LONDON MARKET OPEN: Experian Trades Up On Organic Revenue Guidance

LONDON (Alliance News) - Stocks have open higher in London Tuesday, recovering some of the losses made on Monday, with Experian leading blue-chip gainers in early trade.

The information services company was trading up 3.4% as it said foreign exchange will continue to exert an unwelcome pressure on the business at the full year, but it expects to see organic revenue growth at constant currency.

Experian said that, as well as organic revenue growth in the mid-single digit range, it anticipates "stable" margins and further progress in its closely-watched benchmark earnings per share in its full 2016 financial year, all at constant currency.

The guidance came as Experian reported that pretax profit fell to USD458.0 million in the six months to September 30 from USD534.0 million in the corresponding half the prior year. Benchmark earnings per share amounted to 42.0 US cents, up 5% at constant exchange rates and down 7% at actual exchange rates.

The FTSE 100 index traded up 0.2% at 6,306.67 points, the FTSE 250 was down 0.1% at 17,097.60 and the AIM All-Share was up 0.1% at 745.07.

In Europe, the French CAC 40 traded up 0.3% and the German DAX 30 was up 0.1%.

In Asia, the Nikkei 225 index in Tokyo closed up 0.2%, while the Hang Seng in Hong Kong ended down 1.5% and the Shanghai Composite ended down 0.2%, after four consecutive sessions of gains. The moves came after data from the National Bureau of Statistics of China said Chinese inflation slowed by more than expected in October largely reflecting a slowdown in food inflation, while producer prices continued their downward trend.

Elsewhere in London, National Grid was up 2.5% after it confirmed media speculation that it is looking to sell its UK gas distribution business in order to rebalance its portfolio, with the proceeds being returned to shareholders.

"The UK Gas Distribution business is a very attractive, mature business delivering good cash flows and return on equity. The board believes there is now an opportunity to rebalance National Grid's portfolio to deliver a higher asset growth profile and realise the value it has created in the networks," the company said.

Vodafone Group was another top gainer, up 2.6%, after it said its pretax profit and earnings both fell in the first half thanks to currency effects, though its underlying performance was relatively robust and it edged up its interim dividend.

The FTSE 100-listed telecommunications company said its pretax profit for the half to the end of September was GBP232.0 million, down from GBP406.0 million, thanks to slightly higher financing costs and lower investment income in the half. Earnings before interest, taxation, depreciation and amortisation fell to GBP5.79 billion, down 1.7% year-on-year, but rose 1.9% on an organic basis, which strips out currency effects and merger and acquisitions.

Wolseley was the worst performing stock in the blue-chip index, down 4.9%. The building materials company said its revenue and trading profit rose in the first quarter of its new financial year but saw UK trading profits decline by 21%.

The FTSE 100 company said revenue for the three months to the end of October rose to GBP3.56 billion, up from GBP3.38 billion a year earlier. The growth in revenue was driven by the US, where construction markets remain very strong. Trading profit for the quarter rose to GBP250.0 million from GBP236.0 million, as its gross margin improved to 28.0%.

However, UK trading profit fell to GBP19 million in the quarter from GBP24 million in the same period last year. The company said gross margins in the region were weaker and costs included some additional investment in marketing and IT capability.

In the FTSE 250, distribution and logistics company DCC said its revenue dipped in the first half but said pretax profit increased thanks to an improvement in its gross margin.

The company said its pretax profit for the half to the end of September was GBP52.5 million, up from GBP42.6 million a year earlier. Revenue fell to GBP5.07 billion from GBP5.43 billion a year earlier, but the group's cost of sales decreased to GBP4.64 billion from GBP5.05 billion, offsetting the fall in revenue.

DCC said it expects its operating profit and earnings will be "very significantly" ahead year-on-year for the full year to the end of March 2016 and "modestly" ahead of market expectations assuming normal winter weather conditions prevail for the remainder of the financial year.

The company was the best performer in the index, up 4.2%.

Still ahead in the economic calendar, the UK inflation report hearing at the House of Commons is at 0900 GMT, before the NFIB Research Foundation's US business optimism index at 1100 GMT. US import and export price indices are at 1330 GMT and the Redbook index is at 1355 GMT.

By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1

Copyright 2015 Alliance News Limited. All Rights Reserved.