United Utilites profits fall 18%, Betfair merger on track
London open
London's FTSE 100 index is predicted to open 24 points higher after the lower finish on Tuesday, according to traders in the City.
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United Utilities upped its interim dividend by a quarter of a penny at the end of a half-year period where profits were crunched by new regulated price controls. Revenue of £857.0m in the six months to 30 September, slipping less than 1%, but operating profits were down 18% to £278m, reflecting the compensation paid to the 10% of customers affected by a water-born parasite in the summer.
After a five-year holiday, Thomas Cook reported its first profit after tax since 2010, following a marginal 1% lift in group revenue over the previous year to £7.83bn, with underlying EBIT up 11% to £310m. “Despite turbulence in some of our destinations, the underlying business performed in line with our plans at the start of the year, demonstrating its greater resilience”, said chief executive Peter Fankhauser.
A boost in mobile betting has seen Betfair’s revenue and profit grow for the first half of the year, despite being compared to a FIFA World Cup year. The FTSE 250 company, which is due to complete its merger with Paddy Power in the first quarter of next year, released interim results for the six months to 31 October showing revenue up 15% to £274.4m, raised by 93% growth in sportsbook volumes.
Newspaper round-up
MPs have demanded an investigation into possible manipulation of the electricity market, after it emerged a power plant reduced its output ahead of a supply shortage and then charged far higher prices to generate again. The chairman of the Energy and Climate Change select committee said it would write to regulator Ofgem asking it to examine “potential abuses of the system” after concerns were raised about the high prices National Grid had to pay one generator, Calon Energy, to help keep the lights on across the UK at the start of November. – Telegraph
One of the biggest shareholders in Royal Dutch Shell has thrown its weight behind the oil group’s £43 billion takeover of BG Group, despite mounting concerns about the impact of plunging oil prices on the commercial logic that underpins the deal. The Qatar Investment Authority, the sovereign wealth fund that holds a stake of up to 2% in the Anglo-Dutch group and also is a shareholder in BG, is understood to be “fully supportive” of the proposed transaction, which was announced in April. – The Times
A senior executive fired by Barclays Bank over attempts by it and others to rig the foreign exchange markets has resurfaced running the electronic trading platform at Icap, Michael Spencer’s interdealer broker. Tim Cartledge was head of global fixed-income currencies and commodities electronic trading at Barclays from last year until May, when he was sent on gardening leave. He has been made chief strategy officer at Icap’s EBS BrokerTec electronic foreign exchange and fixed income business. – The Times
US close
US stocks eked out small gains on Tuesday, reversing early losses on the back of geopolitical concerns amid strength in the energy sector.
Stocks had kicked off the session in the red as it emerged that a Turkish military jet had shot down a Russian warplane near the Syrian border, after it had allegedly entered Turkish airspace and ignored warnings to return.
But stronger oil prices lifted energy shares, helping US equities to end mostly in the black, with the Dow Jones Industrial Average and the S&P 500 ending up 0.1%, while the the Nasdaq closed flat.