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“The FTSE100 opened on the front foot following positive sessions on Wall Street and Asia with strong results from Persimmon, BHP Billiton and Antofagasta outweighing the plunge in Provident Financial’s shares,” says AJ Bell Investment Director Russ Mould.
“Sub-prime doorstep lender Provident Financial’s shares plummeted after it ditched its interim dividend, issued its second profits warning in three months and announced that chief executive Peter Crook had stepped down with immediate effect. The group has seen a rapid deterioration in the outlook for the home credit business and there is every likelihood that the full-year dividend will also have to be sacrificed to maintain the highly valuable franchises of Vanquis Bank, Moneybarn and Satsuma. Provident Financial’s shares were down by more than 48.9% in early trading.
“House-builder Persimmon led the blue-chip index after first half pre-tax profits rose by 30% to £457.4m. The housing market remains confident and consumer sentiment is resilient while the potential headwinds of higher inflation are being mitigated by healthy employment levels and a competitive but disciplined mortgage market. Persimmon’s shares were up by over 3%.
“Antofagasta was an early riser following a strong first half with revenues and earnings boosted by higher copper prices and increased sales volumes. Margins have improved and operating costs have been reduced as part of its 'costs and competitiveness' programme. Antofagasta's strategy remains focused on producing profitable tonnes through reducing costs, making improvements in productivity and efficiency and the application of innovative solutions.”
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