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London midday: Outsourcers in focus
Wed, 08 Feb, 2012
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London midday: Outsourcers in focus
Wed, 25 Aug 2010, 11:28:00
An attempted mid-morning rally ran out of steam and the Footsie finished the morning session not far off its low point for the day. The decline could be worse, however, but decent results from a couple of the blue-chip index's constituents have provided some cheer. A 14% hike in car insurance premiums and a surge in new customers helped first half profits jump by a fifth at insurer <b>Admiral</b> despite a tough time for price comparison subsidiary Confused.com as meerkats and opera singers hit it hard. <b>Serco</b> is higher after it said it expects strong organic revenue growth in 2010. The outsourced services provider reported in-line half year figures. Adjusted pre-tax profits rose to £110.2m in the six months ended 30 June compared with £92.3m last time. Sector peer <b>Capita </b>advances in sympathy but business process outsourcing giant <b>Xchanging </b>is out of sorts after an analysts briefing this morning failed to quell concerns about the company's accounting policies. Record sales volumes of iron ore, metallurgical coal and oil helped mining giant <b>BHP Billiton</b> lift underlying net income by 16% last year. The group, which recently launched a £26bn bid for Canadian fertiliser group Potash, posted pre-tax profits of $19.6bn, up from $11.6bn, in the year to June on revenues 5% better at $52.8bn. Evolution Securities, which rates the shares as a "buy", said the results "came in a little better than our conservative numbers but below consensus," but added that "the ley numbers to focus on are the "US$17.9bn of operating cash flow and the reduction in net debt to only US$3.3bn for a gearing ratio of 6%." Temporary power solutions provider<b> Aggreko</b> anticipates the outcome for the full year to be slightly better than expectations after posting a good set of half-year figures. Pre-tax profit rose 18.9% in the six months ended 30 June to £127.1m, while revenue increased to £583.6m compared with £499.8m last time. The interim dividend rises 50% to 6.55p. On the downside, <b>Tullow </b>is cheaper after investors took the opportunity to bank some profits on the occasion of the Irish oil firm's interim results. Higher commodity prices gave Tullow Oil a boost in the first half of 2010, propelling profits up almost three times, in line with expectations. Profit after tax leapt to $89m from $31m in 2009 on sales up 11% to $486m. Production fell 6% to 55,800 barrels of oil equivalent per day (boepd). "Overall, nothing to change our view that Tullow is over-valued and we retain our Sell rating," said FinnCap. The company said that the Ugandan government is delaying final approval of the sale to Tullow of <b>Heritage Oil</b>'s 50% operated interests in blocks 1 and 3A in the Lake Albert Rift Basin until a tax dispute between the two companies is settled. Adverts featuring blind footballers and an "exceptional" World Cup linked largely to England's dismal showing did the trick for <b>Paddy Power</b> with first half profits up over 50%. The Irish bookie also now expects to beat market forecasts for the year. Broker Daniel Stewart applauded the 28% increase in interim dividend but with the stock trading at a 48% premium to its peers it thinks there is better value to be found elsewhere in the sector. Structural steel supplier <b>Severfield-Rowen</b> cut its interim dividend by half after reporting lower revenues and profits. Revenue of £126.7m and underlying pre-tax profits of £8.2m dropped by 36.7% and 66.7% respectively and the interim dividend has been cut to 5p per share from 10p last time. <b>Derwent London</b>, which rents out offices in the capital, said the improved conditions that emerged within its investment and occupational markets in central London during the second half of 2009 continued into the first half of 2010. Adjusted net asset value (NAV) per share increased 17% to 1,365p in the six months ended June and 37% over the last 12 months. Broker KBC Peel Hunt responded by bumping up its estimate of the year-end NAV to 1400p from its previous forecast of 1356p. The share price sits at a premium to NAV, however, and the broker is sticking with its "hold" rating. Scottish port operator <b>Forth Ports</b> lifted half year profit 29% after a good performance from its ports business and said it is confident about the remainder of the year. Forth, whose ports include London's Tilbury docks, Grangemouth and Leith said profit before tax increased to £16m for the half year ended 30 June from £12.4m in 2009. Revenue rose to £89.6m from £86.6m. <b>SIG</b>, the insulation materials and specialist construction products maker, has confirmed well-flagged interim results, but is worried about how things will develop over the next few months. The loss before tax was slashed to £2.2m from £9.2m previously, but underlying profit dropped 16% to £18.5m. Film studio <b>Pinewood Shepperton</b> recorded a 12% drop in half year profit but said revenues for 2010 are now expected to exceed market expectations. <b>FTSE 100 - Risers</b> Admiral Group (ADM) 1,523.00p +3.39% Serco Group (SRP) 573.50p +2.50% Centrica (CNA) 325.00p +1.34% Inmarsat (ISAT) 662.50p +1.15% United Utilities Group (UU.) 570.50p +1.06% Severn Trent (SVT) 1,300.00p +0.93% ARM Holdings (ARM) 333.00p +0.91% Smiths Group (SMIN) 1,148.00p +0.88% Land Securities Group (LAND) 602.50p +0.75% Capita Group (CPI) 707.50p +0.71% <b>FTSE 100 - Fallers</b> Tullow Oil (TLW) 1,225.00p -5.55% BP (BP.) 369.00p -2.25% Petrofac Ltd. (PFC) 1,361.00p -2.23% BT Group (BT.A) 132.80p -1.78% WPP Group (WPP) 634.00p -1.63% Aggreko (AGK) 1,406.00p -1.61% Old Mutual (OML) 125.00p -1.57% 3i Group (III) 255.70p -1.54% Invensys (ISYS) 238.00p -1.41% Home Retail Group (HOME) 212.30p -1.35%
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