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“The impressive rally in the FTSE since late March stops to catch its breath on Thursday, trading flat at 7,538. Gains in the mining, oil and supermarket sectors are offset by weakness in utilities and insurers,” says AJ Bell Investment Director Russ Mould.
Glencore
“Missing first quarter market expectations would often prompt a company to reappraise full year targets. But not in the case of commodities trader-to-mining company Glencore which has shrugged off disappointing production figures versus analyst forecasts for nearly all of its products including copper, zinc and coal.
“Glencore has maintained its full-year production guidance which implies it is going to have some big catching up to do as the year progresses.
“Compounding the pressure on the business is a complex backdrop in which Glencore has faced problems in the Democratic Republic of Congo due to a new mining code and a legal battle regarding unpaid royalty agreements.
“Glencore also recently cancelled a planned exchange of its 8.75% stake in Russian aluminium maker Rusal for shares in London-listed metals group EN+ due to US sanctions against Russian oligarch Oleg Deripaska who controls both companies.
“One could argue that these events aren’t out of the ordinary for the natural resources industry and running a mining business requires as much skills in crisis management as it does in geology and engineering.”
Trinity Mirror
“While you don’t see chief executives say the dog ate their homework, you do regularly see them scramble to blame the weather for disappointing earnings. And that’s certainly the case today with Trinity Mirror.
“Often management will reach for a topical event to mask fundamentally poor trading.
“Trinity Mirror’s circulation revenue has fallen 7% year-to-date with the company ascribing a negative impact to the ‘severe weather conditions in March’.
“Notably its peer Johnston Press made no mention of a hit from the poor weather when it updated on current trading alongside full year results in April.
“Much of the focus for Trinity Mirror in the remainder of this year will be concluding its takeover of the Express and Star titles, a deal which is currently in the hands of the regulators.”
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