Defence group Babcock dominated the FTSE 250 leaderboard with its positive outlook and the announcement of a reinstated dividend. The company, known for building aircraft carriers for the Royal Navy at its Rosyth shipyard in Scotland, aims to achieve a revenue growth of at least 5% over the next three to five years. In the year ending March, their revenue increased by 8% to £4.4 billion. Babcock also confirmed its plan to distribute a dividend at the end of next year, marking the first dividend payout in three-and-a-half years. As a result, shares surged by 14.6% to 361.6p.
However, Babcock experienced a setback with the contract it won from the Ministry of Defence (MoD) in 2019 to build five Type 31 frigates for the Navy. The company announced a one-off hit of £100 million due to escalated costs, resulting in a significant reduction in profit for the year ending March, from £182.3 million to £6.2 million. In April, Babcock initiated a formal dispute process with the MoD regarding these costs and warned that it might need to set aside between £50 million and £100 million.
The FTSE 100 index rose by 0.8%, or 57.85 points, reaching 7646.05. However, the FTSE 250 index experienced a slight decline of 0.1%, or 10.79 points, settling at 19,311.73.
Vistry, a housebuilder, reported a mixed set of results as it warned of a market slowdown due to higher mortgage rates posing challenges for first-time buyers. The company built 2,847 homes in the first six months of 2023, down 22% compared to the same period the previous year. Despite this, Vistry reaffirmed its forecast of exceeding £450 million in profit for the year, causing shares to dip slightly by 0.2% to 789p. Conversely, Dunelm ended its financial year on a positive note with fourth-quarter sales surging by 6% to £381 million and full-year sales increasing by 6% to £1.6 billion. The company expects its full-year profit to surpass the analysts’ projection of £188 million, resulting in a 1.5% increase in shares to 1130p.
Portmeirion, the pottery firm, predicted a decline in sales and profits due to cautious North American retail customers amid economic uncertainty. Their sales for the first half of the year are expected to reach £44 million, a decrease of 3% compared to the previous year. The company also revealed that results for 2023 would fall below analysts’ expectations of £113 million in sales and £9.3 million in profit. As a result, shares plummeted by 25.6% to 294p.
Scottish battery cell maker AMTE Power issued a warning that it could face administration and the suspension of its shares from trading on AIM unless it secures additional funding. The company emphasized the critical nature of its financial situation and the need for a solution in the coming days. Failure to secure more cash may result in shareholders losing their investments, causing shares to plunge by 47% to 4.38p.
Hikma Pharmaceuticals experienced a boost in shares after a tornado damaged a facility owned by its competitor Pfizer. Traders responded by raising Hikma Pharmaceuticals’ shares by 5.7% to 2063p.
Anglo American celebrated the successful ramp-up of its new copper mine in Peru, resulting in an 11% increase in production compared to the same period last year. On the other hand, Antofagasta reduced its copper production targets due to water shortages in drought-affected Chile, and Rio Tinto fell short of its iron ore targets. Consequently, Anglo American’s shares rose by 3.3% to 2380p, Anto-fagasta by 2.7% to 1526p, and Rio Tinto by 1.5% to 5174p.
Private equity firm 3i saw an increase in its net asset value by 4.1% to 1814p in the three months ending June. Attention was particularly focused on Action, the discount retailer that comprises the majority of 3i’s investment portfolio. The company reported a staggering 33% increase in sales to £4.5 billion in the six months leading up to July. However, despite this remarkable performance, shares experienced a marginal decline of 0.2% to 1950p.
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