As traders battled with the London tube strike and awaited the Super Thursday data dump from the Bank of England, leading shares have slipped back in early trading.
But there has been some support from a number of well received company results. Old Mutual has added 5.7p to 224.2p after the insurance group’s half year profits rose 19%.
Satellite group Inmarsat has climbed 19p to 915.5p as it reported a 4% rise in second quarter earnings. It said its third Global Xpress satellite was now due to be launched at the end of August, after delays caused by a failure at its launch rocket partner in May. Analysts at JP Morgan Cazenove raised their target price from 910p to £10.50 with an overweight rating. Nomura said:
Inmarsat has this morning introduced 2015 revenue guidance of $1,250m-1,300m, which we estimate is around 1% below current consensus. Furthermore, Inmarsat states that it is close to finalising several major airline contracts that could provide some comfort today.
Aviva has added 7.5p to 535p as half year operating profits rose from £1.07bn to a better than expected £1.17bn. Goldman Sachs said:
Aviva has reported a strong set of first half results this morning, delivering operating earnings 6% ahead of consensus expectations driven predominantly by a stronger result from life insurance (UK and Asia), in addition to a marginally better general insurance result (Canada). The dividend growth of 15% year on year was strong, as expected. The Friends Life cost synergy delivery is ahead of schedule, with management reiterating its 2015 guidance.
All-in, this is an encouraging set of results; we expect a positive reaction from the shares today.
But RSA Insurance, currently facing a potential takeover from Swiss group Zurich Insurance, is down 7.5p at 516.5p despite better than expected full year profits of £288m.
Overall the FTSE 100 has fallen 17.97 points to 6734.44, ahead of the Bank of England’s latest rate decision, the minutes of the meeting, as well as its inflation report. All this is due at midday.
A number of major companies have seen their shares go ex-dividend. These include BP, down 13.2p at 381.85p, Anglo American, 23.1p lower at 775p and SABMiller, 49.5p weaker at 3393.5p.
Among the mid-caps Tullow Oil has slipped 9.7p to 233.6p as Nomura issued a reduce recommendation with a 200p price target. It said:
We resume coverage on Tullow Oil with a reduce rating based on the following key concerns: 1) Financial leverage rises until the second half of 2016 (despite oil hedges); we forecast net debt to rise to around $4.6bn ($3.6bn at the first half of 2015) by year-end 2016. De-risking the TEN project is on the critical path. 2) M&A probability lower than the market thinks; optimism should be muted given the substantial reinvestment commitment in East Africa and geopolitical risk in West Africa. 3) Continued downside on valuation: our base case value on the forward curve is 200p a share, which implies 20% downside risk. Moreover, the bulk of Tullow’s value lies in contingent resources (160p), with a core net asset value (producing and sanction) of just 20p a share, after adjusting for net debt. The above exacerbates the downside risk given our bearish exploration and production sector view.
Lower down the market controversial Quindell, the insurance claims processor being investigated by the Serious Fraud Office, is currently down 29% to 87.75p after its shares returned from suspension.
