One of London’s less fashionable stocks was in demand after it defied recent profit warnings issued by peers. Lavendon, which rents out heavy equipment and is best known for its cherry pickers, posted a chunky rise in half-year results.
With profits up 18 per cent to £14.5 million in the six months to June 30, helped by strong growth in the Middle East, management and City analysts were confident about the outlook for the second half.
Rivals Speedy Hire and HSS Hire — which this week issued its second profit warning since floating in February and whose shares have slumped by about 68 per cent since — have been industry laggards.
Analysts at Panmure Gordon said Lavendon’s robust results were down to a greater reliance on overseas profits “without which there would have been little growth”.
“This has already been reflected in Lavendon’s relative share price outperformance for the year to date but we believe there is further to go,” Andy Smith, at Panmure, told clients. The shares gained 10p, or 6 per cent, to 176p, heading back towards this year’s highs above 200p. HSS Hire dipped 2p to 67p and Speedy Hire ticked up a penny to 47¾p.
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Ahead of the bank holiday weekend, the wider market ended August’s final session on a positive note, regaining losses suffered in a turbulent week. After a late-session rally, the FTSE 100 closed up 55.91 points, or 0.9 per cent, at 6,247.94, up almost 1 per cent on the week before.
However, the index is 12 per cent lower than April’s record and has fallen 6.7 per cent this month, its worst monthly performance since May 2012.
Although traders are cautious after volatile swings in global equities, another rally on Wall Street on Thursday and bounce on the Shanghai Composite improved sentiment.
In an index heavily-weighted towards energy stocks and contingent on China’s fluctuations, miners and oil majors once more held sway. BHP Billiton, the world’s biggest miner, regained 29½p to £11.32. The industry was buoyed also by Carl Icahn, the US activist investor, revealing an 8.5 per cent stake in Freeport-McMoRan, the oil and mining group.
The sharp rebound in the price of Brent crude, the international benchmark, which jumped by the most in six and a half years on Thursday, continued and oil bounced above $49 a barrel amid signs of a strengthening US economy, lower oil inventories and some short covering. Royal Dutch Shell B shares rose 47p to £17.06½p, BG Group, combining with Shell in a megamerger, rose 32¾p to 994½p and BP 9¼p to 360½p.
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The Footsie’s biggest riser was Inmarsat, rocketing 45½p to 981p, after the satellite operator launched its third Global Xpress satellite, which will help to deliver faster broadband, from Kazakhstan. Shares in Inmarsat, which re-entered the Footsie last time, were hit by a delay in May.
One blue chip that flirted with demotion from the leading index earlier this year and is again languishing near the bottom ahead of next week’s latest quarterly reshuffle shrugged off mixed broker research. Wm Morrison edged up ½p to 168½p, despite Jefferies trimming its price target from 230p to 210p before the supermarket chain’s interim results on September 10, the first opportunity for David Potts, the newish chief executive, to set out his stall.
Elsewhere on the high street, Next was downgraded by Credit Suisse to “underperform” from “neutral”, which raised concerns about a slowdown in the near and medium term at the retailer, arguing, among other things, that its directory business is “looking increasingly mature in the UK”. Next also shrugged off the bearish research to add 15p to £79.45.
AstraZeneca, up 36p to £41.20, was given support by Pascal Soriot, chief executive of the drugs group, buying 76,000 shares at £39.60 a pop.
In the mid-caps, where the FTSE 250 regained 184.41 points, or 1.09 per cent, to 17,106.36, higher oil prices also drove stocks higher. Hunting, the oil services group, rose another 27½p to 518p amid consolidation in the industry and reheated speculation this week that it had previously attracted takeover interest.
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Finally, back with shops, Debenhams tumbled 5¾p to 75¾p, the biggest faller, on a downgrade from UBS to “sell” that argued: “Debenhams is a business that has accepted the need for change but appears to be struggling in the execution”.
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