TUI, Rolls-Royce and Acacia Mining

“The FTSE100 softened in early trading with investors focused on a raft of UK inflation figures out mid-morning, and also a string of euro-zone GDP growth updates. The UK's annual consumer-price index is seen coming in not far shy of 2%, which is the Bank of England's target. The country's retail-price and house-price indices will be in focus, as will its producer-price indices,” says AJ Bell Investment Director Russ Mould.

“Travel giant TUI was one of the biggest blue-chip risers in early trading after first quarter losses narrowed and it reiterated its guidance of at least 10% growth in full-year underlying earnings. TUI has agreed the sale of Travelopia, its portfolio of specialist travel brands, to KKR for £325m and is holding talks over the sale of TUI Fly to Etihad. Summer trading is in line with forecasts despite the continued shift away from Turkey to alternative destinations. TUI remains well placed to deal with this shift thanks to its strong group and third party hotel supply chain in Spain, Greece, Cape Verde and other destinations. TUI’s shares were up by more than 1.9%.

“Rolls-Royce’s shares slumped following a record loss of £4.6bn. The jet engine maker has been hit by the fall in sterling since the EU referendum and it has written off £4.4bn from currency-related contracts. The results also include a £671m charge for financial penalties to settle historic bribery and corruption cases involving intermediaries in a number of overseas markets. Operationally the group made good progress on its cost cutting and efficiency programmes although it concedes that more needs to be done to ensure sustainable margin improvements within the business. Rolls-Royce’s shares were down by over 2.4%.

“Acacia Mining topped the FTSE250 board after earnings more than doubled to $415m due to higher revenues and lower operating costs. 2016 was a landmark year for Acacia with record production of 829,705 ounces. This was almost 100,000 ounces ahead of 2015 and exceeded not only the initial guidance range for the year of 750,000-780,000 ounces but also the revised guidance given in October of approximately 820,000 ounces. Acacia’s shares were up by over 7%.”

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