FTSE 100 movers: Mondi moves ahead; IAG descends

Shares in paper manufacturer Mondi on Friday led the FTSE 100 risers as the firm reported a 6% rise in interim pre-tax profits of €490m (£436m) due to higher average selling prices and solid demand across its packaging businesses.

Underlying earnings before interest, tax, depreciation and amortisation came in at €852m, up 17%, with margin of 22.9%. Underlying operating profit rose to €630m up from €503m in 2017.

Basic underlying earnings per share were 89.2 cents per share, up 26% and the interim dividend was increased by 12% to 21.45 cents a share.

Chief executive Peter Oswald said Mondi continued to make good progress in securing future growth and ensuring the ongoing cost competitiveness through the delivery of its major capital expenditure programme of more than €750m, which is expected to contribute to earnings from 2019.

A leaner and meaner Rolls-Royce said full year profits and cash flow should be towards the higher end of expectations but that it had taken a £554m exceptional charge due to problems with its Trent 1000 aeroplane engine.

The news sent the shares higher as Rolls added that a strong first half for its civil aerospace and power systems businesses led to underlying profits swinging back into the black, with a core £146m operating profit and 3.1p earnings per share, as core revenues grew 16% to £6.68bn in the first six months of the year.

Chief executive Warren East said progress had been made with plans to simplify the group into three business units after selling its fuel injection and commercial marine businesses.

Along with the civil aerospace arm, an enlarged defence business now includes naval, submarine and defence aerospace businesses, with the third being Germany-based power systems that now includes the civil nuclear unit. For the first half, civil aerospace revenues rose 26%, power systems by 13% while defence was pretty much flat.

The restructuring, which will mean the axing of 4,600 jobs, comes with a target to achieve annual run-rate savings of £400m by the end of 2020.

Royal Bank of Scotland were firmer as the bank declared its first dividend in 10 years despite a mixed set of first half results, but generally beating City forecasts.

The taxpayer-owned bank reported an profit attributable to shareholders of £888m for the first six months of the year, which was down 5.4% on last year. Operating profits in the second-quarter halved to £613m compared to the first quarter and the second quarter last year, but this was much better than expected, with City analysts having pencilled in a loss of £340m.

Statutory profits of £1.8bn included £810m of net litigation and conduct costs, including £1bn taken in the second quarter in respect of the US penalty to the US Department of Justice over misselling of mortgage-backed securities and £350m of restructuring costs.

Earlier, stocks across Europe started on the front foot on the back of Apple's ascent to becoming the first $1trn company, which lifted the tech sector and enabled a positive finish on Wall Street.

The US tech spike gave a boost to Scottish Mortgage Investment Trust, which is predominantly invested in US and Chinese digital stocks, although has no large direct exposure to Apple.

International Consolidated Airlines Group reported a strong increase in profits at the half-year stage, but not enough to satisfy demanding investors as the shares fell.

Willie Walsh, chief executive of the British Airways and Iberia owner, also told BBC radio that IAG remained interested in low-cost, long-haul carrier Norwegian Air after two failed approaches earlier this year.

The FTSE 100 group reported second quarter operating profit of €835m before exceptional items, up from a restated €790m a year earlier but short of the €848m consensus. There was a net foreign exchange operating profit impact of €66m.

The company’s operating profit before exceptional items for the half year was €1.12bn, up 17.4% from last year’s restated €950m.

AstraZeneca was lower despite the European Medicines Agency (EMA) granting orphan designation to selumetinib, a MEK 1/2 inhibitor, for the treatment of neurofibromatosis type 1 (NF1) an incurable genetic condition that affects one in 3,000 newborns worldwide.

Market Movers

FTSE 100 (UKX) 7,634.42 0.77%

FTSE 100 - Risers

Mondi (MNDI) 2,209.00p 6.61%
Rolls-Royce Holdings (RR.) 1,097.00p 3.69%
Scottish Mortgage Inv Trust (SMT) 548.00p 3.10%
Royal Bank of Scotland Group (RBS) 257.80p 3.08%
United Utilities Group (UU.) 725.20p 3.04%
Micro Focus International (MCRO) 1,234.50p 2.83%
Standard Chartered (STAN) 691.30p 2.60%
Smith (DS) (SMDS) 504.20p 2.52%
InterContinental Hotels Group (IHG) 4,724.00p 2.25%
Rentokil Initial (RTO) 326.90p 2.16%

FTSE 100 - Fallers

International Consolidated Airlines Group SA (CDI) (IAG) 666.00p -2.77%
BAE Systems (BA.) 626.60p -1.10%
GVC Holdings (GVC) 1,129.00p -0.53%
Morrison (Wm) Supermarkets (MRW) 259.90p -0.46%
Compass Group (CPG) 1,626.00p -0.43%
AstraZeneca (AZN) 5,797.00p -0.22%
Royal Dutch Shell 'B' (RDSB) 2,579.00p -0.21%
Sky (SKY) 1,516.50p -0.20%
Reckitt Benckiser Group (RB.) 6,794.00p -0.09%
Royal Dutch Shell 'A' (RDSA) 2,530.00p -0.06%