Updates from Royal Mail, Carillion and Utility Warehouse
Another modest climb - up 37 points - to 6,709.1 for the Big Board on Tuesday; a 0.56% surge in total. Tullow Oil was the FTSE 100's biggest gainer, up 3.5% to 475p with BSkyB in second place, up 3% to 890p, helped by reports that Vodafone could resell Sky's Now TV service. Sports Direct Int and Burberry Group also saw sizeable lifts, up 2.4% and 2.3% respectively. In contrast, Rio Tinto and Reckitt Benckiser saw the biggest falls, down 1.7% and 1.6%.
Stateside, yet again, the Dow Jones put on weight, up 40 points to 17,687.8 helped by UnitedhealthGroup and Boeing making 1.7% strong gains.
We start with Royal Mail and a 21% slump in profits - from £233m a year ago to £218m for the six months up to September. UK costs were flat on an underlying basis and Royal Mail says it's expecting a similar performance for the full year, though much will depend on how it performs at Christmas, plus competition from the likes of Amazon.
Royal Mail's management reorganisation programme is expected to deliver cost savings of around £70 million per annum from 2015-16 - more than originally anticipated - with at least £25 million of cost benefits expected in the second half of this year.
"The UK parcels market remains challenging," says boss Moya Greene. "As the pre-eminent UK parcels delivery company, we are targeting a number of new, growing areas, and delivered two per cent volume growth in a competitive market. We had a better than expected performance in UK letters."
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We move onto Telcom Plus, owner of Utility Warehouse. Revenues climb 9% to £267.3m (2013: £245.8m) while adjusted profit before tax climbs 55% to £21.3m (2013: £13.7m). Adjusted earnings per share are up 41% to 21.8p (2013: 15.5p).
Telecom Plus' interim dividend is upped 19% to 19p per share (2013: 16p). Total services supplied climb by 126,537 for the period to 2,033,697 (2013: 1,767,774) it claims.
"We are confident," says boss Andrew Lindsay, "we will deliver record revenues, profits, and earnings per share for the current year. This is reflected in the 19% increase we are making in our interim dividend payment, and our intention to pay a total dividend of 40p for the full year."
Lastly, Carillion says the UK Ministry of Justice has appointed it as its preferred bidder for two contracts to provide services to the National Offender Management Service for public sector prisons in two areas.
The combined revenue from these two contracts is expected to be in the region of £35 million and £40 million a year. One contract will provide services in prisons in London and East of England and the second will provide services in prisons in the South West, South Central, Kent and Sussex.
Mobilisation is scheduled to begin in 2015 with a contract start date of 1 June 2015. Carillion recently won a contract with the UK Highways Agency worth up to £500m over five years.
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