Why Aviva plc, Rio Tinto plc And Enterprise Inns plc Should Beat The FTSE 100 Today

The FTSE 100 (FTSEINDICES: ^FTSE) ended yesterday with a 93-point fall, but it’s back up 24 points to 6,535 by early afternoon today, with the UK’s big miners getting a boost as the latest economic figures from China came in ahead of expectations. The FTSE’s top-tier index is still down on the week, mind, losing 113 points so far.

The FTSE did get a boost from a few positive earnings updates today. Here are three from the various indices offering upbeat reports:


Aviva shares climbed 25p (6.7%) to 396p this morning, after telling us that that new business in its first half was up 17%. The insurer also enjoyed a £776m pre-tax profit, compared to a £624m loss at the same stage last year. Cash flow was up, by 30% to £573m. The company’s turnaround plans look to be bearing fruit, but chief executive Mark Wilson did offer a note of caution, saying “Although these results continue the positive trends of the first quarter, tackling our legacy issues will take time“.

Aviva proposed a dividend of 5.6p per share, down from 10p last year, in line with the rebasing announced at full-year results time. Forecasts for the year suggest a 4.2% yield. With Aviva in the Fool’s Beginners’ Portfolio, I’m happy with today’s tidings.

Rio Tinto

First-half results from Rio Tinto (LSE: RIO), another Beginners’ Portfolio constituent, sent the shares up a modest 29p (1%) to 2,983p, despite underlying earnings dropping 18% to $4.2bn. But a fall was expected, partly due to lower commodities prices, and it was lessened to some extent by record iron ore shipments.

Rio has achieved $1.5bn in cost reductions so far, but the firm told us that it has shelved plans to sell off its Pacific Aluminium division, and will instead reintegrate it into Rio Tinto Alcan.

Enterprise Inns

An update from Enterprise Inns gave an extra boost to a great year’s share-price performance — after a 10.7p (7.6%) lift this morning, the price is now up around 170% over the past 12 months. Like-for-like net income for the pub operator fell 2.7% in the 18 weeks to 3 August, but that was better than the 4.2% fall experienced in the first half — and the trend is apparently reversing, with a like-for-like rise in the first five weeks of the fourth quarter.

Debt is a big issue for the Enterprise, and the company expects net borrowings to be down to £2.5bn by the end of the year. Despite the recent price climb, Enterprise shares are on a P/E, based on current forecasts, of just 7.4.

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