Wednesday’s Master Investor Market Report

– The FTSE 100 closed the day at 6,631.00, an increase of 75.72 points.
– The FTSE 250 rose by 124.92 points to finish at 17,512.81.
– The FTSE All Share grew by 38.41 points to 3,618.45.
– The FTSE AIM All Share finished flat at 749.16.

Tullow Oil (TLW) will not pay an interim dividend this year despite its pre-tax loss for the six months ended 30th June narrowing to $10 million (£6.4 million). However, this reduction was largely due to reduced exploration write-offs rather than real changes, and the falling oil price saw revenues decline by 35% to $820 million (£524 million). Shares in the firm dropped by 1.7p to 235.5p.

Supermarket Sainsbury’s (SBRY) has sold its in-store pharmacy business to specialist Celesio for £125 million. Following the deal, the outlets will be rebranded as Lloyds Pharmacy and Sainsbury’s will receive annual rents for the shop space. The purchase is expected to complete in the first quarter of next year. Sainsbury’s shares rose by 2.3p to 261.6p.

Barclays (BARC) posted a 25% increase in profits for the six months ended 30th June on a statutory pre-tax basis. However, net operating income fell by 2% to £12 billion and the company instituted additional provisions against potential litigation resulting from the investigation into Forex fixing. Management said that they are focused on accelerating the bank’s strategy to improve earnings and cut cost ratios. Barclays shares climbed 5p to 284.6p.

Pharmaceutical giant GlaxoSmithKline (GSK) recorded a 6% increase in sales during the second quarter of 2015, clocking in a total of £5.9 billion over the three months as its AIDS portfolio offset falling income from its old workhorse Advair. Expectations had been somewhat suppressed after Morgan Stanley forecast a significant dent in margins, but the actual decline of 240 basis points was not as bad as feared. GlaxoSmithKline shares grew by 46p to 1,374.5p.

High street baker Greggs (GRG) upped revenues by 6% to £398.4 million in the 6 months ended 4th July as customers gobbled up expanded breakfast and reduced calorie product ranges. Profits before tax rose sharply to £25.6 million. Management said that sales comparatives for the second half of the year were more challenging, but that market conditions were very encouraging. Shore Capital repeated a “buy” rating and said that further upgrades to profitability forecasts could be on the way. The shares climbed by 8.5% to 1,285p.

Financial services provider Man Group (EMG) beat forecasts with adjusted profits before tax rising by 89% to $280 million (£179 million) for the six months ended 30th June, despite the company recording net outflows over the course of the period. Funds under management rose by 8% to $78.8 billion (£50.4 billion). Numis reiterated a “sell” rating with a 151p target price and said that Man Group was currently trading well above fair value. Nevertheless, the shares shot up by 11.4p to 162.4p.

Specialist lender Paragon Group (PAG) benefited from strong buy-to-let activity and the acquisition of a mortgage portfolio during the nine months ended 30th June, which led to a 9.8% boost in pre-tax profits to a total of £97.5 million. Analysts commented positively on the results and believe that the company should hit its full year targets, but warned that rising interest rates could have strongly negative effects on the business’s long term prospects. The shares rose 6.3p to 406.2p.

Retailer Pets at Home (PETS) saw its shares drop by 4.8% to 274.1p, after like-for-like revenue growth failed to meet analysts’ expectations. Total sales for the 16 weeks ended 16th July were 6.4% higher than during the same period of the prior year with the principal impetus coming from Advanced Nutrition and Services. The company is continuing to experiment with higher end offerings.

Tomorrow’s news today

AstraZeneca (AZN), Rolls-Royce (RR.), and BAE Systems (BAE) are among the firms that will publish interim results tomorrow.

Quote of the day

“Beware of false knowledge; it is more dangerous than ignorance.”
– George Bernard Shaw