LONDON MARKET OPEN: Coca Cola HBC, Standard Life Gain In Mixed Market

LONDON (Alliance News) - Stocks in the UK were mixed soon after the open, with Coca Cola HBC and Standard Life leading the gainers in the FTSE 100 after providing solid sets of 2015 results, while UK retail sales data, due at 0930 GMT, is the day's next focus.

The FTSE 100 index was flat at 5,971.21 points, the FTSE 250 down 0.1% at 16,153.21, and the AIM All-Share up 0.1% at 683.06. In Europe, the CAC 40 in Paris was up 0.3% and the DAX 30 in Frankfurt down 0.2%.

Coca-Cola HBC was up 5.0% after it reported growth in profit in 2015. Volumes increased in all of the markets in which it operates, but revenue continued to be hit by unfavourable movements in foreign exchange rates.

The soft drinks bottling company made a pretax profit of EUR357.1 million in 2015, up from EUR352.0 million in 2014, despite net sales revenue slipping to EUR6.35 billion from EUR6.51 billion.

Coca Cola will pay a dividend of EUR0.40 per share, which is an 11% increase on 2014.

Shore Capital said the results were ahead of the broker's own expectations and consensus. Shore kept a Hold stance on the stock.

Standard Life was up 1.2% after it reported higher operating profit before tax in 2015, as stronger fee-based revenue more than offset a fall in spread/risk margin business.

The Edinburgh-based firm, which provides pensions, savings, insurance and investments products, said operating profit before tax from continuing operations amounted to GBP665 million in 2015, up from GBP608 million in 2014, and ahead of analyst forecasts of GBP616 million.

The FTSE 100 constituent lifted its dividend for the year as a whole to 18.36 pence per share from 17.03p. Analysts had forecast an annual dividend of 18.32p.

Commodity stocks also were higher, recovering from losses on Thursday. Among oil stocks BP was up 0.9%, while Royal Dutch Shell 'A' and 'B' shares were up 0.7% and 0.6%, respectively. Among miners, Anglo American was up 2.2%, Rio Tinto up 1.0% and Fresnillo up 0.7%.

In the FTSE 250, plastic and fibre products company Essentra was the top mid-cap performer, up 10%. The company said its pretax profit was dragged lower by higher one-off, acquisition-related costs in 2015 and by the tough oil and gas environment, as its other divisions all performed well.

Essentra said its pretax profit for the year to the end of December fell to GBP90.4 million from GBP99.7 million, primarily due to one-off write-offs which hit its operating margin. These mostly related to the acquisition of Clondalkin Packaging and subsequent site rationalisation measures.

Essentra will pay a final dividend of 14.4 pence per share, up from 12.6p a year earlier, pushing its total dividend for the year up to 20.7p, up 13%.

At the bottom of the mid-cap index was Millennium & Copthorne Hotels, down 6.9%. The company slashed its dividend for 2015 after suffering a drop in profit, despite revenue benefiting from favourable movements in foreign exchange rates.

The hotel operator reported a 42% drop in pretax profit to GBP109 million in 2015 from GBP188 million in 2014, despite revenue growing 2.5% to GBP847 million from GBP826 million, leading it to slash its total dividend to 6.42 pence from 13.59p. In the fourth quarter, pretax profit fell by a huge 86% to GBP11 million from GBP80 million, as revenue rose 1.3% to GBP232 million from GBP229 million.

Millennium & Copthorne said the fall in profit was because of a GBP43 million net charge as a GBP33 million net revaluation gain on investment properties failed to fully offset a GBP76 million impairment loss. The company had warned last Friday it would be making the charge.

However, even without the charge, pretax profit still would have declined by 5.6% to GBP152 million from GBP161 million.

In the economic calendar Friday, alongside UK retail sales data, UK public sector net borrowing data also are due at 0930 GMT. The UK Conference Board leading economic index is due at 1430 GMT, while eurozone's consumer confidence is at 1500 GMT. In the US, inflation data are due at 1330 GMT.

Oanda analyst Craig Erlam expects UK retail sales to have rebounded by 0.8% month-on-month in January following a "disappointing" 1.0% decrease in December. On a yearly basis, retail sales are expected to rise by 3.6% following an increase of 2.6% in December.

Retail sales excluding fuel are expected to rise by 0.7% month-on-month in January, following a 0.9% decline last month, while year-on-year they are expected to increase by 3.5% following a 2.1% rise in December.

"Core retail sales have broadly been in decline over the last year, which is worrying given that the recovery has primarily been built on the consumer. That said, a strong rebound in January will hopefully indicate that the consumer isn't done yet," noted Erlam.

Germany's producer prices declined at a faster-than-expected pace in January, figures from Destatis showed. The producer price index slid 2.4% year-over-year in January, exceeding economists' expectations for a 2.0% drop. It was slightly smaller than the 2.3% fall in December. German producer prices have been falling since August 2013.

In China on Friday, the Shanghai Composite closed down 0.1%, while the Hang Seng index in Hong Kong ended down 0.4%. The Japanese Nikkei 225 index closed down 1.4%.

Japan's all industry activity decreased for the second straight month in December, and at a faster-than-expected pace, figures from the Ministry of Economy, Trade and Industry showed.

The all industry activity index slid a seasonally adjusted 0.9% month-over-month in December, exceeding economists' expectations for a 0.3% drop. In November, the measure had fallen 1.1%, which was revised from a 1.1% decline reported earlier.

Wall Street ended lower Thursday, with the DJIA down 0.3%, the S&P 500 down 0.5% and the Nasdaq Composite down 1.0%.

By Daniel Ruiz; danielruiz@alliancenews.com

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