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Another busy day for results but Footsie drifts lower

Volumes have been very low this week, but the FTSE 100 index has generally been in good form on the back of a generally healthy list of corporate results. The statements were somewhat more mixed today, and consequently we have seen the index drift back to stand almost 30 points down mid-morning.

There were contrasting fortunes in the mining sector, with Kazakhmys the biggest faller so far as poor weather and changes in the timing of sales hit its H1 revenue and earnings at the miner. Ferrexpo however had an excellent H1, with revenue and earnings sharply higher.

Full year earnings came in slightly weaker than expected at Diageo due to rising costs and lower consumer spending. Earnings per share for the 12 months to 30 June rose 7%, just below forecasts, but the overall statement was robust as usual and we see this as a core portfolio holding. Star performer Amec raised its margin target for 2010 and said it saw record trading performance in H1 with continuing strength in energy end markets, and the shares probably merit more than a token rise so far.

Elsewhere, the acquisition of rival Alfred McAlpine helped Carillion post H1 results slightly ahead of expectations, SOCO International said it was once again generating operating cash inflows after selling its sole producing asset earlier this year. Aegis achieved what it said was a good result for the half year but said the trading environment was becoming tougher with its revenue outlook for H2 less certain, and this looks a possibility for a short term sell.
 

Head of Research at Blue Index, specialists in trading

28/08/2008

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