in 2015, from GBP350.7 million the prior year, as net revenue increased to GBP904.8 million from GBP884.6 million and total expenses fell to GBP525.0 million from GBP529.3 million. Adjusted to exclude minority interests, pretax profit rose to GBP377.0 million from GBP357.0 million, beating analysts expectations of GBP350.4 million.

"I would describe 2015 as: the year of the uncut diamond. When the year started many people thought it would turn out to be a lump of coal. But no, 2015 was no lumpy coal year," Chief Executive Officer Henry Engelhardt said.

The result was driven by the group's UK car insurance business, which saw its pretax profit rise to GBP443.0 million from GBP398.0 million, supported by the turn of the notoriously competitive UK motor insurance market. The improved profit from Admiral's main business supported increased investment in its international car insurance and price comparison businesses, in particular in the US.

CRH shares rose 4.6%, as it posted higher pretax profit and revenue for 2015, driven by acquisitions it made and a robust US market. CRH said its pretax profit for the year to the end of December was EUR1.03 billion, up from EUR761.0 million a year earlier, while revenue rose 25% to EUR23.64 billion from EUR18.91 billion thanks to the significant volume of acquisitions made in the year.

The group benefited in part from the positive translation effect of the strong dollar on its results, as US sales increased thanks to more normal weather patterns at the start of 2015 than a year earlier and from the continued positive momentum in the US construction industry. CRH said it will pay a flat 44.0 cents final dividend, leaving its total dividend flat at 62.5 cents.

Meanwhile, Travis Perkins closed up 3.3% after the builders' merchant expressed confidence on its outlook, even as a tough repair, maintenance and improvement market in the UK dragged on its 2015 profit. The group said pretax profit for the year to the end of December was GBP224.0 million, sinking 30% from the GBP321.0 million posted in 2014.

At the other end of the index, Whitbread ended down 6.2%. Analysts were disappointed by the group's slowing, below-consensus like-for-like sales growth in the 11 weeks to February 11. The group said total sales in the 11-week period grew 7.7%, while like-for-like sales increased by 1.7%. This slowed from 3.5% increase in like-for-like sales and a 10.4% rise in total sales reported for the 13 weeks to November 26.

The growth was below Shore Capital's estimate for like-for-like sales growth of between 2.0% and 2.5%. Shore said that, while the update was likely to be taken negatively by the market, particularly the Costa coffee performance, the broker believes the hotels division is undervalued. Shore maintained its Buy rating.

Shares in Inmarsat also lost altitude, falling 4.2% after it reported 2015 results that underwhelmed analysts, and although it forecast revenue growth in the years ahead, it also outlined higher-than-expected spending over the next three years.

Inmarsat reported pretax profit of USD338.0 million for 2015, down slightly from USD342.3 million in 2014, as revenue slipped a little to USD1.27 billion from USD1.29 billion. On an adjusted basis, stripping out USD10.8 million in revenue in 2014 from energy-related assets that were sold, revenue was mostly flat.

Fourth quarter revenue, excluding deferred revenues from troubled customer LightSquared, came in at USD299.1 million, down from USD314.5 million in the corresponding period in 2014. It was 4.1% below Nomura's forecast, and below consensus at USD315.00 million.

In the FTSE 250, Aggreko led mid-cap gainers, up 10%, even though the temporary power company said its profit and revenue dipped in 2015 as it took a hit from the low oil price, a price reduction on a contract extension in Bangladesh, and slower payments in Venezuela and Yemen.

Aggreko said its pretax profit fell to GBP226.0 million in 2015 from GBP289.0 million in 2014, in line with its expectations as it took a hit from lower demand from the oil and gas industry and pricing pressures which drove its trading margin down to 16% from 19%.

Meanwhlle, Cobham closed at the tail end of the mid-cap index, down 7.6%. The aerospace group increased its dividend in 2015 after reporting robust underlying results, but a pretax loss for the year after booking impairments and restructuring charges. Cobham recorded a pretax loss of GBP39.8 million in 2015, swinging from a GBP24.3 million profit in 2014, despite experiencing a 12% lift in revenue to GBP2.07 billion from GBP1.85 billion and improving its trading margin.

With the FTSE 100 having briefly posted gains around lunchtime in London, investor confidence was tackled by a not-especially-great set of US data in the afternoon.

US Labor Department showed that first-time claims for US unemployment benefits unexpectedly increased in the week ended February 26. The report said initial jobless claims rose to 278,000, an increase of 6,000 from the previous week's unrevised level of 272,000. The modest increase in jobless claims came as a surprise to economists, who had expected claims to edge down to 270,000.

Labor productivity in the US fell, although less than economists estimated in the fourth quarter of 2015, the US Labor Department said. The report said productivity fell by 2.2% in the fourth quarter compared to the previously reported 3.0% decrease. Productivity had been expected to be revised to show a steeper 3.2% drop.

Investors will keep a close eye Friday on US nonfarm payrolls data, due at 1330 GMT.

There also were weak US factory orders figures Thursday, as well as service Purchasing Manager's Index readings from Markit and the Institute for Supply Management.

The US Commerce Department said factory orders climbed by 1.6% in January after tumbling by 2.9% in December, but missed economist estimates for an increase of 2.0%.

Activity in the US service sector grew at a slightly slower rate in February, the ISM said. The report said its non-manufacturing index edged down to 53.4 in February from 53.5 in January, although a reading above 50 indicates continued growth in the service sector. Economists had expected the index to dip to 53.1.

Meanwhile, final reading from Markit's service PMI from the US showed the index retreat to 49.7 from a previous reading of 49.8, the same score economists were expecting.

Stocks in New York opened higher but fell into the red shortly afterwards. At the London equities close, the Dow Industrials was down 0.4%, the S&P 500 also down 0.4%, and the Nasdaq Composite down 0.6%.

The pound recovered some ground against the dollar, with sterling quoted at USD1.4169 at the London equities close, compared to USD1.4055 at the close Wednesday.

However, there were weak services data from the UK as Markit showed that the country's services sector expanded at the weakest pace in nearly three years in February.

The Chartered Institute of Procurement & Supply/Markit services PMI dropped to 52.7 in February from 55.6 in the previous month. Economists had expected the index to fall slightly to 55.1. However, any reading above 50 still indicates expansion in the sector.

Meanwhile, eurozone private sector growth eased to a 13-month low in February but the slowdown was less severe than initially estimated, final data from Markit showed. The composite output PMI slid to 53.0 in February from 53.6 in January. This was the lowest score since January 2015 but slightly above the flash score of 52.7. Similarly, the services PMI dropped to 53.3 from 53.6 in January.

The euro strengthened against the greenback, with the single-currency quoted at USD1.0944 at the close, having stood at USD1.0831.

Brent was quoted at USD36.95 a barrel at the London equities close, slightly above the USD37.17 a barrel at the close Wednesday, while gold was at USD1,257.30 an ounce an ounce, compared to USD1,237.02 late Wednesday.

In the economic calendar Friday, UK consumer inflation expectations are due at 0930 GMT. In the US, alongside the unemployment report at 1330 GMT is the US trade balance. The Baker Hughes US oil rig count is due at 1800 GMT.

In the UK corporate calendar, WPP and London Stock Exchange Group issue full-year results, while easyJet publishes its February traffic statistics. Capital & Regional, Pacific Horizon, Industrial Multi Property Trust, Lookers, Independent News & Media, Oxford Pharmascience, and Alliance Trust issue full-year results.

By Daniel Ruiz; danielruiz@alliancenews.com

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