London open: Shares start strongly

Shares have started strongly as company updates are given a warm reception.Shares in Wolseley jumped after the building supplies group said it expects profits for the year to 31 July 2010 to exceed analysts' expectations of £326m. However, it said the better than expected earnings will be due to improvements in cost efficiencies rather than any improvement in economic conditions.Lloyds Banking Group chief executive Eric Daniels' decision to waive his right to a bonus for the second year in succession has found favour with investors. 'Mr Daniels has taken this action because he believes that the excellent progress the group is making, based on the considerable contribution of many colleagues across the company, is in danger of being obscured by the current debate on executive bonus awards in the banking sector,' the group's chairman, Sir Win Bischoff, said.Shares in Mondi are higher after the paper and packaging group reported lower profits for 2009 but took heart from a revival in trading conditions in Europe in the final quarter. Underlying profit before tax in 2009 slipped to £182m from £284m in 2008 on revenue that dipped 17% to £5,257m from £6,345m the year before, but the firm reported 'a steady improvement in industry order volumes, with some recent price recovery in the European packaging grades,'Reckitt Benckiser faces an investigation into sales of its Gaviscon heartburn medicines to the NHS after the OFT accused it of abusing its dominant market position. The OFT alleges that Reckitt Benckiser sought to restrict competition to its Gaviscon brand by withdrawing and de-listing its NHS packs of Gaviscon Original Liquid from the NHS prescription channel just before its patent ran out.Drax, operator of the UK's largest coal-fired power station, delivered a set of full year results ahead of market expectations, despite poor market conditions. Earnings before interest, tax, depreciation and amortisation (EBITDA) in 2009 were £355m, down from £454m in 2008 but ahead of market expectations of £341m.Stephen Thomas, night club owner Luminar's founder and veteran chief executive, is to hang up his dancing shoes after 22 years. He will step down from the board at the end of February but stay with the group until the end of July to ensure a smooth handover to Simon Douglas, his replacement. Douglas was latterly chief executive at music retailer Zavvi.Mining giant Rio Tinto has selected three more partners to work with it on its heavily automated 'Mine of the Future' programme. Aker Wirth, the equipment supplier focused on the resources industry, and power tools and assembly systems outfit Atlas Copco will individually work with Rio Tinto to develop two new tunnelling concepts while Herrenknecht will work with the group on the development of a new shaft boring machine.First half losses piled up at ferrochrome producer International Ferro as a combination of lower ferrochrome prices and a stronger Rand outweighed higher volumes. Revenues fell 14% to R452m for the six months to December 2009, though this was up 77% on the previous six months.Construction and regeneration specialist Morgan Sindall saw profits slide in 2009 but the cash rich company is drawing comfort from its strong order book which should enable the company to 'offset some of the effect of weakening public spending demand.' Profit before tax and amortisation for 2009 dived 28% to £51.5m from £71.4m in 2008, but was ahead of market expectations of £49.33m.Veterinary products group Dechra Pharmaceuticals reported a rise in profits in the six months to December 31 as it continued growing sales in spite of the economic downturn. Pre-tax profits rose to £9.7m from £7.3m on revenues that climbed to £184.8m from £173.2m.Business publisher United Business Media (UBM) has snapped up online banner advertising agency Game Advertising Online. UBM is paying an initial $1m for Game Advertising Online (GAO), with further payments of up to $7m due depending on trading performance of the acquired company.Pendragon, the UK's largest car dealer, bounced back into profit in 2009 but is cautious going forward ahead of the end of the car scrappage scheme and expects conditions to remain difficult. Profits in 2009 came in at £1.3m compared with a loss of £194m.Industrial services group Brammer reported a 29.9% drop in annual adjusted pre-tax profit but said it is cautiously optimistic about 2010. Profit before tax on ordinary activities, before amortisation and exceptional items, fell to £13.8m for the year ended 31 December 2009 from £19.7m before. Revenue fell 10.9% to £426.1m the previous year.