Updates from WPP, Meggitt and Taylor Wimpey
A 35-point fall-back for the FTSE 100 on Wednesday to 7028 points. Supermarket shares received a disproportionate shake, helped by Tesco's worst numbers in its history: Tesco shares tanked more than 5% to 226.65p while Morrisons shares sank 4% to 190.40p. Sainsbury's shares dipped 3.7% to 263p. In contrast, the City welcomed new Rolls-Royce boss Warren East, replacing John Rishton; Rolls-Royce shares surged more than 4% 1048p on the new appointment.
Stateside, the Dow Jones re-crossed the 18,000 threshold, up 77 points to18,038.2, swept along a 4% surge in Visa and a 3% climb for McDonald's. Meanwhile a tech rally helped the Nasdaq reach a 2015 high of 5,035.1.
Let's start with a Q1 update from advertising giant WPP with strong growth from the UK and Asia. Reported revenues climb 8.3% at £2.783bn, down 1.1% at $4.211bn in dollars and up 20.9% at €3.753bn in euros reflecting volatile exchange rates says WPP.
At constant currency revenues were up 7.4%. First quarter profits and margin were well above target. There was good like-for-like revenue growth in all regions and business sectors - except data investment management - from the UK, Latin America, Africa & the Middle East, plus Asia.
A weaker UK pound against a stronger US dollar may, says WPP, "continue to provide some modest currency tailwind, partly offset by a stronger pound against the euro, although a modest impact on profits, unlike the fierce currency headwind in 2014".
We move onto a trading update from engineering aerospace player Meggitt. Trading during the first quarter of 2015 was in line with expectations it claims: organic revenue in civil original equipment and civil aftermarket grew at mid single digit rates.
Stronger than expected organic growth in military revenue was offset by a decline in energy says Meggitt, "where near-term market uncertainties persist". In total, the Group saw organic revenue growth of 4%.
"We expect," says Meggitt, "reported revenue growth will benefit from the favourable effect of the strengthening of the US Dollar against Sterling and the acquisition of Precision Engine Controls Corporation, partially offset by the weakening of the Euro against Sterling."
Finally, a trading update from Taylor Wimpey. Average selling prices of homes in the private order book have increased 14% from last year to approximately £282.9k (2014 week 16: £249.1k), it claims.
Its total order book remains robust at 8,200 homes (2014 week 16: 8,231 homes), excluding legal completions to date, and has increased 24% from the year end, says the house builder.
"The uncertainty surrounding the general election outcome has not impacted customer confidence," says Taylor Wimpey, "and underlying demand remains high. We have had a strong first quarter in a positive trading environment."
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