Market report

FTSE recovers | BA eyes profit | Rightmove | Alliance Trust


5pm: FTSE recovers

The FTSE 100 rebounded strongly, recovering all of yesterday’s loss. It closed 282.08 points higher 3.91% at 7,489.46.

Russian steelmaker Evraz whose major shareholder is Chelsea FC owner Roman Abramovich, surged 19.53%, having slid a day earlier amid worries about the impact of the Ukraine crisis.

The company’s full-year results showed that net profit rose to $3.1bn from $858m (see below).

Anglo-Russian precious metals miner Polymetal International was also in the black, jumping 17% after heavy losses on Thursday.

Educational publisher Pearson gained 12.1% after saying it would launch a £350m share buyback, and that demand for assessment and qualification services had allowed it to hit its 2021 targets.

Rightmove rose 4.52% after the online property portal posted a jump in full-year profit and sounded an upbeat note on the outlook.

Shares in British Airways owner IAG closed in the black after a turbulent session for the stock, with its shares closing up 4.83%

SSE was 5.74% higher following a report that it had lined up banks to lead the sale of minority stakes in two electricity networks as it seeks funds for its green spending drive.

10.15am: SNIB CEO quits

Eilidh Mactaggart has resigned as CEO of the government-backed Scottish National Investment Bank.

Full story here

9.30am: British airlines banned from Russia

British airlines have been banned from landing at Russia’s airports and from crossing its airspace in the first tit-for-tat measure threatened by Moscow yesterday.

The ban, announced by the Russian civil aviation regulator, follows the UK’s decision to ban Russia’s national airline Aeroflot from landing in the UK.

The UK’s ban was part of sanctions introduced in response to Moscow’s invasion of Ukraine.

9am: London opens higher

The FTSE 100 took its cue from Wall Street’s jump and rebounded from yesterday’s severe crash. It was trading 73.7 points higher at 7,281.08.

7am: British Airways owner cuts losses

British Airways owner International Consolidated Airlines Group said it expects a return to profitability in 2022 after posting a reduced statutory operating loss of €2.76 billion for the year to 31 December (2020 restated: €7.45bn).

The operating loss before exceptional items came in at €2.97bn (2020 restated: €4.39bn).

Passenger capacity in Q4 was 58% of 2019 capacity, up from 43% in Q3 and for the full year was 36% of 2019 capacity.

Significantly improved operating cash flow of €1bn in the second half of 2021, driven by positive EBITDA in quarter 4, strong forward bookings and favourable working capital.

7am: Rightmove upbeat

Online property portal Rightmove posted said pre-tax profit rose to £225.6m in the year to the end of December from £134.8m the year before, with revenue up 48% at £304.9m.

The company proposed a final dividend of 4.8p a share, from 4.5p in 2020 and taking the total dividend for 2021 to 7.8p.

Housing transactions increased 41% on 2020 and were up 26% compared to 2019, ending the year at 1.44m.

7am: Evraz up but issues warning

Russian steelmaker Evraz, whose major shareholder is Chelsea FC owner Roman Abramovich with 28.64%, announced sharply improved figures, but warned that its operations could be affected by events in Ukraine.

The group said net profit increased to $3.1 billion for the year to the end of December compared with $858 million in FY2020 and said shareholders will share an interim dividend of $729m ($0.50 per share).

In a statement the company said: “The major part of the group is based in the Russian Federation and is consequently exposed to the economic and political effects of the policies adopted by the Russian government.

“Worsening situation related to Ukraine has further increased the economic uncertainty and the risk of the imposition of sanctions. These conditions and future policy changes could affect the operations of the group and the realisation and settlement of its assets and liabilities.”

The demerger of the coal business is expected to complete in late March.

Net debt was significantly reduced to $2.7bn (FY2020: $3.4bn).

7am: Boot steps down

Construction group Henry Boot has announced that after more than 40 years service, Jamie Boot will be retiring as chairman and from the board following the company’s AGM on 26 May.

He will be succeeded by non-executive director, Peter Mawson, a member of the board since 2015.

7am: Babcock on track

Aerospace and defence firm Babcock International said trading across the first ten months of the year had been in line with expectations, with its full-year results still set to be fourth quarter weighted.

Babcock, which kept its full-year guidance unchanged, stated it had continued to manage costs associated with Covid-19, ongoing inflation and supply chain pressures, with its new operating model on track to deliver savings of about £20m in the current financial year.

7am: Alliance Trust

Alliance Trust delivered a total shareholder return of 16.5% in the year to the end of December. Net Asset Value total return was 18.6% while the company’s benchmark index returned 19.6%.

The company declared a fourth interim dividend for the year of 5.825 pence per share payable on 31 March to shareholders on the register on 11 March 2022. The ex-dividend date is 10 March.

Gregor Stewart, chairman, said: “The company has delivered a strong absolute performance with a Total Shareholder Return of 16.5%.

“Against the backdrop of new Covid-19 variants, increasing inflation and a few large technology companies dominating returns, this was a robust result although behind our benchmark.

“A significant increase in dividends was introduced for the third and fourth interim dividends resulting in a year-on-year total increase of 32.5%. Had we applied the same increased level of interim dividend throughout 2021, this would have resulted in an annual dividend yield of 2.3%.

“From here, we expect to continue extending our 55-year track record of annual dividend increases.”

12.01am: Scottish industry sees improvement

Scottish Engineering, the trade body, said the positive demand it had “cautiously” tracked through 2021 was strengthening, with order intake, output, exports and staffing “strongly positive” for four quarters in a row, and optimism up more than half in the last three months.

However, in its latest quarterly review business leaders warned of continuing pressure on a range of costs, reflected in the “stubbornly high impact on export and UK pricing”.

Looking to the next three months, the review’s forecasts are generally upbeat, as the sector adapts to new technology.

Global markets

Oil prices surged again on worries about supply disruptions, with Brent crude rising 2% to $101.80 a barrel, while US West Texas Intermediate (WTI) crude rose 2.7% to $95.53, although both benchmarks were off their highs.

After yesterday’s fall in equity markets, traders are expected to see some uplift today as bargain hunters seek out bombed out stocks and the Ukraine conflict may cause a delay to interest rate rises.

The FTSE 100 was expected to open around 88 points higher at 7,295.

US markets ended the day in positive territory yesterday after a weak opening, the Dow Jones Industrial Average closed up 0.28%, while the S&P 500 gained 1.5% and the Nasdaq Composite was 3.34% to the good.

In Asia the Nikkei 225 is higher but the Hang Seng is 0.44% weaker.

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