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“The FTSE 100 traded materially higher this morning after positive trading sessions in the US and Asia overnight,’ says AJ Bell Investment Director Russ Mould.
Domino's pizza
“Markets are always looking forward so it is unsurprising that a solid second quarter performance from takeaway pizza firm Domino’s, achieved despite the headwind created by the warmer weather, has been dismissed as investors focus instead on a very cautious outlook in the UK and stuttering progress in the company’s targeted growth avenue overseas.
“Sales and profit increased (at least on an underlying basis) but the level of borrowing may also be causing some concern with net debt trebling year-on-year thanks to heavy investment in the business and returns to shareholders.
“The group’s caution on the UK, which still accounts for more than 80% of revenue, chimes with the tone adopted by many other consumer-facing businesses but the company is seeing little relief internationally either.
“Here the company is still struggling to perfect the same formula which has underpinned its success in the UK.”
Intertek
“The negative market response to first half results from product testing specialist Intertek should be seen in the context of a recent strong run for the shares and a premium valuation.
“Organic revenue, stripping out the impact from any acquisitions, was down a little over 2% thanks to currency headwinds and a weaker contribution from its trade and resources businesses.
“The company is among other things the largest tester of consumer products in the world, with more than 1.000 laboratories in a 100 countries.
“Because these services are often driven by regulation, revenue and in turn profit and cash flow is relatively predictable. This has helped underpin a consistent track record of dividend growth.
“And here at least the company does not disappoint with a new, more generous dividend policy supporting a 36% hike in the payout.”
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