Croda reveals record profit, Direct Line to pay bumper dividend

London open

The FTSE 100 is expected to open six points higher on Tuesday, having closed up 0.62% at 7,289.58 on Monday.

Stocks to watch

Speciality chemical company Croda International reported a record full-year profit on Tuesday as sales grew thanks to a strong performance across sectors and regions. In the year to the end of December 2017, adjusted pre-tax profit was up 11.1% to a record £320.3m on sales of £1.4bn, up 10.4% on 2016. IFRS pre-tax profit increased 14% to £314.1m and adjusted basic earnings per shares were up 15% to 179p.

Direct Line announced bumper dividend payments as the insurance company posted a more than 50% increase in annual operating profit. The FTSE 100 general insurer proposed a final dividend of 13.6p a share, up from 9.7p a year earlier. The payment pushed the payout for the year to the end of December to 20.4p from 14.6p. Direct Line also announced a special dividend of 15p taking total dividends for the year to 35.4p a share from 24.6p in 2016. Annual operating profit from continuing operations rose 51.4% to £610.9m as gross written premiums increased 3.6% to £3.4bn. The results also reflected a change to the personal injury discount rate which reduced profit in 2016.

Provident Financial's Vanquis Bank has been hit with a sizeable fine by the financial regulator over failings associated with its Repayment Option Plan product and ordered the non-standard lender to pay a whopping £168.8m in compensation to customers. The FCA fined Vanquis £1.976m and ordered Vanquis to pay back the interest customers were charged on ROP from 1 April 2014 to when customers were informed of the full cost of the product.

Meggitt saw full-year free cash flows jump 42% to £186m, alongside a 34% increase in statutory profits to £262.4m. In underlying terms, the engineer reported a 2% rise in underlying profits before tax to £357.9m as sales edged ahead by the same measure to £2.03bn. The company's earnings per share followed a somewhat similar pattern, surging by 105% to 45.2p per share in statutory terms but with the underlying measure edging ahead by just 1% to 35.3p a share. In parallel, its net debt position declined by 18% to £964.8m while the company's full-year payout was increased 5% to 15.85p.

Greggs served up some steamy numbers to shareholders on Tuesday, with total sales up 7.4% in its preliminary results to £960.0m. The FTSE 250 bakery chain said that in the 52 weeks to 30 December, company-managed shop like-for-like sales were ahead 3.7% - slower than the 4.2% growth seen in in 2016 - while its operating profit excluding property profits and exceptional items was ahead 4.6% at £81.7m. Pre-tax profit excluding exceptional items rose to £81.8m from £80.3m, with Greggs’ pre-tax profit falling to £71.9m from £75.1m once those exceptional items were included.

Persimmon pledged to pay out double its previously promised surplus cash via bumper dividends over this and the next two years as it reported profits growth and encouraging recent sales. Legal completions during 2017 increased by 872 new homes to 16,043 and the FTSE 100 company's average selling price increased 3.2% to £213,321.

Newspaper round-up

A senior Conservative MP has criticised the government for failing to make progress on a transition deal to smooth Britain’s exit from the EU, warning that businesses could relocate jobs outside of the UK without urgent action. Nicky Morgan, the chair of the Commons Treasury select committee, said businesses were “crying out” for details of a proposed period to cushion Britain’s withdrawal from the EU from March 2019, calling on ministers to swiftly resolve their differences and reach a deal with Brussels or face damaging consequences. - Guardian

A wave of job cuts across the energy sector could be an unintended consequence of the Government’s price cap as companies scramble to cut costs. The Government on Monday introduced the Domestic Gas and Electricity (Tariff Cap) Bill in Parliament, which tasks industry regulator Ofgem with creating a cap on the most expensive standard tariffs until 2020 with a potential extension to 2023. - Telegraph

Selling 5,117 luxury sports cars in 2017, 58 per cent more than in the year before, has sent Aston Martin roaring back into the black. The carmaker’s best performance since the financial crisis also has put it in pole position for a stock market flotation. - The Times

The board of Carillion was in crisis as early as last May, according to minutes of a directors’ meeting during which a senior lawyer warned them that they may be guilty of misleading the stock market. Yesterday it emerged, in disclosures from the parliamentary inquiry into how Carillion came to enter compulsory liquidation last month, that at a meeting of the board on May 9 last year the company’s accounting of several key contracts “seemed to ring alarm bells and raise red flags”. - The Times

The Mayor of London Sadiq Khan has hit out at the Government for delays over revealing foreign owners of UK property, calling the progress on a public register “bitterly disappointing” as he suggested the current lack of transparency could be aiding terrorism and other crime. Mr Khan has written to Greg Clark, the Business Secretary, asking him to speed up the process of implementing a new public register which would expose people who benefit from property controlled by overseas companies and other legal entities. - Telegraph

Britain is in danger of missing the European Union’s carbon dioxide reduction targets because drivers have been put off buying diesel cars, which can be 20 per cent more fuel-efficient than petrol models. The car industry has warned that, in the absence of improved sales of electric cars and low or zero-emission hybrids, the government must stop its “anti-diesel agenda” if it wishes to get the sector back on target for helping to deliver a greener economy. - The Times

US close

Trading in US stocks finished firmly on Monday as investors on Wall Street shook off worries about the recent inflation picture and rising interest rates, while thumbing through a slew of data releases ahead of Jerome Powell's first testimony as Federal Reserve chairman.

The Dow Jones Industrial Average finished up 1.58% at 25,709.27 and the S&P 500 was ahead 1.18% at 2,779.60, while the Nasdaq 100 ended the day up 1.34%.

Fedspeak was in focus as the newest member of the central bank, Randal Quarles, all but confirmed the path ahead for rate hikes, telling the National Association for Business Economics that it had been “quite some time” since the economy was looking so healthy.

“I am fairly optimistic about the current state of the economy,” he said.

“Along many dimensions, it has been quite some time since the economic environment has looked as favorable as it does now.

“With my current economic outlook, I anticipate that further gradual increases in the policy rate will be appropriate to both sustain a healthy labor market and stabilize inflation around our 2 percent objective.”