Updates from Royal Mail, Galliford Try and Betfair
Tuesday saw the FTSE 100 climb 41 points to 6,898.1 with drinks giant Diageo the main winner, up 2.5% to 1885p. Gauloises and Golden Virginia maker Imperial Tobacco was up 2.2% to 3063p while arch rival British American Tobacco was also up, 1.9%, to 3663p. Tullow Oil released much of the previous day's gains though, slipping 3.3% to 406.1p.
In the US, the Dow Jones continued to edge up, rising almost 29 points, to 18,047.5. Many eyes on the Greek drama. Meanwhile the Japanese Nikkei hit a new eight-year high today, up 1.2% to 18,199.1, its highest level since 2007.
We commence this morning with an upbeat half-year update from house builder Galliford Try: group revenues climb 35% to £1,085.4m while pre-tax profits are up 12% to £42.5m.
The interim dividend per share is bumped up 47% from 15p to 22p. Net debt is cut to £35.9 million (H1 2014: £85.9 million), despite the increase in the landbank, Galliford Try claims.
"Housing market conditions," says the company, "remain good and we are optimistic about the prospects for a number of recent and forthcoming sales outlets. Our Partnerships business continues to see exceptional demand...in the affordable housing market."
Next, bookie Betfair says subsidiary TVG has bought HRTV horseracing television network from The Stronach Group. TVG now has long-term television rights to the racecourses owned and operated by the company.
Betfair says the move will cost them an initial $25 million payment and says it will pay a further $47.8 million over a seven-year period.
"This deal," says Betfair boss Breon Corcoran said, "strengthens TVG's position as a significant player in the US horseracing industry, bringing together the US' leading racetracks under a single TV network for the first time."
Lastly, Royal Mail says non-exec director John Allan is standing down due to his new position as chairman of Tesco. Yesterday Royal Mail suffered a downgrade with Morgan Stanley clipping its target price by 10p to 340p.
Morgan Stanley attached an Underweight rain to the stock, snipping earnings estimates for 2016 and 2017. Both parcels and letters volumes look difficult due to a still-struggling economy and huge competition.
"We remain concerned," the broker said in a research note, "about the company's ability to generate parcels revenue growth to offset the decline in lettermail. Additionally, our initial assumptions on further efficiencies in 2016 now look too generous."
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