Tue City brief: Direct Line, Taylor Wimpey, Devro
The FTSE100 closed down 51 points at 6889.13 after rising in early trade as corporate news was led by solid profits from Barclays and increases in dividends, notably from Taylor Wimpey. This was the index’s first close below the 6,900 mark since 19 February.
A mixed batch of economic data and weak corporate earnings gave investors the excuse to take profits after Monday’s record highs.
Summary of results today:
DIRECT LINE: pre-tax profits up 12% to £456.8m and a windfall of £430m from the sale of the international business. There is a proposed 4.8% increase in final dividend to 8.8p per share and a second special interim dividend of 4p per share. Total dividends for 2014 of 27.2p per share (2013: 20.6p)
TAYLOR WIMPEY: Operating profit rose 54% last year and the company reports the spring selling season has seen trading at the better end of expectations. Peter Redfern, chief executive, says customer confidence is high with good levels of employment and an affordable mortgage environment. The UK housing market remains healthy. Proposed final dividend of 1.32p per share to be paid on 20 May (2013: 0.47 pence per share). Total dividend for the year of 1.56p (2013: 0.69p).
DEVRO: Restructuring costs at the Moodiesburn meat casing company meant pre-tax profits fell from £37.5 million to £2.2m, but the company says investment and cost control is on track. Strong cash generation with operating cash flow before exceptional items is up by 10% as inventory levels reduced following actions taken to manage production capacity together with improved sales. Board proposes an unchanged final dividend at 6.1p per share (2013: 6.1p) bringing the total for the year to 8.8p per share (2013: 8.8p) payable on 15 May.
Peter Page, chief executive said: “Devro has started 2015 with good order levels and momentum in sales growth. Cost reductions from the restructuring programmes in Scotland and Australia will be achieved at the same time as a slowing of input cost increases compared with recent years. 2015 is an important year in the development of Devro, with the construction of the two new plants in the USA and China reaching completion, whilst continuing to decommission the older, less efficient capacity.
‘These developments will enable Devro to take advantage of the considerable opportunities worldwide for long-term growth in demand for collagen casing.”