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Why Lloyds Banking Group PLC, Berkeley Group Holdings PLC and FirstGroup plc Should Beat The FTSE 100 Today

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The FTSE 100 (FTSEINDICES: ^FTSE) looked like it was set to claw back a few tens of points today, but by mid-afternoon it’s only 13 points up to 6,511 having hit an eight-week closing low yesterday of 6,498. That takes the index of top UK shares down 140 points from last Friday’s finish at 6,651, and little short of a miracle now can save it from recording its fifth losing week in a row. Under 6,000 by Christmas, anyone?

But it’s not gloom for everyone, and some shares are perking up today. Here are three from the indices set to end the week positively:

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Lloyds Banking Group

Lloyds Banking Group (LSE: LLOY) (NYSE: LYG.US) shares picked up 1p (1.3%) to 78p today after the bank announced it has offloaded a bunch of bad debts as part of its programme of minimizing its “non-core” assets.

Lloyds is to sell a portfolio of non-performing Irish retail mortgages to Tanager Limited, for £257m in cash. The portfolio generated a loss of £33m in 2012, so it’s good to see the back of it — but the sale proceeds won’t make any difference to the bottom line, as the bank has already made prior provisions against the assets.

Berkeley Group Holdings

A first-half report form Berkeley Group Holdings (LSE: BKG) gave the residential property developer a boost, sending its shares up 170p (7.4%) to 2,452p — and up 50% over the past 12 months.

With revenue up 19.7% to £821m, pre-tax profit gained 19.2% to £169.5m and basic earnings per share rose 22% to 100p. The firm announced a massive hike in its interim dividend, from 15p per share a year ago to 60p — a similar 60p payment at year-end would bring in a total yield of 4.9% on the current share price.


Rail and bus operator FirstGroup (LSE: FGP) is our third for today, with a 5.2p (4.7%) rise to 116p, on the day the company announced the appointment of a new chairman.

John McFarlane will replace the incumbent Martin Gilbert as of 1 January, when Mr Gilbert will retire from the board. Mr McFarlane is currently chairman of Aviva and a non-executive director of Westfield Holdings.

FirstGroup shares slumped earlier in the year after a profit warning and a dividend cut, but since their June low of 90.3p the price has regained 25%.

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> Alan does not own any shares mentioned in this article.

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