UK stock market morning note (February 13, 2014)
February 13, 2014, Thursday, 09:34 GMT | 04:34 EST | 15:04 IST | 17:34 SGT
The FTSE 100 is called to open lower this morning following the performances overnight on Wall Street and in Asia with investors set to pause after the rally in recent days. Domestic data out overnight from the RICS showed that whilst the domestic UK monthly house price balance fell to +53 (+56) in January, demand to buy a property remained strong as we began 2014. Today's economic diary is confined to the US with the publication of core retail sales data and the latest weekly unemployment figures. Commodity prices are generally lower and on the foreign exchanges, the pound is lower against both the dollar and the euro but within narrow trading ranges.
Rolls-Royce Final Results see underlying PBT up 23% to GBP1.75bn on underlying revenue ahead 27% at GBP15.5bn. The payment to shareholders is raised 13% to 22p and its order book grew by 19% to GBP71.6bn. It noted that it expects a pause in revenue and profit growth in 2014 reflecting offsetting trends across the business, adding that growth will resume in 2015. Cashflow is expected to be broadly similar to 2013.
Rio Tinto Full Year Results see a 10% rise in underlying earnings to USD10.2bn with exploration and evaluation savings delivering USD1bn, against a 2013 target of USD750m. Production records were set in iron ore, bauxite and thermal coal with a strong recovery seen in copper volumes. Capex fell 26% to USD12.9bn and the full year dividend is raised 15% to 192 cents per share.
Imperial Tobacco IMS reports tobacco net revenue underlying growth of 1% with its growth brands continuing to outperform the market with volumes up 2% in total and 8% in growth markets. It noted that its cost optimisation programme is on track, adding that a reasonable assumption for the full year continues to be a modest growth in EPS at constant exchange rates and for at least a 10% rise in dividends.
AMEC Full Year Results see EBITA up 3% at GBP343m on revenue down 3% at GBP3.97bn, although underlying revenue ex incremental procurement rose 2%. It noted a record order book of GBP4.1bn with the dividend being raised 15% to 42p. It added that it expects good underlying revenue growth in 2014, with ongoing strength in conventional oil and gas and clean energy markets. It also separately confirmed the firm offer for Foster Wheeler that was outlined last month.
Lloyds Banking Group Full Year Results see core underlying profit rise 24% to GBP7.57bn with a statutory PBT of GBP415m. Costs fell by 5% to GBP9.6bn and credit quality continued to improve with the impairment charge reducing by 47% to GBP3bn. It added that for 2014 costs are expected to be around GBP9bn, the impairment charge as a percentage of average advances is expected to reduce to around 50bps. It reiterated that it expects to apply to the PRA in H2 2014 to restart dividend payments at a modest level.