FTSE leaps as hopes of recovery rise

FTSE leaps as hopes of recovery rise

Eengineering giant Smiths Group shot down on top of FTSE 100 elevators after the air transport collapse failed to initiate detection activity at airports.
The company announced a 4% drop in pre-tax profits to £ 67million for the six months ending in January, while revenue fell 7% to £ 1.2 billion.

However, revenue exceeded analysts’ expectations, while operating profit of £ 166million was also above the £ 151million forecast by analysts.

Demand for baggage scanners is up 4% from the same period a year ago, despite the coronavirus hammering passenger flights. Screening equipment used at airports accounts for about one-fifth of Smiths’ revenues.

Managing Director Andy Reynolds Smith said, “This is a strong set of results relative to our end markets, with resilient revenue, good profit conversion and excellent cash generation.

“People instinctively expect the detection industry to have taken an absolute knock, but it hasn’t.

“Airports are regulated and they are required to upgrade their systems to the latest standards whether they are operating at full capacity or not.”

Smiths’ dividend was raised 6pc to 11.7p and shares jumped almost 7pc, or 101p, to £ 15.60.

London markets rallied on Friday, erasing losses from the previous session to join a rise in equities around the world after data in the UK and US gave traders a positive outlook for economic recovery global.

Figures show UK retail sales rose 2.1% in February, helped by consumers stocking up on products, including DIY products and garden furniture, before the lockdown was eased in England.

The blue-chip FTSE 100 gained 65.7 points to 6,740.5 for its best session in more than a fortnight, helped by mining and oil stocks.

The trailing Smiths were mining giants Glencore, which increased from 17.5p to 286.4p, Antofagasta who added 71p to £ 16.92; and Anglo-American, up 117.5 pence to £ 28.43. Miners Rio Tinto and BHP Group were also among the top ten elevators.

in the meantime BP added 8.9p to 283.6p, and Royal Dutch Shell added 29.6 pence to £ 14.50. The failed bailout of the container ship stuck in the Suez Canal raised oil, with Brent brut gaining 4.1 bp at $ 64.50 a barrel.

“Markets appear to be working on the assumption that the container ship is likely to be pulled from the canal wall at high tide early next week, and that despite concerns of a third wave in Europe, the recovery global will take any early release, ”said Michael Hewson, chief market analyst at CMC Markets

Elsewhere, Instruments d’Oxford, which makes high-tech tools, jumped 208 pence to £ 20 after saying it expected second-half-year revenue to be “slightly higher” than the £ 317.4million from the last year.

FTSE 250 said it recorded particularly strong growth in its semiconductor division as well as good order growth in Asia, particularly in China.


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