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UK stock market morning note (February 19, 2013)

The FTSE 100 is called to open flat to slightly higher this morning although sentiment is likely to remain cautious. There is no major economic data due for release today but investors will keep an eye on the outcome of a Spanish debt auction. Commodity prices are mixed and on the foreign exchanges, the pound is up slighly against both the dollar and the euro but all the major currencies are trading within a narrow range.

Company Announcements

Drax Preliminary Results saw EBITDA decline in line with expectations to GBP298m (2011: GBP334m) and PBT fall to GBP190m on lower revenue of GBP1.78bn. The total dividend declines to 25.3p a share. Capital investment in 2012 amounted to GBP224m, including GBP180m for its biomass transformation. Guidance for 2013 on investment is between GBP250m to GBP300m, with total capital costs for its biomass transformation remaining in the range of GBP650m to GBP700m. It noted that its biomass transformation was well underway with the first unit to be converted to biomass in April 2013 and a second unit planned for 2014. It added that it will be investing significant amounts of capital over these two years and EBITDA in this period will be adversely impacted by the increasing costs of carbon. 

InterContinental Hotels Final Results saw operating profit rise 9.8% to USD614m on revenue ahead 3.8% at USD1.83bn. RevPAR grew 5.2%, led by the US which was up 6.3%. The dividend is raised 16% to 64 cents a share noting that it was positioned for a further good performance in 2013 despite the challenging economic environment. It added that January global RevPAR was up 6.6% with Americas ahead 7% and Greater China +21%, the latter in the main reflecting the shift in timing of the Chinese New Year in 2013.