Alliance Pharma shares up on strong international sales
Shares in pharmaceutical firm Alliance Pharma (LON:APH) jumped at market open on Tuesday, after reporting an 8 percent increase in first half sales.
Sales rose to £50.3 million during the period, up from £46.4 million in the first half of 2016.
The group saw a solid performance across all its international growth brands, with scar-reduction product Kelo-Cote, our achieving a 52 percent increase in sales at £6.2 million. Sales of MacuShield rose 67 percent to £3.4 million.
In a statement, Alliance attributed the strong results to favourable currency movements:
“Currency movements benefited sales in the period by approximately £2.6 million due to the weakening of Sterling when compared against the rates for the same period last year primarily of the Euro and US Dollar.
“However, the impact on operating profits will be much smaller due to the increases in cost of goods and operating costs denominated in these currencies.”
Shares in Alliance are currently up 1.50 percent at 53.29 (0927GMT).
Carillion shares jump after being awarded HS2 contract
Troubled outsourcer Carillion (LON:CLLN) has been awarded a contract from the British government to develop the HS2 rail line, one of several contracts announced on Monday.
The company was named as one of the winners after a competitive bidding process, with several large firms competing for the £6.6 billion contracts. Carillion has been awarded two contracts worth a combined £1.34 billion to build tunnels on the central section of the route, between London and Birmingham.
The deal will come as a relief to the company, who have seen shares plunge over the last couple of weeks after a shock profit warning.
In a separate announcement, the company said it had appointed professional services firm EY to support its strategic review, with a particular focus upon cost reduction and cash collection.
The board is undertaking a comprehensive review of the Group’s business and capital structure in the wake of the profit warning, alongside taking immediate action to generate significant cashflow in the short term and achieve a reduction in average net borrowing.
Parity Group shares jump 15pc after profit increase
Technology-focused consultancy Parity Group (LON:PTY) saw shares bounce 15 percent on Monday, after profit for the first six months of the year moved into double figures.
Without giving specific figures, the group said it expects an increase on H1 2016 and for profit to be consistent with the market’s full year expectations.
Parity also confirmed that it had seen a further reduction in net debt, reflecting a positive swing in the Group’s working capital. Net debt as at 30 June 2017 stood at £2.3 million, a decrease from December’s figure of £4.4 million.
Alan Rommel, CEO, commented:
“We are pleased to see the continued momentum in the Group’s performance as we deliver on our strategy of growing our higher margin Consultancy Services division, which enjoys longer term visibility and high levels of client engagement.
“Our strong cash and working capital management has further reduced net borrowing and leaves us well placed to continue to self-fund investment to grow our sales capacity.”
Shares in Parity Group are currently trading up 14.25 percent at 1043 (1039GMT).
Weir Group shares jump 8pc on positive trading update
Weir Group (LON:WEIR) shares jumped nearly 10 percent on Monday morning, after a trading update showed strong performance in their oil division.
The resource-focused engineering group said a quicker-than-expected recovery in the North American markets had a positive impact on performance, with “higher levels of frack fleet utilisation and significant tightening of industry capacity are both benefiting the Group’s Oil & Gas division.”
“As a result, it has seen increased volumes, stronger operating leverage and modest pricing recovery ahead of prior expectations, and has delivered low double-digit operating margins in the first half”, the group said in a statement on Monday.
The positive update comes after the group took a cautious tone at the beginning of the year, after a year of weak oil prices took its toll on company results.
Shares in Weir Group are currently trading up 8.28 percent at 1,975.00 (1020GMT).
Chinese growth hits 6.9pc in Q2
The Chinese economy grew at a rate of 6.9 percent in the second quarter, according to the latest government data released on Monday.
This was a faster pace than expected and above the government’s growth target. The figure was the same as the first quarter of 2017, and 0.1 percent above analysts’ projections.
The official data showed strong performance across all sectors; property investment also rose by 8.5 percent in the first half, an improvement on the same period in 2016.
Industrial output for June grew by 7.6 percent, well above the forecast of 6.5 percent, and retail spending rose by 11 percent compared to June the previous year. The figures are encouraging for the Chinese government, who are currently dealing with debt levels of 277 per cent of GDP.
Royal Mail shares fall as company offers new pension plan
Royal Mail (LON:RMG) became the biggest faller on the FTSE 100 on Friday, with shares dropping more than 2 percent after the company offered workers a new pension plan.
The offer came after significant union opposition to Royal Mail’s decision to close their defined benefit pension scheme, which pays out based on workers’ final salary and length of service.
The company have struggled financially with the weight of this type of pension plan, and are now offering workers a choice between a defined-benefit and a defined-contribution scheme.
“Royal Mail is one of few companies offering to replace one defined-benefit scheme with another,” the company pointed out.
“Royal Mail believes that the risk to the company of the proposed defined benefit cash balance scheme would be materially lower than under the current plan and is a manageable risk,” it said.
Royal Mail have said the new plan is likely to cost about £400 million annually, a significant cost-saving on the £1 billion it would cost to keep the original final salary pension scheme running.
Royal Mail shares are currently trading down 2.26 percent at 401.70 (1334GMT).
JP Morgan and Citigroup kick of US banks’ earning season
The US banks’ earnings season kicked off on Friday, with JP Morgan reporting a 13 percent rise in profits in the second quarter.
Profits at the US’s biggest bank rose to $7 billion over the last three months, ahead of analysts expectations. Higher interest rates and loan growth offset a drop in trading revenue, with net income rising 13.4 percent to $7.03 billion over the period.
Chief Executive Jamie Dimon said in a statement that the bank “continued to post very solid results against a stable-to improving global economic backdrop.”
“The U.S. consumer remains healthy, as evidenced in our strong underlying performance in consumer and community banking,” he concluded.
Citigroup income falls despite higher revenues
Citigroup also reported its second quarter earnings on Friday, with the bank raking in a net income of $3.9 billion on revenues of $17.9 billion. Profits fell 3.2 percent on the back of a Brexit-related decline in trading revenue, with net income falling net income falling from $4.00 billion the previous year to $3.87 billion. Earnings per share rose to $1.28, above analysts expectations.FCA proposing rule changes to attract Aramco listing
The City’s watchdog came under fire on Thursday for its controversial plans to change stock market listing rules, in order to allow Saudi oil firm Aramco to list on the London exchange.
The Financial Conduct Authority (FCA) is proposing to change current listing rules, adding a new category that would relax the requirement for ‘premium’ companies, including the Saudi state-owned Aramco, to list on the London Stock Exchange.
Global markets are fighting over who will win the listing of Saudi Arabia’s oil firm Aramco, which is thought to be the world’s biggest flotation with a value of $2 trillion. Aramco are aiming to float a 5 percent stake on the market, a far smaller portion than the 25 percent normally requested by London listing rules.
However, critics have called the idea of bending the rules “inappropriate”. Ashley Hamilton Claxton, corporate governance manager at Royal London Asset Management, told CityAM:
“It looks like the FCA is consulting on amending the existing listing rules to accommodate the peculiarities of one company, which is not a very effective strategy for regulating the market as a whole. If the proposals in this consultation document are implemented, it will be bad news for London and will reverse the progress we have made in recent years to uphold strong governance and protect minority shareholders.”
Delta Air Lines shares fall as salary increases impact profits
Shares in American airline Delta (NYSE:DAL) fell on Thursday, after announcing a 20 percent fall in profits for the 2017 financial year.
The group made a profit of $1.22 billion over the past 12 months, a fall of just over 20 percent from last year’s figure of $1.55 billion.
This came despite a 2.5 percent increase in passenger unit revenue, and a 0.4 percent larger capacity in the second quarter of 2017. The airline had to contend with a rise in operating expenses during the final quarter, as higher salaries and fuel costs dug into profits.
“The June quarter represented the peak for non-fuel cost pressures this year and we expect our CASM (cost per available seat mile) trajectory to moderate to approximately 2 percent for the September quarter,” Delta Chief Financial Officer Paul Jacobson said in a statement.
Delta Air Lines is the second largest US airline by passenger traffic, and have consistently stayed clear of competing as a budget airline. Instead, it has marketed itself “a carrier of choice”, with better service, seating, in-flight entertainment and loyalty programmes.
Shares in Delta sunk on Thursday, and are currently trading down 1.10 percent at 54.86 (1515GMT).
Oil prices sag after Aramco chief warns on lack of investment
Oil prices fell on Monday after Aramco chief Amin Nasser warned that low investment in the industry could lead to a supply shortage.
The oil industry has lacked investment of late as money is poured into the development of alternative energy sources. However, Nasser said it was ‘premature’ to assume that shale oil and alternative energy resources can be developed quickly to replace oil and gas”
“New discoveries are also on a major downward trend. The volume of conventional oil discovered around the world over the past four years has more than halved compared with the previous four,” Nasser said.
WTI Crude is currently down 0.88 percent at $43.84, with Brent Crude down 0.77 percent at $46.35 (1046GMT).