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Reports UK

UK stock market morning note (July 22, 2014)

July 22, 2014, Tuesday, 08:07 GMT | 03:07 EST | 11:37 IST | 14:07 SGT
Contributed by SVS Securities

The FTSE 100 is called to open higher this morning although gains may be limited as investors await further developments from Europe and the possibility of further sanctions being imposed on Russia following the Malaysian plane crash and its ongoing involvement in Ukraine. The economic diary today sees the release of domestic public sector borrowing data, the CBI industrial trends survey followed this afternoon in the US with inflation figures and existing home sales numbers. Commodity prices are mixed and on the foreign exchanges, the pound is slightly higher against the dollar and euro but trading within narrow ranges ahead of these data releases and any further news on Ukraine and also the situation in Gaza.

Company Announcements

ARM Holdings  

Q2 and Half Year Results see the latter's revenues up 16% in dollars to USD614.8m and 9% in pounds to GBP373.7m with PBT also ahead 9% at GBP191.3m. The interim dividend is raised 20% to 2.52p and noted that as expected, its royalty revenues in Q2 had been impacted by seasonal trends and inventory management in parts of its supply chain. However, it went on to say that an improving market environment in H2 gives its confidence in strengthening royalty revenue in H2 2014. It added that it entered H2 with a healthy pipeline of opportunities and expects dollar revenues for the 2014 full year to be in line with market expectations.  

Royal Mail

Q1/IMS reports that in the 3 months to 29 June 2014, it has seen low single digit revenue growth in line with its strategy. Trading has seen a good performance in letters, with the decline in addressed letter volumes better than its expected range, but a weaker than expected performance in UK parcels, driven by competition. It notes that GLS continues to perform well in Europe and its overall cost performance has been better than expected. It added that parcel revenue is likely to be lower than anticipated for the year, but given its cost control measures and continued good letters performance, it expects to offset the impact on profit so that overall performance remains in line with its expectations. However, parcel revenue will be dependent on performance in H2, which includes Christmas and no further weakening in its addressable UK parcel market.

IG Group

Preliminary Results see net trading revenue up 2.4% to GBP370.4m with PBT ahead 1.3% at GBP194.7m. The full year dividend is raised 21.1% to 28.15p. It added that it believes IG is better placed than ever to deliver the next phase of growth, noting in particular the imminent launch of its stockbroking service, as part of its comprehensive share trading offering.