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LONDON (Alliance News) - Stocks in London picked up where they left off last week, starting Monday higher, with plastic products company RPC Group's shares rising after its adjusted profit outpaced forecasts for the first quarter of its financial year.
The FTSE 250-listed company said it saw good underlying organic growth in the first quarter to the end of June and said revenue was helped higher by the contribution from acquisitions it has made.
Adjusted operating profit for the year, in constant currencies, was ahead of RPC's expectations. This was thanks to the better sales volumes, the realisation of synergies from acquisitions, a reversal of the polymer price pressures seen a year earlier, and a better-than-anticipated contribution from Global Closure Systems, the French plastic closures and dispensing systems specialist it bought in December 2015.
RPC added its results benefited from the weakness in sterling against the euro and dollar, as 75% of its revenue is generated from outside the UK.
RPC shares traded up 2.5% early Monday.
The FTSE 100 was up 0.7%, or 45.97 points, at 6,636.51. It was a familiar picture in the blue-chip index, with investors picking up cheap banking and housebuilding stocks, sending them to the top of the gainers list. They were joined by miners.
The FTSE 250 was up 1.1% at 16,354.77 and the AIM All-Share up 0.4% at 708.34.
European stocks also were higher. The CAC 40 in Paris was up 1.1% and the DAX 30 in Frankfurt was up 1.4%.
In Asia, the Japanese Nikkei 225 index ended up 4.0% and the Shanghai Composite closed up 0.2%. The Hang Seng in Hong Kong was up 1.6%.
Broker rating changes were responsible for a number of the biggest movers on the London equity market. Drugmaker Hikma Pharmaceuticals was down 1.5% after HSBC cut it to Hold from Sell, while electricals retailer Dixons Carphone was down 0.5% after Barclays cut it to Equal Weight from Overweight.
In the FTSE 250, engineers IMI, down 1.5%, and Spirax-Sarco Engineering, down 1.2%, were the worst mid-cap performers after both stocks were downgraded by UBS. IMI was cut to Sell from Neutral, while Spirax was cut to Neutral from Buy.
Rolls-Royce Holdings said it has agreed to acquire the other 53.1% stake in Spanish aerospace components firm Industria de Turbo Propulsores it does not already own for EUR720.0 million.
Rolls-Royce will acquire the stake from SENER Grupo de Ingeniería and said the deal will strengthen its position on large engine programmes in its civil aerospace operations by growing aftermarket revenue. In addition, it will boost the group's defence aerospace business.
Industria de Turbo Propulsores, or ITP, is based in Bilbao, Spain and design and manufacturers aerospace components. In 2015, it made a pretax profit of EUR59.0 million on revenue of EUR710.0 million. The stock was down 1.3%.
Sound Energy was one of the best performers in the AIM All-Share, up 17%. The company said the first well that was drilled on the Tendrara licence onshore Morocco has flowed gas at a higher-than-expected rate despite only accessing a small proportion of the reservoir.
The TE-6 well was drilled in early June and encountered 28.0 metres of net gas pay in the TAGI reservoir, but operations are ongoing and the full results are expected to be released "later this month".
"The company confirms that rig-less operations continue and that the results are already significantly above company expectations as a significant stable flow has already been achieved, despite only having accessed so far 18% of the total reservoir and no stimulation having yet been performed," said Sound.
There is very little in the international economic calendar, with of note only Italian industrial output at 0900 BST and US labor market conditions index at 1500 BST.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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