Miners lift FTSE 100, Babcock jumps 13% on buyback plan.
Babcock International shares have jumped 13% after the defence business hiked its dividend by 30% and launched its first ever buyback of shares.
The high-flying stock, which has doubled in value this year, rose 138p to 1171p.
The FTSE 100 index rose 21.64 points to 8780.63, with Glencore up 4.8p to 279.9p and Anglo American 18p higher at 2073p.
British Airways owner IAG improved 3.4p to 330.9p and Rolls-Royce put on 9.6p to 918.8p.
Advertising and marketing group WPP fell 5p to 517p after Barclays cut its price target on the stock to 550p, with a new Underweight recommendation.
Halfords boosted by strong cycling market, braced for cost headwinds
07:49, Graeme Evans
Halfords today said underlying profits rose 6.4% to £38.4 million for the year to 28 March, ahead of previous guidance between £32 million and £37 million.
In terms of current trading, it said the cycling market has performed “very strongly” but the tyres market has exhibited further declines.
Chief executive Henry Birch said: “While inflation appears to be moderating and interest rates are falling, the negative outlook for employment and the impact of geopolitical instability continues to weigh on confidence and is keeping the savings ratio high despite rising real incomes.
“However, the year has started as expected and with levers including pricing strategy and further buying synergies we expect to be able to mitigate the substantial cost headwinds that we face in the year ahead.”
He said additional costs incurred in relation to a new warehouse management system mean the current year’s profit performance is expected to be weighted to the second half.
Babcock lifts medium-term guidance, dividend up 30%
07:23, Graeme Evans
Naval dockyards business Babcock International today upgraded medium-term guidance alongside a 17% rise in annual operating profit to £363 million.
The FTSE 100-listed group, which delivers engineering, support and critical systems to defence and civil markets, posted an 11% rise in revenues to £4.8 billion. UK defence accounted for 62% of this figure.
Babcock underlined its confidence in future prospects by upgrading its medium-term guidance, including an operating margin of at least 9%.
It also increased its dividend by 30% to 6.5p a share and launched a £200 million share buyback programme for the first time in its history.
Shares have more than doubled this year against the backdrop of increased defence spending.
Chief executive David Lockwood said: "This is a new era for defence. There is increasing recognition of the need to invest in defence capability and energy security, both to safeguard populations and to drive economic growth.
“Our specialist capabilities are increasingly relevant and, with a growing set of opportunities before us, Babcock is committed to play its part in driving prosperity alongside its customers.”
FTSE 100 lags global markets, Brent Crude price firm
07:03, Graeme Evans
The price of Brent Crude today firmed near to $68 a barrel, having fallen sharply since Monday evening’s Iran-Israel ceasefire announcement.
US markets closed higher for a second session in a row last night, led by a 1.4% rise for the Nasdaq after oil’s price fall boosted the interest rate outlook.
The Dow Jones Industrial Average rose 1.2% and the S&P 500 lifted by 1.1%.
The FTSE 100 index underperformed yesterday due to weaker energy stocks and is forecast to open today’s session unchanged near 8769.
Asia markets are higher, with the Hang Seng index up 0.9% and the Nikkei 225 0.3% stronger.
This article was written by Graeme Evans from The Evening Standard and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.