Ashtead still strong after third quarter, Paddy Power Betfair starts year on a high
London open
The FTSE 100 is expected to open 16 points higher on Tuesday, after closing down 0.33% at 7,350.12 on Monday.
Stocks to watch
Third-quarter results from Ashtead revealed it remained en route to a strong year of growth, with gross capital expenditure expected towards the upper end of its our previous guidance. Underlying rental revenue from US-based Sunbelt and UK-based A-Plant for the third quarter ended 31 January grew 14%, the same as the second quarter, operating profits also remained at 9%, although earning per share slowed moderately to 8% growth fro 9% in the second quarter.
Newly merged bookmaker Paddy Power Betfair said the new financial year started in line with expectations as it reported a 35% rise in underlying earnings before interest, tax, depreciation and amortisation to £400m. The company said group sportsbook stakes in the year to date were up 22%, with online up 13%, Australia 47% and retail up 15%.
Intertek saw full-year 2016 sales rocket 18.5% to £2,567.0m as weakness in the pound continued to bolster its top-line. The testing, inspection and certification specialist also reported a 8.9% organic sales increase to £2,321.0m, although at constant exchange rates that was reduced to a rise of just 0.1%. Acquisitions added £242m to the total revenue figure, with management telling investors the company would continue to carry out M&A to strengthen its portfolio in "the right growth" areas.
Just Eat’s 2016 revenue and earnings surged as it seeks to capture further share of the online food delivery market. Revenues surged 52% in 2016 to £375.7m, compared to last year, and were up 46% on a like for like basis, while underlying earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 93% to £115.3m.
Electronic payments processor Worldpay posted its final results for the 2016 calenday year on Thursday, with the company seeing a 14% rise in transactions to 14.9 billion, as total transaction value rose 12% to £451.1bn. Both revenue and underlying EBITDA were up 15% at £4.54bn and £467.6m respectively, with the FTSE 100 firm swinging to 6.6p earnings per share from 1.8p losses per share in 2015. The board confirmed a total dividend per share of 2p.
Newspaper round-up
A global glut of oil could turn into a shortage within three years unless billions of dollars worth of new investments are made in the industry, the International Energy Agency said yesterday. In its latest five-year oil market forecast, the agency said that supplies of oil until 2020 appeared comfortable but after that it predicted a rapid fall in new supply growth, the consequence of a sharp drop in investment since crude prices plunged in 2014. - The Times
The North Sea oil industry is in dire need of fresh capital investment to drive activity in the embattled basin beyond 2020. The stark warning emerged from an annual industry-wide report from trade group Oil and Gas UK which found that the green shoots which have emerged in the last year mask a deeper problem for the oil basin which is suffering from record lows for new capital investment. - Telegraph
Vauxhall workers are likely to take a significant cut to their pensions before any decision about the long-term future of their jobs after the sale of the UK-based automotive group to PSA Peugeot Citroen. The French carmaker yesterday signed a deal with Vauxhall’s US parent General Motors to take control of its European operations — Vauxhall and its larger German sister company Opel. - The Times
The culture secretary yesterday gave the clearest indication yet that she would take account of failures of corporate governance at News Corporation during the phone hacking scandal when considering the £11.7 billion bid by 21st Century Fox to take full control of Sky. On Monday she told the House of Commons: “I am concerned about the nature of a number of breaches of broadcasting standards by 21st Century Fox as well as the behaviour and corporate governance failures at News Corporation in the past.” - The Times
Rupert Murdoch’s attempted takeover of Sky must be thoroughly investigated by Ofcom in light of corporate governance failures surrounding the phone-hacking scandal, Tom Watson, the shadow culture secretary, has said. During a debate in the House of Commons on Monday, Watson pressed the culture secretary, Karen Bradley, to refer the deal to the regulator on grounds that allow it to properly examine the corporate governance record at Murdoch’s media empire. - Guardian
US close
US stocks traded lower on Monday as geopolitical concerns weighed on investors' minds, while they also continued to mull over a prospective rate hike by the Federal Reserve next week.
The Dow Jones Industrial Average was down 0.24% at 20,954.32, the S&P 500 fell 0.33% to 2,375.31 and the Nasdaq 100 was 0.25% weaker at 5,360.31.
Meanwhile, West Texas Intermediate was down 0.32% at $53.16 per barrel and Brent crude rose 0.07% to $55.94.
During a speech in Chicago on Friday, Fed chair Janet Yellen said: “We currently judge that it will be appropriate to gradually increase the federal funds rate if the economic data continue to come in about as we expect.
"Indeed, at our meeting later this month, the committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate.”
Ipek Ozkardeskaya, senior market analyst at London Capital Group, said that Yellen left little to the imagination for an interest rate hike and “also hinted that there could be more tightening in 2017, meaning that the Fed could raise rates more than three times anticipated by the markets.