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(Alliance News) - Share prices in London opened higher on Tuesday with the FTSE 100 supported by positive updates from constituents Ferguson and Ashtead.
The UK flagship stock index was up 65.18 points, or 0.9%, at 7,297.46 early Tuesday. The mid-cap FTSE 250 index was up 201.46 points, or 0.9%, at 23,082.49. The AIM All-Share index was up 7.04 points, or 0.6%, at 1,187.07.
The Cboe UK 100 index was up 0.8% at 723.16. The Cboe 250 was up 0.7% at 20,516.84, and the Cboe Small Companies was flat at 14,918.48.
In mainland Europe, the CAC 40 stock index in Paris was up 1.2%, while the DAX 40 in Frankfurt was up 1.3%.
In the FTSE 100, Ferguson was the best performer, up 4.7%. The plumbing and heating products supplier said supportive end-markets and continued market share gains drove substantial sales growth during the first quarter of its financial year.
For the three months to October 31, net sales were USD6.80 billion, up from USD5.37 billion in the first quarter last year, and pretax profit rose to USD711 million from USD422 million.
Ferguson's US business grew net sales by 27% which comprised 25% organic growth and a further 1.9% from acquisitions. Price inflation was in the low teens during the quarter, it noted.
Ashtead was up 3.0% after the equipment rental firm raised its dividend following robust interim results.
For the six months to October 31, revenue increased by 19% to USD3.88 billion from USD3.26 billion last year and pretax profit jumped by 38% to USD889.8 million from USD645.8 million. In the US alone, revenue rose by 13% to USD3.12 billion from USD2.75 billion a year ago.
Ashtead declared an interim dividend of 12.5 US cents, up 28% from 9.76 cents paid last year.
NatWest Group was up 1.8% after Deutsche Bank upgraded the state-backed lender to Buy from Hold.
British American Tobacco rose 1.3%. The Dunhill and Lucky Strike cigarette maker said its performance was benefiting from strong momentum in New Categories which is now a "sizeable" contributor to revenue growth.
BAT highlighted it was making "excellent progress" towards its GBP5 billion revenue target for New Categories by 2025, supported by a clear focus on tobacco heating products.
Further, BAT maintained its 2021 guidance at mid-single-figure constant currency adjusted diluted earnings per share growth. BAT said this will allow it to absorb a GBP260 million profit hit from excise changes and competitive pricing in Australia and New Zealand, an increase from the GBP170 million profit hit guided at the interim results.
BAT said it expects annual revenue growth at constant currency to be above 5% and is confident in delivering on 2021 financial guidance.
Steve Clayton, manager of the HL Select funds said: "BAT is succeeding in migrating customers toward less harmful Vaping and Tobacco Heating Products, whilst still generating large amounts of free cash flow. With the balance sheet looking less stretched, now that BAT have absorbed the acquisition of Reynolds, BAT can start deploying that excess cash flow in shareholders direction. The low multiples on which tobacco shares trade mean that buy-backs will be highly earnings accretive.
"That raises the prospect of faster dividend growth in years ahead. With the market newly reassured that trading is normalising after the interruptions posed by the pandemic, we think BAT's income attractions are becoming harder and harder to ignore."
At the other end of the large-caps, AstraZeneca was the worst performer, down 1.5%, after Jefferies downgraded the Anglo-Swedish drugmaker to Hold from Buy.
In the FTSE 250, Liontrust Asset Management was up 2.0% after the fund manager said it has agreed to buy peer Majedie Asset Management for up to GBP120 million in cash and shares.
Majedie Investments, which has a 17.6% stake in its namesake investment manager, was up 3.5%.
Liontrust said the acquisition of Majedie will add GBP5.8 billion in assets under management and advice, raising its total to more than GBP42.3 billion. It said the purchase will be earnings enhancing for adjusted diluted earnings per share, starting from the financial year ending March 2023.
Liontrust will issue up to GBP97.0 million in new shares, plus pay up to GBP23.0 million in cash, to buy Majedie.
Majedie Chief Executive Officer Rob Harris will join Liontrust as head of Global Institutional Business.
The Japanese Nikkei 225 index closed up 1.9% on Tuesday. In China, the Shanghai Composite ended up 0.2%, while the Hang Seng index in Hong Kong finished up 2.7%. The S&P/ASX 200 in Sydney closed up 1.0%.
The pound was quoted at USD1.3288 early Tuesday, up from USD1.3253 at the London equities close Monday.
The euro was priced at USD1.1291, higher against USD1.1278. Against the Japanese yen, the dollar was trading at JPY113.70, up from JPY113.46.
Brent oil was quoted at USD74.25 a barrel Tuesday morning, up sharply from USD71.92 late Monday. Gold stood at USD1,782.75 an ounce, firm from USD1,780.00.
The international economic calendar on Tuesday has the Germany ZEW indicator and eurozone GDP at 1000 GMT and US trade data at 1330 GMT.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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