News

A thumping stated operating loss and a big cut in the full-year dividend both mean that Mitie’s first set of full-year results under new boss Phil Bentley are pretty ugly, but the conclusion to the accounting review, the launch of a new strategy and a drop in net debt are all giving the shares a lift.

As investors prepare to head to the polls tomorrow, the relative calm pervading the UK stock market suggests investors are pricing in a conservative win. Any other result could therefore lead to some short term volatility but investors should not let this distract them from their long term strategies.

The latest reshuffle of the FTSE 100 is due to be confirmed this evening and based on current market capitalisations Hikma Pharmaceuticals and Intu Properties are due to be relegated to the FTSE 250. Royal Mail is hovering on the fringes of relegation, although it looks safe this time around.

Early gains in Marks & Spencer shares are taking the stock to fresh 12-month highs as chief executive Steve Rowe targets further strategic and operational changes designed to improve financial performance - even if today’s 2016-17 figures are messy and still raise as many questions as they give answers.

In the Jack Nicholson film Chinatown the powerful Noah Cross remarks that even ugly buildings become respectable if they last long enough, so it is perhaps only to be expected that FTSE 250 property play Shaftesbury is attracting a potential suitor, given its owns 14 acres of prime (and far from ugly) London property, including Chinatown, Soho, Carnaby Street and Charlotte Street.

A 3% increase in net asset value, a 3% dividend increase for the year just ended and a planned identical hike for the year just begun are not providing support to British Land's shares as investors continue to focus on the possible impact of Brexit, retailers' woes and the Labour Party's proposed Robin Hood tax upon the FTSE 100 Real Estate Investment Trust.

Higher cash flow and yet another dividend increase are giving a boost to Vodafone’s shares but the juicy 5.5% yield looks necessary to compensate investors for the modest underlying sales and profit increase revealed by both this set of annual numbers and weak long-term record of growing book, or net asset, value.

Today’s statement from the Bank of England’s Monetary Policy Committee notes that “monetary policy can respond in either direction to changes in the economic outlook” and the 7-1 and 8-0 votes against tighter policy hardly smack of a central bank itching to raise interest rates, especially as the sole dissenter, Kristin Forbes, is stepping down in June.

A recommendation from the management team at Hornby that investors shunt into the sidings a 32.375p-a-share offer from Phoenix Asset Management leaves shareholders with three possible options when it comes to rescuing something from a situation where there seems to be little light at the end of the tunnel for the Corgi, Humbrol and Airfix brands owner.

Although the better-than-expected first quarter results are putting BP at the very top of the FTSE 100 leaderboard in early trading, with a 2% gain, sceptics of the stock will point out that free cash flow yet again does not cover the quarterly dividend payment of $0.10 a share, fuelling debate over whether the oil major’s shareholder payout could eventually come under pressure.

The monthly manufacturing purchasing managers index (PMI) soared to 57.3, the highest reading since November 2013 and comfortably above the last 12 months’ average of 53.8.

“A 68% jump in stated net income at Lloyds is giving the high street lender’s shares an early boost as investors feel the width of the bank’s first-quarter profits and decide not to worry about the quality,” comments Russ Mould, investment director at AJ Bell.

American activist investor Elliott Management is booking its second win of the week today as Dutch chemicals giant Akzo Nobel outlines a radical restructuring plan just two days after Klaus Kleinfeld, the boss of American firm Arconic resigned, following a protracted battle with this particular investor.

"An improvement in the third and final economic sentiment survey of the week, the services purchasing managers’ index (PMI), will offer some comfort to Chancellor of the Exchequer Philip Hammond and those investors whose portfolio strategy is based on an improvement in the UK’s economic momentum in 2017 and beyond,” says Russ Mould, investment director at AJ Bell.

Shares in Imagination are down by two-thirds this morning after key client Apple’s decision not to use the FTSE Small Cap’s silicon chip designs in products due for release in 18 to 24 months’ time.

Twenty-six FTSE 100 firms have raised their dividend every year for the past decade but when it comes to consistent increases in the shareholder pay-out few can match AIM-quoted flooring expert James Halstead, whose interim dividend hike today adds to a streak of consecutive increases that stretches back to the late 1970s.

Today’s forecast beating non-farm payrolls number of 235,000 paves the way for a US Federal Reserve rate hike next Wednesday.

The Investment Association has announced the conclusion of its UK Equity Income sector review.

Consumer price index (CPI) inflation increases to 1.8% in January, its highest level since June 2014

Gold mining shares are taking on a fresh lustre after larger-than-expected dividend increases from FTSE 100 firm Randgold Resources and FTSE 250 members Centamin and Acacia Mining, which is the best performer in the FTSE All-Share today with a near-7% gain.

On Tuesday 14 February we will see if the weak pound continues to stoke UK inflation, as well as annual results from Rolls-Royce and gold miner Acacia. Russ Mould, investment director at AJ Bell, looks at some of the key points to keep an eye out for in those announcements.

Woodford Investment Management is expected to launch a new income ‘focus’ fund in March.

Ryan Hughes, head of fund selection at AJ Bell comments on the Investment Association’s statistics on UK investor behaviour for 2016.

Central banks take centre stage this week with the Bank of Japan, US Federal Reserve and Bank of England all delivering their latest monetary policy decisions. Russ Mould, investment director at AJ Bell, looks at some of the key points to keep an eye out for in those announcements, as well as the trading updates from SSE and Royal Dutch Shell.

Russ Mould, investment director at AJ Bell comments on the Fed’s decision to raise US interest rates.

House builder Berkeley’s shares are up 4% today.

FTSE has just announced the latest changes to the FTSE 100 index.

Wednesday will see the latest reshuffle in the constituents of the FTSE 100 and on the basis of their market capitalisations gold miner Polymetal and Travis Perkins will drop out after three-month and three-year stays respectively, with market newcomer ConvaTec certain of promotion, given its £4.8 billion market valuation.

The impact of charges on active fund management performance is brought into stark contrast by the FCA market study.

“Two factors make it perfectly understandable why Snapchat’s parent company, Snap Inc., is reportedly working on a flotation,” says AJ Bell investment director Russ Mould.

A 20% slide in the shares during Steve Rowe’s first six months in office is the worst start to a tenure in office of any of M&S’s last six bosses, in share price terms.

A 20% slide in the shares during Steve Rowe’s first six months in office is the worst start to a tenure in office of any of M&S’s last six bosses, in share price terms.

A flat interim dividend, the abandonment of both the share buyback scheme and special dividends and a restructuring programme at home and abroad shows that Marks & Spencer boss Steve Rowe is sensibly focusing on managing the underlying business rather than just the reported numbers.

“Today’s High Court ruling that Parliament should get to vote on whether Article 50 is triggered is already sparking a recovery in sterling,” says Russ Mould, AJ Bell’s investment director.

“Today’s results from the UK’s two oil majors are better than expected, both firms are continuing to cut costs and investors will be particularly pleased to see maintained dividend payments as Shell and BP report their third quarter-numbers,” says Russ Mould, investment director at AJ Bell.