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Reports UK

UK stock market morning note (August 07, 2014)

August 7, 2014, Thursday, 07:25 GMT | 03:25 EST | 11:55 IST | 14:25 SGT
Contributed by SVS Securities

The FTSE 100 is called to open flat to slightly lower this morning following the lack of clear direction overnight from Wall Street and in Asia with market attention still centred on the situation between Ukraine and Russia in addition to the forthcoming announcements from the Bank of England and European Central Bank with both expected to keep interest rates unchanged. The economic diary today also sees the release of the latest US weekly jobless claims at lunchtime. Commodity prices are firmer and on the foreign exchanges, the pound is slightly weaker against the dollar and the euro but within narrow trading ranges ahead of the central banks and data releases. This morning has also seen completion of the all-share merger between Carphone Warehouse and Dixons Retail which will see the new entity, Dixons Carphone begin trading today.


Company Announcements

Aviva

Interim Results see operating profit up 4% at GBP1.05bn with operating expenses GBP129m lower at GBP1.39bn. The operating expense ratio declined to 52.1% (H1 2013: 54.8%) with the combined operating ratio improving to 95.5% (H1 2013: 96.2%). The interim dividend is raised 4.5% to 5.85p. The company's Chief Executive noted that it remains a 'work in progress' with these results 'a step in the right direction'.

AMEC

Half Year Results see underlying revenue and EBITA up 4% and 5% respectively but reported revenue and EBITA were 7% and 4% lower at GBP1.85bn and GBP152m respectively. Adjusted PBT declined 3% to GBP150m with the order book up 16% on an underlying basis to GBP4.2bn. The interim dividend is raised 10% to 14.8p a share. The offer for Foster Wheeler is expected to complete in early Q4 2014 and will be double-digit earnings enhancing in the first 12 months after completion. It added that it now expects modest underlying revenue growth in 2014 from its existing operations, led by ongoing strength in Clean Energy and Middle Eastern Oil and Gas. The mix of business will see a slight reduction in group margins compared to 2013 and as last year, profits and cashflow generation will be H2 weighted. The expected full year impact on reported numbers of the stronger pound currently translates into a year on year impact on revenues of around GBP250m and for EBITA of about GBP25m.

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