Another strong close from U.S markets last night has provided the springboard for the FTSE to edge higher this morning ahead of the thanksgiving holiday , with positive starts for Rio Tinto and Thomas cook eclipsing continued concerns for mainland Europe from Kingfisher and Wolseley statements. EU confidence and German Unemployment provided little excitement, with both numbers in line with forecasts.
A thumbs up to a new growth plan from Rio Tinto highlighting reduced expansion costs was enough to put the mining sector on a positive footing and help lift the resource heavy FTSE 100
higher in early trade. Rio has shelved a number of new projects for now, instead concentrating efforts on the expansion of existing mines to reach output targets.
Q3 profits at home improvements firm Kingfisher came in at the lower end of estimates, with the firm remaining cautious on its French businesses. Profits were £271m, with average estimates around the £280m mark. France accounts for around half of profits at the firm, a position few would envy in the current environment and the outlook doesn’t look much better with shopper confidence “weak with no obvious signs of improvement” according to chief exec Ian Cheshire. Although profits from French stores were roughly unchanged, they were down 5.6% on excluding currency shifts.
The remarkable change of fortunes at Thomas Cook continued today with both operating profits and stock price surging higher. Full year operating profits are up 49%, with the firm also raising cost cutting and revenue targets. The stock flew over 11% in early trade, stretching full year gains to 304% and counting. I doubt the most optimistic shareholder could have predicted such a run late last year when it looked like the tenure of the worlds’ oldest travel firm was all but over.
Wolseley, the plumbing specialist, reported a 9% rise in trading profit to £218million this morning as UK and US stores continued perform strongly, albeit with the now all too familiar warning from UK firms, that market conditions in continental Europe remain tough with no forecasted improvement. As a result the share price dipped back under 2 month highs posted yesterday, as profit taking weighs on the price after a 5% rally since Monday.
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