LONDON (Alliance News) - London's stock indices opened higher Thursday ahead of an expected interest rate cut from the Bank of England later in the day, while shares in recruiter Hays were boosted by a strong trading update.
The FTSE 250-listed headhunter said strength in its Europe division helped total net fee income grow in the fourth quarter of its financial year and said its operating profit will outpace market expectations, despite a sluggish and Brexit-hit UK market.
Total net fees grew 12% in the quarter to the end of June, with like-for-like growth of 8.0%.
The company's Continental Europe & Rest of World division delivered total net fee income growth of 29% in the quarter, driven by very strong trading in Germany, Belgium, France and Switzerland. Like-for-like growth in the division was 21% for the quarter.
But net fees in the UK & Ireland fell 3.0% in the quarter and by 4.0% on a like-for-like basis, reflecting continued softness in public sector recruitment and a weakening of sentiment in the private sector ahead of the EU referendum vote.
Hays said full-year operating profit is anticipated to be around GBP180.0 million, ahead of current market expectations. The stock was the best performer in the FTSE 250, trading up 9.4%.
The FTSE 100 index was up 0.8%, or 52.35 points, at 6,722.75. The FTSE 250 was up 0.6% at 16,850.71 and the AIM All-Share was slightly higher at 724.74.
The Bank of England will announce its monetary policy decision at noon, and the market is widely expecting a 25 basis point cut to the bank rate of 0.5%. The move would mark the first change to the central bank's interest rate since March 2009 and would be intended to support the UK economy after the referendum which saw the UK vote to leave the European Union.
In Europe, the CAC 40 in Paris was up 1.2% and the DAX 30 in Frankfurt was up 1.6%.
In Asia, the Nikkei 225 index in Tokyo closed up 1.0% and the Shanghai Composite ended down 0.2%. The Hang Seng in Hong Kong continues up 1.0%.
FTSE 250-listed software provider Micro Focus International, up 5.8%, said its pretax profit more than doubled in its recently-ended financial year thanks to strong revenue growth, but said it expected either a slight drop or flat revenue in its next financial year as it looks to implement its four-phase plan.
Micro Focus posted revenue of USD1.25 billion million for the year ended April 30, up from the USD83.5 million reported a year earlier, on the back of a strong performance from its SUSE product portfolio, offsetting anticipated revenue reductions in its Micro Focus product portfolio.
The growth meant its pretax profit more than doubled to USD195.4 million from USD91.4 million, an increase which was helped by lower operating costs as a result of integration benefits.
The company said, however, that it did not expect revenue growth in its next financial year, as it looks to "stabilise revenues around a solid core from which we aim to grow in financial year 2018". This is in line with its previously announced strategic plan to simplify the underlying operations of the business.
SuperGroup reported a fall in profit in its recently-ended financial year due to it booking higher one-off costs than the prior year, but revenue rose and the clothing store chain announced payment of its first special dividend.
The fashion retailer, which owns the Superdry brand, said pretax profit in the year ended April 30 fell to GBP55.4 million from GBP59.5 million the year before, as it booked exceptional costs of GBP17 million, relating to losses on financial derivatives and the assessment of fair values, compared to GBP3.7 million such costs the year before.
On an underlying basis, which excludes exceptional costs, pretax profit rose to GBP72.4 million from GBP63.2 million, boosted by growth in revenue to GBP597.5 million from GBP486.6 million. SuperGroup said revenue was driven by womenswear, which was its highest growth category of the year, while the newly-launched Superdry Sport and Idris Elba ranges also did well.
The company will pay a total dividend of 23.2 pence, plus a special dividend of 20p for the year. Shares in SuperGroup were up 5.2%.
Healthcare provider BTG traded down 1.9% after it said its overall performance and trading since April 1 has been in line with expectations.
BTG, which is holding its annual general meeting on Thursday, said its underlying guidance for 2016 remains unchanged.
Guidance is for revenue of between GBP485 million and GBP515 million, research & development costs of between GBP85 million and GBP95 million, and selling, general & administrative expenses of between GBP160 million and GBP170 million.
However, if sterling was to weaken even further against the dollar, revenue guidance would improve to between GBP510 million and GBP540 million, R&D investment would be between GBP90 million and GBP100 million, and SG&A expenditure would be between GBP165 million and GBP175 million.
BTG said if this were to happen, the foreign exchange benefit would be mostly offset in the short term by foreign exchange losses on existing forward contracts to hedge future US dollar cash flows.
Aside from the Bank of England's decision, also ahead in the economic calendar are the US producer price index and initial and continuing jobless claims numbers at 1330 BST.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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Hays (HAS)
