LONDON MARKETS: FTSE 100 Led Higher By Miners As Provident Plunges Almost 60%
22 August 2017 - 6:35PM
Dow Jones News
By Carla Mozee, MarketWatch
Provident Financial drops almost 60% after second profit
warning
U.K. stocks were on track to snap a three-session losing streak
Tuesday, bolstered by gains for miners and home builder Persimmon
PLC after well-received financial updates.
But Provident Financial PLC shares lost nearly 60% of their
value after the doorstep lender issued its second profit warning in
three months.
The FTSE 100 rose 0.7% to 7,366.50, with all sectors moving
higher, led by the basic materials group.
Miners cheer: Mining heavyweights BHP Billiton PLC and
Antofagasta PLC were among the top performers on the blue-chip
benchmark.
BHP shares climbed 2.9% (BLT.LN) (BHP.AU) (BHP.AU) after the
company said it's planning to sell its onshore U.S. oil and gas
operations
(http://www.marketwatch.com/story/bhp-billiton-looks-to-sell-us-shale-operations-2017-08-21).
The decision followed a push by activist investor Elliott
Management in favor of the move.
BHP also said its final dividend will rise threefold. The miner
swung to a yearly net profit of $5.86 billion, but that was weaker
than anticipated.
Antofagasta shares (ANTO.LN) were up 2.9%. The copper miner more
than tripled its interim dividend payment
(http://www.marketwatch.com/story/antofagasta-profit-surges-to-triple-dividend-2017-08-22)
after reporting a sharp rise in half-year earnings.
Provident shift: But shares of Provident Financial (PFG.LN)
tumbled 57% after the lender said it expects to lose between 80
million pounds and GBP120 million in the third quarter. The profit
warning
(http://www.marketwatch.com/story/provident-warns-on-profit-again-ceo-to-leave-2017-08-22),
the second in three months, comes after Provident shifted to using
full-time "customer experience managers" rather than self-employed
agents in its home credit business.
"The previously announced dividend is being withdrawn and
investors shouldn't expect anything until we see significant
improvements. The 5.5% dividend yield was really the last leg
holding the stock up, but this key support has now gone," said ETX
Capital senior market analyst Neil Wilson in a note.
Provident also said Peter Crook has resigned as its chief
executive.
Stock movers: Meanwhile, Persimmon (PSN.LN) gained 2.9%. The
home builder said its first-half profit rose 30%
(http://www.marketwatch.com/story/persimmon-profit-up-30-on-higher-house-prices-2017-08-22)
to GBP457.4 million as it sold more houses at higher prices.
Shares of supermarkets were mixed after Kantar Worldpanel said
Britain's four largest grocers logged growth in sales in the 12
weeks ending Aug. 13, a fifth consecutive increase. Tesco PLC
(TSCO.LN) added 1.8% and Wm Morrison Supermarkets (MRW.LN) put on
0.7% but J Sainsbury PLC (SBRY.LN) shed 0.3%.
The pound bought $1.2855, up from $1.2900 late Monday in New
York.
(END) Dow Jones Newswires
August 22, 2017 04:20 ET (08:20 GMT)
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