Thursday’s Master Investor Market Report featuring WPP, Taylor Wimpey, Sirius Minerals and William Hill

• UK Government borrowing dropped to £7.4 billion in March, more than £400 million lower than in the same month of 2014. The total for the year so far now stands at £87.3 billion, well below the Office for Budget Responsibility’s £90.2 billion estimate and a drop of £11.1 billion against the comparative period. While the deficit as a percentage of GDP has been more than halved to 4.8% from the 2009/10 financial year when the coalition took power, the Institute of Directors raised concerns that “all the major political parties have talked about the importance of fiscal responsibility. However, they are reluctant to give even the broadest of details about how they are proposing to eliminate the deficit”.
• US and UK regulators have handed out fines totalling $2.5 billion (£1.66 billion) to Deutsche Bank in relation to the bank’s role in a scheme to fix rates on foreign exchange markets. The firm said that no members of its management board were involved or aware of the misconduct at the time and that it had significantly strengthened its controls. The FCA said that “one division at Deutsche Bank had a culture of generating profits without proper regard to the integrity of the market. This wasn’t limited to a few individuals but, on certain desks, it appeared deeply ingrained.” It added that “Deutsche Bank’s failings were compounded by them repeatedly misleading us. The bank took far too long to produce vital documents and it moved far too slowly to fix relevant systems and controls”.
• The FTSE 100 closed up by 25.43 points at 7,053.67 points; the FTSE 250 grew by 49.18 points to 17,684.73; the FTSE All Share advanced 12.84 points to 3,808.20; and the FTSE AIM All Share slipped 1.43 points to 749.51 points.

Marketing and public relations giant WPP (WPP) reported revenues of £2.78 billion for the 3 months ended 31st March, up by 8.3% in sterling terms over the comparative period, with like-for-like growth in all divisions except data investment management. Market conditions remain somewhat challenging with many clients still focused on cost control and restricting advertising budgets, which has led to a slowdown in sales growth. The shares declined by 24p to 1,572p.

ADVERTISEMENT

Housebuilder Taylor Wimpey (TW.) said that trading has remained strong during the spring sales season with an affordable mortgage environment and strong buyer sentiment helping to generate slightly improved sales per outlet relative to 2014. The total order book is up by 12% at £1.9 billion and average selling prices for homes have risen by 14% to £282,900. Disruption from current events is less than expected and analysts from Jefferies said that “Taylor Wimpey has seen a strong first quarter and so far the election has not led to a reduction in demand. With Help to Buy running very smoothly and cross party political consensus that we need more houses, the electorate are currently voting with their feet and buying houses”. Taylor Wimpey shares grew by 1.40p to 165.7p.

UK-based potash developer Sirius Minerals (SXX) had is shares suspended today, pending a public meeting of Redcar and Cleveland Borough Council to discuss its planning permission application for the York Potash mine and related transit requirements. The council voted unanimously in favour of the project, meaning that there are only two required permits outstanding. WH Ireland’s Paul Smith commented, “we feel that the York Potash project has proved that it in principle it can pass through the high thresholds set by the authorities and the public”. Sirius Minerals shares rose by 1p to 14p.

Bookmaker William Hill (WMH) saw group operating profits for the first quarter of 2015 fall by 19% after the company posted its largest ever weekly loss in the third week of January following a string of unfavourable sporting results and the increase in UK Machine Games Duty. Overall revenues were up by 1%. Greg Johnson, an analyst at Shore Capital, said that the results were a “pretty mixed bag, with the comments around “yet to recoup the £14m shortfall from week 3” suggesting modest downside to our forecasts of £267m”. However, he retained an overall positive stance on the company. The shares dropped by 11.1p to 361.2p.

Tomorrow’s news today

AstraZeneca (AZN), Spectris (SXS) and Record (REC) will be among the firms publishing updates and results tomorrow morning.

Quote of the day

“I never learn anything talking. I only learn things when I ask questions.”
― Lou Holtz