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Why Rolls-Royce Holdings PLC, Reed Elsevier plc And Halma Should Beat The FTSE 100 Today

The FTSE 100 (FTSEINDICES: ^FTSE) is so far reversing the gains it has been making this week, and stands 44 points down on the day at 6,576 at the time of writing. But it has been lower today, dropping as far as 6,540 points just before midday, after a reversal of recent positive mining sentiment sent the sector down.

On a down day, what’s beating the FTSE? Here are three shares responding well to upbeat news:

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Rolls-Royce Holdings shares perked up 45p (3.8%) to 1,225p after the aero engine maker released good-looking first-half results. Underlying revenue soared by 27% to £7.32bn, with pre-tax profit up 34% to £840m. Underlying earnings per share rose 27% to 33.33p, and the firm upped its interim dividend by 13% to 8.6p per share.

The company told us that it needs to make more changes relating to costs and cash (though there was net cash on the books of £355m at the half-year stage), but chief executive John Rishton did say “Fortunately we have significant opportunities to improve both, but this will take time and firm resolve to deliver“.

Reed Elsevier

Information services firm Reed Elsevier (LSE: REL) was boosted by half-year results, with its share price gaining 25p (3.1%) to 826p — the firm told us that everything is on track. With underlying revenue up 2% to £3bn, adjusted operating profit came in 6% ahead at £870m, with adjusted EPS up 9% to 26.5p. The board has proposed an interim dividend of 6.65p per share, up 11%.

The return of cash to shareholders continues too, with chief executive Erik Engstrom telling us that “we intend to increase the scale of this year’s share buybacks to a total of £600m, approximately £200m beyond our expected full year gross disposal proceeds“.


Safety technologist Halma (LSE: HLMA) is our third riser, with a 12p (2.3%) share price gain to 535p by early afternoon. This time the driver was an AGM-day management statement, which told us that trading since the start of the financial year has been in line with expectations, after revenue grew by 13% on the same period last year. The firm also said that it will “continue to identify potential acquisition opportunities which meet our strategic and financial criteria“.

Halma share price is up 35% over the past 12 months, though after steady year-on-year earnings growth and two more rises in EPS forecast for this year and next, the shares are on a forward P/E of over 18. The dividend yield should be a little over 2%.

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

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