Thursday, July 25: FTSE indices commenced the day in the green, with the FTSE 100 led by well received H1 results for Astrazeneca and the FTSE 250 buoyed by a bid for Cobham from an arm of private equity firm Advent International. Equity buying was broad based in Europe as hopes grew that the ECB would take an easing stance with respect to monetary policy. However, outgoing Mario Draghi and his pals disappointed equity markets as the ECB announced that stimulus would be coming…in time. This prompted major European indices to close in the red, with market participants realising a loosening of policy was further away than anticipated.
Astrazeneca(+5.67%) climbed higher despite a fall in Q2 net profit of 63%. Q2 Net profit was $130m, from $350m last year, below analyst expectations of $282.3m on a revenue increase of 13% to $5.82bn. Core earnings per share rose 5% to 73 cents, versus analyst expectations of 59 cents, whilst net debt was reduced by $2.1bn to $13.1bn. The British pharmaceutical company raised guidance for sales growth to low double-digits, compared to prior guidance of high single-digit growth.
Cobham(+35.87%) leapt higher intraday on the back of the offer from a subsidiary of Advent International. The aerospace & defence firm said it had reached an agreement which values the company at £4.0bn from AI Convoy Bidco, which has agreed to pay 165 pence in cash per Cobham share, representing a 34% premium to Tuesday’s closing price, and a 50% premium to the three month volume weighted average price of 110p. The Group did announce that its directors intend to unanimously recommend shareholders to vote in favour of the deal. In a separate announcement, Cobham’s interim results illustrated growth in revenue but a drop in pretax profit due to the absence of divestment gains. Revenue jumped to £1.03bn(£0.924bn) as pretax profit came in at £60.5m, down from £181.0m a year prior.
European equities were lower at the close, with the FTSE 100 -0.17%, the CAC 40 -0.50% and the DAX 30 -1.28%.