Market report

Costain back in profit, no payout | SMS contract wins


5pm: Blue chips higher

The FTSE 100 closed 24.24 points higher at 7,150.12.

11.30am: Gatwick runway consultation

Gatwick Airport is to begin a public consultation next month on its plans to bring its existing Northern Runway into routine use for departing aircraft alongside its Main Runway. 

The scheme will help secure the airport’s long-term growth by repositioning its centre line further north by 12 metres. 

The plans, which were unveiled in January, allow for an increase in passenger capacity to approximately 75 million passengers a year by 2038. 

9.45am: GDP rises

Quarter 2 (April to June) GDP is provisionally estimated to have grown by 4.9%, reflecting a recovery in output after the fall of 1.8% during the lockdown restrictions in Quarter 1.

9.30am: Blue chips trade higher

Traders edged the FTSE 100 into positive territory, marking the blue chip index 7.66 points higher at 7,133.44, off the day’s high of 7,145.

“The FTSE 100 continues to see out a fairly docile week so far, marking time until the start of tomorrow’s Jackson Hole summit of key economic decision makers,” says AJ Bell financial analyst Danni Hewson.

“The travel sector continues to enjoy some strength amid hopes for the easing of restrictions with a dip in the pound also helping to lift the UK’s flagship index.

“Weaker sterling boosts the relative value of the overseas earnings which dominate the FTSE, though the more domestic FTSE 250 was also moving higher too, reaching a new record level early on.

“The feeding frenzy on the UK market showed no sign of letting up as waste management firm Augean agreed to an offer from London-based investment manager.

“This continuing global corporate raid suggests bidders still see a lot of untapped value in the UK market. The danger is that if it doesn’t let up soon London will be left looking like a bit of wasteland for stocks.”

7am: Smart Metering Systems

Alan Foy

Smart Metering Systems has announced a new domestic smart meter contract win with a large energy supplier for the installation of at least 400,000 domestic smart meters.

The contract increases the Glasgow-based company’s contracted smart meter order pipeline to 2.75 million meters (30 June 2021: 2.35m) and will, on delivery, add to the Group’s existing £84.2m long-term indexed-linked annualised recurring revenues as at 30 June 2021.

It has also secured an additional grid-scale battery project, increasing the secured pipeline to 240MW.

Alan Foy, chief executive, pictured, said: “Today’s smart meter contract win, which follows two wins announced earlier this year, will further expand our long-term index linked recurring revenues and leverages on the scalability of our well established end-to-end integrated model.

“Grid-scale batteries are critical to balancing the increasing volume of intermittent renewable generation and to further accelerate the adoption of renewables. Our long-standing experience in the design and delivery of large-scale electrical infrastructure projects and asset management positions us extremely well for this longterm attractive asset class.”  

7am: EY fined over Stagecoach audit

The UK’s Financial Reporting Council has fined accountancy firm EY and former Scotland senior partner Mark Harvey over an audit of Stagecoach accounts in 2017.

The Big Four accountancy firm was issued with a severe reprimand and a requirement to report to the FRC for one year in respect to its audit work on onerous contract provisions.

Full story here

7am: Costain swings to profit

Costain Group swung to a profit in the first half of the year and said it is on track to deliver full-year performance in line with expectations.

The infrastructure company posted a pre-tax profit of £9.1 million in the six months to 30 June from a pre-tax loss of £92.3m last time. Adjusted operating profit nearly doubled to £11.5m against £5.7m.

Chief executive Alex Vaughan said: “We continue to be successful in winning new contracts, building on last year’s strong platform and making the most of the significant market opportunities.”

He added that the company had good visibility on completion of contracts for the remainder of the year and is on course to deliver full-year results in line with expectations.

No interim dividend was declared and the company and said it will continue to review the timing of the reinstatement of payments in light of performance, cash flow and balance sheet.

Global markets

The FTSE 100 is expected to open 14 points lower at 7,110 after two days of modest gains.

Asian shares were mixed following gains in all three major US stock indexes, with the Nasdaq and S&P 500 closing at all-time closing highs, the S&P 500’s 50th record high close this year.

The Shanghai Composite index was up 0.34% while Japan’s Nikkei was down 0.08%.

Worries over rising COVID-19 infections eased after the US Food and Drug Administration granted full approval on Monday to the COVID-19 vaccine developed by Pfizer.

Traders remain focused on the Federal Reserve’s annual economic symposium on Friday and any clues regarding the timeline for the tapering of asset purchases, an issue that has buffeted financial markets in recent months.

US crude dipped 0.25% to $67.37 a barrel, while Brent crude fell 0.38% to $70.92 per barrel. Both are up by about 8% on the week, however, after posting their biggest weekly decline in more than nine months last week.

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