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Reports UK

UK stock market morning note (August 14, 2014)

August 14, 2014, Thursday, 07:02 GMT | 02:02 EST | 11:32 IST | 14:02 SGT
Contributed by SVS Securities

The FTSE 100 is called to open flat to slightly higher this morning following the more robust performances on Wall Street and in Asia. Overnight we had domestic economic data out from the RICS reporting that the July house price balance came in at +49, which was below forecast and lower than the revised +52 seen in June as buyer demand flatlined and sales growth moderated as the housing market 'paused for breath'. It noted that prices are still forecast to rise nationally over the next year but members now expect price gains over the next year to be faster outside London than in it. The economic diary today will now focus on the release of the latest US weekly jobless claims due out at lunchtime. Commodity prices are flat to firmer and on the foreign exchanges, the dollar is again slightly higher against the pound, euro and yen but all remain within narrow trading ranges.


Company Announcements

Micro Focus

IMS reports that total revenues in the period to end July 2014 on a constant currency basis were in line with the corresponding period a year ago with underlying adjusted EBITDA ahead of the comparable period. Management's outlook remains unchanged from that set out in the preliminary results in June with it noting that it believes its strong operational and financial model can continue to provide strong returns to shareholders. In respect of the latter, it is proposing, subject to shareholder approval a further return to shareholders of 60p a share amounting to GBP84m in cash using a similar share scheme mechanism it has previously utilised. It is anticipated that the return of value will be completed in November.

Carillion

Half Year financial report notes performance in line with expectations with revenue down 5% as expected to GBP1.87bn and underlying PBT up 3% at GBP75.9m. The interim dividend is raised 2% to 5.6p a share. Total orders plus probable orders rose to GBP19.5bn with the pipeline of contract opportunities growing to GBP38bn. It has 93% revenue visibility for 2014 and added that its full year targets for revenue growth are unchanged despite markets remaining challenging. It also separately announced that since Monday it has held a number of meetings with Balfour Beatty shareholders and following a Panel on Takeovers and Mergers request is making this new information public. It noted that it was confident that as a result of a merger, the cost base of the combined group could be cut by at least GBP175m pa by the end of 2016 and that earnings would consequently be significantly enhanced from that year, adding that it is therefore continuing to consider its position.

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