(Alliance News) - Stock prices opened slightly higher on Thursday on a busy day for UK company news, as DS Smith and Rolls-Royce bookended the FTSE 100.
The UK flagship stock index was up 16.57 points, or 0.2%, at 7,353.62 early Thursday. The mid-cap FTSE 250 index was up 0.2% at 23,265.70. The AIM All-Share index was flat at 1,200.09.
The Cboe UK 100 index was up 0.1% at 728.46. The Cboe 250 was up 0.1% at 20,656.84, and the Cboe Small Companies was down 0.1% at 15,057.48.
In mainland Europe, the CAC 40 stock index in Paris was up 0.1%, while the DAX 40 in Frankfurt was up 0.1%.
In the FTSE 100, DS Smith was the best performer, up 3.0%, after the packaging firm said pretax profit and revenue rose in the first half of financial 2022.
For the six months to October 31, revenue rose to GBP3.4 billion from GBP2.9 billion last year and pretax profit increased to GBP177 million from GBP120 million.
DS Smith declared an interim dividend of 4.8 pence a share, up 20% from 4.0p a year prior.
Fellow paper and packaging firms Mondi and Smurfit Kappa were up 0.9% and 1.0% respectively in a positive read-across.
Polymetal International was up 1.5% after Morgan Stanley raised the Russian gold miner to Overweight from Equal Weight.
At the other end of the large-caps, Rolls-Royce was the worst performer, down 2.7%. The jet engine maker said it expects its 2021 cash outflow to be better than forecast.
The London-based firm said the gradual recovery in international flying alongside a market recovery in the Power Systems unit and resilience in the Defence arm were driving improvements in trading. In addition, its restructuring programme, launched in May 2020, is delivering sustainable cost savings more quickly than initially anticipated.
This leaves the company well-placed to meet the GBP1.3 billion savings target set for the end of 2022, it said. Rolls-Royce said the improved trading performance drove a return to positive free cash flow in the third quarter and reduced the outflow expected in the second half.
In addition, around GBP300 million of original equipment concession outflows, originally expected in 2021, are now expected to fall in 2022 due to delayed delivery of aircraft for which it has already supplied engines.
As such, Rolls-Royce's free cash outflow in 2021 is expected to be better than the GBP2 billion previously guided.
"Rolls-Royce has taken significant steps in the last 12 months to reduce head count and cut costs and reiterated this morning it was on course with a further GBP1.3 billion of annualised cost," explained CMC Markets analyst Michael Hewson.
"While all of this is welcome, the reality remains that the business is still heavily reliant for a good proportion of its annual revenue on civil aviation engine flying hours, and while these have been improving, with the return of transatlantic travel also helping, the company is still set to fall short of its full year target of 55% of 2019 levels for 2021."
In the FTSE 250, Moonpig was the best performer, up 6.2%. The online greeting card retailer said profit and revenue declined in the recent half year but still was well above two years ago.
Pretax profit in the six months that ended October 31 was GBP18.7 million, down from GBP33.0 million a year ago but doubled from GBP9.4 million in 2019. Revenue fell to GBP142.6 million from GBP155.9 million year-on-year but was up from GBP66.3 million two year ago.
Moonpig said it is retaining customers acquired during the Covid-19 lockdown, with 89% of revenue being received from existing customers.
Elsewhere in London, Go-Ahead Group was down 15%. The transport operator apologised to the UK government after admitting to errors and failings in the way it ran the Southeastern rail franchise.
The Newcastle upon Tyne-based firm said the review of London & South Eastern Railway franchise with the UK government found that "serious errors" were made by LSER in its dealings with the Department for Transport over several years.
Go-Ahead said it has accepted that by "failing to notify the DfT of certain overpayments or monies due to the DfT, LSER breached contractual obligations of good faith contained in the franchise agreements." As a result, the company has apologised to the DfT.
The government department is considering enforcement action, Go-Ahead said, including a financial penalty.
The Japanese Nikkei 225 index closed down 0.5% on Thursday. In China, the Shanghai Composite ended up 1.0%, while the Hang Seng index in Hong Kong finished up 1.1%. The S&P/ASX 200 in Sydney closed down 0.3%.
The pound was quoted at USD1.3203 early Thursday, down from USD1.3236 at the London equities close Wednesday.
The euro was priced at USD1.1323, lower from USD1.1332. Against the Japanese yen, the dollar was trading at JPY113.41, down from JPY113.83.
Brent oil was quoted at USD76.05 a barrel on Thursday morning, up from USD75.86 Wednesday evening, Gold stood at USD1,786.14 an ounce, firm against USD1,782.70.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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