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LONDON (Alliance News) - Stock prices in London were up soon after the open Wednesday, with higher oil prices boosting sentiment, but shares in Marks & Spencer was missing out despite the retailer increasing its dividend, including a special dividend, as it reported a fall in annual profit.
The FTSE 100 was up 0.7%, or 42.49 points, at 6,261.75. The FTSE 250 was up 0.5% at 17,215.25 and the AIM All-Share was up 0.1% at 734.10.
M&S was the worst blue-chip performer, down 7.0%. The company said it continued to outperform in food, but that clothing and homeware sales fared less well. New Chief Executive Steve Rowe said he will focus on bringing the retailer's struggling clothing and homewares division back to growth.
Pretax profit in the year ended April 2 fell to GBP488.8 million from GBP600.0 million the year before, despite revenue rising slightly to GBP10.56 billion from GBP10.31 billion. Pretax profit was hit by increased charges and non-underlying costs. Underlying pretax profit, which excludes these, grew to GBP689.6 million from GBP661.2 million.
M&S will pay total dividend of 18.7 pence, which is up 3.9% on the prior year, and a special dividend of 4.6p for the first half of the new financial year.
Intertek also was in the red, down 3.2%. The testing, inspection and certification group said it achieved good revenue growth in the first four months of 2016, though its resource industry-facing businesses continued to see challenging market conditions.
The company said group revenue for the four months to the end of April was GBP774.0 million, up 13% year-on-year and growing 11% in constant currencies. Organic revenue, stripping out acquisition contributions, grew 2.3% in the period, while constant currency growth was 0.5%.
Meanwhile, HSBC Holdings was the best blue-chip performer, up 1.9%. The lender said it will issue USD2.0 billion in contingent convertible securities, so-call CoCos. HSBC said it will issue 6.875% perpetual subordinated contingent convertible securities on June 1, callable in June 2021 and every five years thereafter. The bank said it intends to use the proceeds for general corporate purposes and to strengthen its capital base.
Royal Mail also was among the best blue-chip performers, up 1.3%, after UK media and communications regulator Ofcom said it will not impose new price controls on the postal and logistics operator and will leave the current regulatory framework intact.
Ofcom said that, given the declining letters market in the UK and increased competition in the parcels market, it has not proposed any new price controls on wholesale or retail products sold by Royal Mail. The regulator added it intends to leave in place the framework introduced on Royal Mail in 2012, which provided it with greater commercial freedom. This includes a safeguard cap placed on stamp prices.
The only new rules the watchdog has proposed cover the access market, in which rival operators collect and sort mail before handing it to Royal Mail to complete delivery.
Mediclinic International was up 1.2%, after saying it had traded in line with its expectations in its most recently ended financial year. The private healthcare group said its focus is now on the smooth integration of Al Noor Hospitals following the completion of its reverse takeover earlier this year.
Mediclinic reported a pretax profit of GBP245 million for the year to end-March, compared to a restated pretax profit of GBP266 million the previous year, on revenue of GBP2.11 billion, up from GBP1.98 billion. The figures compare the combined group with Mediclinic alone the previous year, translated into sterling.
Dixons Carphone was up 0.7%. The electronics and mobile phone retailer said it anticipates to report headline pretax profit at the upper end of its previous guidance in its recent financial year, following solid like-for-like revenue growth.
Dixons said headline pretax profit for the year to the end of April was between GBP445.0 million and GBP450.0 million, at the upper end of its previous guidance. Group like-for-like revenue for the recent year rose 5.0% and grew by the same percentage in the four quarter, Dixons Carphone said.
Oil prices rose after the American Petroleum Institute reported late Tuesday a drop of 5.1 million barrels of crude oil stocks, following a 1.1 million fall a week earlier. Brent was quoted at USD49.19 a barrel soon after the equities open in London, compared to USD48.75 at the close on Tuesday.
Meanwhile, West Texas Intermediate oil, the US benchmark, was at USD49.25 after the open, against USD48.57 at the close Tuesday.
In Asia on Wednesday, the Japanese Nikkei 225 index in Tokyo ended up 1.6%. In China, the Shanghai Composite finished down 0.2, while the Hang Seng index in Hong Kong is up 2.5%.
In Europe, the CAC 40 in Paris was up 0.5% and the DAX 30 up 0.8%.
In the economic calendar Wednesday, Germany's IFO business climate survey is due at 0900 BST. In the US, the goods trade balance is due at 1330 BST, while the US housing price index is at 1400 BST. Martkit's services and composite Purchasing Manager's Index readings are due at 1445 BST, while the EIA crude oil stocks data are at 1530 BST.
By Daniel Ruiz; danielruiz@alliancenews.com
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