LONDON (Alliance News) - London equity prices started lower Tuesday after yet another opinion poll on the UK's referendum on European Union membership showing the Leave campaign has the lead ahead of the vote next week.
Away from Brexit worries, specialist equipment rental company Ashtead Group said it will return GBP200.0 million to shareholders via a share buyback in the current financial year as it reported surging profit and revenue and a higher dividend for the year just ended.
The FTSE 100-listed company said pretax profit for the financial year to April 30 was GBP616.7 million, up 24% from the GBP473.8 million made a year earlier ,as Ashtead benefited from a rise in revenue to GBP2.55 billion from GBP2.04 billion.
Revenue was driven higher by the beneficial impact of the stronger dollar, given Ashtead's significant exposure to the US market through its Sunbelt division, and by robust markets throughout the year.
On the back of the strong results, Ashtead said it will start a GBP200.0 million share buyback in the 2017 financial year. This comes in addition to a final dividend of 18.5 pence, which means its total dividend payout for the year rises 48% to 22.5p from 15.25p the year before.
The stock was the best performer in the FTSE 100, up 2.3%.
The blue-chip index itself was down 0.6%, or 40.45 points, at 6,004.52. Amongst the worst performing large cap stocks were financial companies as bond yields continued to fall to new record lows - amid demand for safe-haven assets such as government debt - with the yield on the German 10-year bund moving below zero.
The FTSE 250 index was down 0.6% at 16,478.11 and the AIM All-Share down 0.3% at 728.04.
In mainland Europe, the French CAC 40 was down 1.4% and the German DAX 30 down 1.3%.
In Asia on Tuesday, the Japanese Nikkei 225 index ended down 1.0%, while the Shanghai Composite closed up 0.3% and the Heng Seng in Hong Kong is down 0.6%.
After the London equities market close on Monday, a pair of ICM polls for The Guardian - one telephone the other online - had Leave ahead by 53% to 47% if the "don't knows" are excluded. The referendum on the matter is set for Thursday next week. This echoed the findings of polls by YouGov and for the Bruges Group over the weekend.
Furthermore, the UK's most widely read newspaper, The Sun, committed its support to the Leave campaign.
"The Brexiters have begun to dominate the conversation at the key time, and as shown by the market reaction there is a genuine fear that Europe is on a collision course with history," said Connor Campbell, financial analyst at Spreadex.
Back on the London Stock Exchange, Premier Farnell's share price shot higher after it agreed to a takeover offer from Swiss manufacturing company Datwyler Holding, in an all-cash deal that values the London-listed company at GBP615 million.
Datwyler has agreed to buy the technology products distributor for 165 pence in cash per share, which represents an around 51% premium to Premier Farnell's closing share price of 109.3 pence on Monday. Early Tuesday, the stock was up 49% at 162.50p.
The directors of Premier Farnell have said they intend to unanimously recommend shareholders vote in favour of the deal. Datwyler has acceptances for its offer already representing 18.4% of Premier Farnell shares.
Go-Ahead Group was the biggest faller in the FTSE 250, down 10% as it affirmed its expectations for its full financial year, despite more difficult conditions for its bus operations in the fourth quarter and a hit to margins on its GTR rail contract.
The transport operator rail business has continued to perform well and it anticipates revenue growth of 5.1% for the Southeastern franchise, 11% for the London Midland franchise, and 3.1% for the GTR arm.
However, Go-Ahead said additional resources, which have been invested in the GTR franchise to improve the service, have depressed margins for the current financial year and will continue to have that effect in the next financial year.
Though Go-Ahead expects margins on the GTR franchise to improve in the longer term, margins on the contract are now expected to be around 1.5% over the life of the contract, compared to the 3.0% previously expected.
Fashion retailer Ted Baker, up 1.7%, reported growth in revenue in the 19 weeks to June 11 and said it is on track to meet the board's expectations for its full financial year to January 2017.
The company said group revenue in the recent 19 weeks rose by 11% year-on-year, with 13% growth in retail sales, 7.3% in wholesale sales and 32% in e-commerce sales.
In the economic calendar, UK inflation readings are due at 0930 BST, just before eurozone industrial production and employment change at 1000 BST.
The UK consumer price index is expected to rise 0.4% year-on-year in May following a 0.3% expansion in April.
Later are US retail sales at 1330 BST, business inventories at 1500 BST, and API crude oil stocks at 2130 BST. The Federal Open Market Committee begins its two-day US monetary policy setting meeting Tuesday, with its decision announced on Wednesday.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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