LONDON (Alliance News) - London stocks were trading higher Wednesday, with the mining sector rebounding from heavy falls on Tuesday, while Ashtead Group led the blue-chip gainers after it said its full-year results should beat its previous expectations.
The industrial equipment rental company traded up 7.5% soon after the open as it said its pretax profit and revenue both surged in the first half with good performances from its US and UK divisions, prompting a 33% hike to its interim dividend and the company to say its full-year results should beat its previous expectations.
The company said its pretax profit for the half to the end of October rose to GBP176.5 million from GBP141.7 million a year earlier, as total revenue rose to GBP648.9 million from GBP529.4 million.
Ashtead's underlying, constant currency rental revenue grew 17% in the first half, driven by a further strong performance from its Sunbelt unit in the US, where rental revenue increased 22%, despite the group facing some challenge from the slowdown in oil and gas markets, which will continue into the third quarter.
The FTSE 100 index traded up 0.4% at 6,160.57, the mid-cap FTSE 250 was up 0.2% at 17,222.98 and the AIM All-Share traded up 0.3% to 738.89.
In Europe, the French CAC 40 index was up 0.5% and the DAX 30 in Frankfurt was up 0.3%.
Asian stock markets ended largely lower. The Nikkei 225 index closed down 1.0% and the Hang Seng down 0.5%, while the Shanghai Composite added 0.1%.
FTSE 100 miners were amongst the best performers in the FTSE 100 index after seeing a heavy fall on Tuesday. London's FTSE 350 mining sector index fell to its lowest level since August 2004 on Tuesday partially due to Anglo American's announcement of a radical restructuring plan and suspension of its dividend and partially because of lower commodity prices.
Anglo American closed down 12% on Tuesday, and hit an all time low, as the market reacted badly to its announcements. Early Wednesday, the stock was seeing some support, trading up 2.1%. Fellow miners also ended lower on Tuesday, but at the open BHP Billiton traded up 3.6%, Rio Tinto was up 3.5% and Glencore was up 1.9%.
Stagecoach Group was by some distance the worst performer in the FTSE 250, down 14%. The transport operator said its pretax profit dipped in the first half despite higher revenue, and it issued a cautious outlook for the second half, downgrading its full-year guidance.
The company said its pretax profit for the half to the end of October fell to GBP90.8 million from GBP98.3 million, mainly due to higher one-off financing charges in the half. Stripping out the one-offs, pretax profit rose to GBP121.5 million from GBP108.6 million.
However, the company said it is cautious on its outlook for the second half, with recent revenue from its regional bus business in the UK coming in softer than expected and as rail and inter-city coach revenue growth slowed in the UK and Europe since mid-November. This has resulted in Stagecoach "modestly" downgrading its adjusted earnings per share guidance for the full year.
Entertainment One was the best performer in the midcap index, up 9.3% at 153.30 pence. The media company noted the recent fall in its share price, and confirmed that it continues to trade in line with its full year underlying earnings expectations.
Shares in the stock have drifted steadily downwards this week, and closed at 140.90p Tuesday, down 32% from its closing price of 206.50p last Friday.
Entertainment One reiterated confidence in its target of doubling the size of its business by 2020 through "strong organic growth" and carefully targeted acquisitions.
The stock was also benefiting from an upgrade by Peel Hunt to Buy from Reduce.
Construction and support services company Carillion traded up 5.7% after it said it remains on track to meet its expectations for 2015 and said it has secured around GBP1.0 billion in new business.
The group said its revenue and operating profit growth should hit its expectations for the full year, with secured orders and probable orders for the year expected to remain strong at around GBP17.0 billion at year end, down slightly from GBP18.6 billion at the same point a year ago.
Carillion said it has a high level of revenue visibility going into 2016 at around 80% and said its total pipeline of contract opportunities has increased to more than GBP41.0 billion.
US IT and professional services company Computer Sciences Corp said it has agreed a deal to acquire business processing, procurement and technology services provider Xchanging, trumping the previous offer agreed with FTSE 100-listed outsourcer Capita.
CSC will pay 190.00 pence per share for Xchanging, a 19% premium to the 160.00 pence per share offer Capita made for the company. The offer also represents a 72% premium to Xchanging's closing share price on October 2, when talks with potential suitors started, and an 81% premium to its average closing price for the three months leading up to that date.
In total, it values Xchanging at GBP488.0 million. Xchanging traded up 8.7% at 191.00p, while Capita was up 0.4%.
In the economic calendar, there are US MBA mortgage applications at 1200 GMT, wholesale inventories at 1330 GMT and the Energy Information Administration's crude oil stock at 1430 GMT.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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