Market report

Weir invests in mining capacity | Oil price hits $117 | Devro divi up


5pm: Oil drives London higher

Rising oil prices, touching $117 a barrel, pushed the FTSE 100 up strongly, closing 99.36 points higher at 7,429.56.

In earlier trade Persimmon was up 6.8% after the housebuilder said its performance was strong in 2021. It delivered more homes and said it had strengthened its platform for future growth.

For 2021, pretax profit came in at £966.8 million, from £783.8m in 2020 on revenue of £3.61 billion, from £3.33bn.

The company will pay a 125p regular annual dividend instalment in April, alongside a 110p payment of surplus capital in July.

Barratt Developments, Taylor Wimpey and Berkeley were lifted by 3.7%, 3.4% and 2.5% respectively.

7.05am: Aviva acquires wealth business, announces two-year dividend outlook

Aviva announced the acquisition of Succession Wealth for £385 million alongside year-end figures showing “significant strategic progress” in a year of restructuring.

Full story here

7am: Weir plans investment

Jon Stanton, chief executive of Weir Group, now repositioned as a mining technology company, said the company started 2022 with a record order book and market conditions that continue to be favourable.

“Subject to ongoing geopolitical uncertainty, and with Covid-19, inflationary and supply chain pressures likely to persist, we currently expect to deliver strong growth in constant currency revenue and profit this year and further progress towards our medium-term performance goals.

Mr Stanton said the mining industry will need to invest significantly in expanding capacity to meet demand for commodities while also meaningfully reducing its environmental impact through the adoption of new technologies and novel processes.

“I expect this to trigger a surge in new exploration, the expansion of existing resources, and accelerated investment in the development of new breakthrough technologies, all of which will provide tremendous future growth opportunities for innovative engineering partners like Weir,” he said.

The financial impact of a cyber attack in September was at the lower end of the range set out in October, in large part due to the resilience inherent in the company’s operating model.

Adjusted profit before tax for the year to the end of December stood still at £249m while statutory profit before tax rose 18% to £209m (2020: £178m).

The company proposes a final dividend of 23.8p (2020: zero).

7am: Devro raises dividend

Meat casings company Devro said underlying operating profit came in at £42m, up 2.9% on prior year and 12.7% at constant currency on a 5.5% rise in group revenue. 

The Moodiesburn company proposes a final dividend of 6.5p, making a total dividend of 9.3p, up 3.3% on the prior year, and the first increase since 2018.

Rutger Helbing, chief executive, said: “We made significant strategic and financial progress in the year. Our improved performance was achieved despite ongoing challenging market conditions, including inflationary headwinds.

“We are also pleased with our free cash flow performance which provides us with increasing optionality to invest in new products, to increase manufacturing capacity and to grow the dividend.

“The group has started the year well and, despite ongoing macro-economic headwinds including inflationary pressures and based on current exchange rates , we expect to make good progress in 2022.”

Global markets

Asian stocks came under renewed pressure on Wednesday and the price of oil surged to $111 per barrel as investors worried about the impact of sanctions against Russia for invading Ukraine.

Exxon Mobil  became the latest major to exit Russia operations, including oil production fields, following similar decisions by British oil giants BP and Shell , and Norway’s Equinor ASA.

Global benchmark Brent crude rose more than 5.8% to $111.09, its highest since early July 2014. US West Texas Intermediate crude jumped nearly 6% to $109.30, its highest since September 2013.

The rise came despite a global agreement to release 60 million barrels of crude reserves to try to rein in price increases and mounting inflationary pressures.

Global stock benchmarks saw another day of losses Tuesday. On Wall Street, the Dow Jones was 1.76% lower while the S&P 500 fell 1.55% and the Nasdaq Composite shed 1.6%.

In Asia, Japan’s Nikkei was 1.7% lower and Hong Kong’s Hang Seng lost 1.3%.

London’s blue-chip benchmark FTSE 100 was called about 15 points higher. 

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