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LONDON (Alliance News) - London stocks opened higher Thursday, with corporate news driving the moves in early trade, while investors expect the European Central Bank to make no changes to its monetary policy in its meeting later in the afternoon.
The FTSE 100 index was up 0.8% at 5,721.57 points, the FTSE 250 up 0.9% at 15,787.90 and the AIM All-Share up 0.3% at 676.24. In Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were both up 0.3%.
Pearson was the best performer in the FSTE 100 shortly after the open, up 9.5%. The education publisher trimmed its guidance for calendar 2015 and outlined plans to further simplify its business, which will hit its operating profit in 2016. The company now expects to report adjusted earnings per share of between 69 and 70 pence for 2015, down from its previous guidance of the lower end of a range of 70p to 75p.
Pearson also outlined guidance for 2016, saying it expects to report adjusted earnings per share before restructuring costs of between GBP580 million and GBP620 million, down from the approximately GBP720 million it is now guiding for 2015, and earnings per share of between 50 and 55 pence.
However Pearson said it expects to propose a total dividend for 2015 of 52 pence per share, up from the 51p it paid in 2014. It said it plans to sustain its dividend at this level whilst it rebuilds cover.
Shares in Royal Mail were up 2.1%, after the postal operator said its revenue edged higher in the first nine months of its financial year, helped by a strong performance from its GLS logistics business and a continued pattern in the UK of revenue shrinking from letters but growing from parcels.
The FTSE 100-listed company said its group revenue for the nine months to December 27 was up 1.0%. The group said its UK revenue was down 1.0% overall, with a 1.0% rise in parcel revenue offset by a 2.0% fall in letters revenue.
Royal Mail said the trends in its parcels business were broadly similar in the third quarter as in the first half, with volume growth driven by its account parcels business and Parcelforce Worldwide. Addressed letter volumes fell again, while total letter revenue also was dragged down by a continuing change in its revenue mix.
ITV was down 0.8% after UBS initiated the London-listed broadcaster with a Sell recommendation.
In the FTSE 250, Halfords Group was the top gainer, up 9.0%, after it reported growth in revenue in the third quarter of its financial year, boosted by a strong performance at its autocentres, a return to like-for-like growth in cycling, and a record day for sales over the Black Friday weekend.
The car parts and bicycle retailer said total group revenue in the 15 weeks to January 15 grew 0.4% year-on-year, as 4.1% growth in autocentres offset a 0.3% decline in retail. In the 41 weeks to the same date, total group revenue rose 1.3% as autocentres increased 4.4% and retail was up 0.8%.
On a like-for-like basis, group sales grew 0.3% in the quarter with autocentres up 1.9% and retail remaining flat, while group like-for-likes in the 41 weeks rose 1.2% with autocentres up 2.8% and retail up 0.9%.
Halfords said there is no change to its pretax profit expectation for the full year, which is expected to be in the range of GBP78 million and GBP82 million.
Shares in N Brown were up 8.6% after the group reported growth in revenue in the third quarter of its financial year, driven particularly by its three 'Power Brands' and over the cyber weekend in November.
The online, catalogue and stores retailer, which trades under multiple brands including House of Bath, SimplyBe, Jacamo, and figleaves.com, said group revenue in the 18 weeks to January 2 grew 4.1% on the same period the year before, with like-for-like sales also growing 4.1%. Of this, product revenue rose 4.3% and financial services revenue increased 3.7%.
N Brown said its three 'Power Brands' SimplyBe, Jacamo and JD Williams, each performed strongly recording double-digit growth in the period.
Countrywide shares added 6.4%. The estate agent said its now expects its underlying earnings for 2015 will be slightly ahead of its expectations and maintained its guidance for 2016, even as it continued to feel pressures from the slowdown in the London property market.
The company said it saw an encouraging performance in the fourth quarter of 2015, even as it continued to face pressures from a slowdown of housing transactions, particularly in the capital. Countrywide added that, despite recent UK legislative changes that affect buy-to-let landlords, it continues to view the private rented sector as a key growth area for the future.
The European Central Bank releases its monetary policy decision at 1245 GMT, while ECB President Mario Draghi will hold a press conference at 1330 GMT.
Analysts expect the ECB to hold after its meeting, and will instead allow the easing measures put in place in December to feed through before implementing more, even though they were somewhat disappointing for analysts.
However, with the accounts from that meeting showing that some Governing Council members wanted a more aggressive cut in deposit rates than was agreed, the ECB is expected to become even more doveish in the second quarter of the year.
"No change in policy is expected after stimulus was increased only last month, when the deposit rate was cut to -0.30% and the asset purchase programme was extended by six months to March 2017," said Lloyds Bank.
"Markets will be listening closely to comments from President Draghi at the press conference. Since the last meeting in December, downside risks to the inflation outlook have increased. As such, Mr Draghi will reiterate that the door remains open for more policy easing in the future," added Lloyds.
Also in the economic calendar, the World Economic Forum holds its second day in Davos, Switzerland. UK Prime Minister David Cameron and Greek Prime Minister Alexis Tsipras will be speaking.
In the US, initial and continuing jobless claims data are due at 1330 GMT, while the Energy Information Administration releases its crude oil stocks data at 1600 GMT.
By Daniel Ruiz; danielruiz@alliancenews.com
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