Why J Sainsbury plc, ICAP plc and Drax Group Plc Should Beat The FTSE 100 Today

The FTSE 100 (FTSEINDICES: ^FTSE) turned tail this morning, dropping 74 points to 6,653, as short-termers once again reacted in panic to the ultimately-inevitable ending of the US Federal Reserve’s economic stimulus policy. The latest question is whether tapering will start in December or whether we’ll have to wait until the new year, and it’s that kind of uncertainty that upsets the City boys more than anything.

But even a falling FTSE can’t keep a good company down. Here are three from the indices with good news to report today.

J Sainsbury

A 4.4% rise in first-half sales gave J Sainsbury shares a 17p (4%) boost to 416p, coupled as it was with a 1.4% rise in like-for-like ex-fuel sales. That drove underlying pre-tax profit up 7% to £400m and earnings per share (EPS) up 9.2% to 16.6p, enabling a 4.2% rise in the interim dividend to 5p per share — the same at year-end would give us a 4.2% yield.

In addition, the firm told us that it had “Outperformed the market, increasing market share to 16.8 per cent, the highest for a decade“, and that it is on for full-year operational cost savings of £100m having reached £55m at the halfway stage.


Broker ICAP (LSE: IAP) saw its shares pick up 22p (5.8%) after releasing first-half figures showing a 1% fall in revenue. Although the firm recorded a 41% fall in statutory pre-tax profit, its adjusted figure indicated a rise of 1% to £139m and adjusted EPS came in 5% higher at 16.2p. The interim dividend remained unchanged at 6.6p per share.

Capital expenditure rose by £18 million to £30 million in the period, with Chief executive Michael Spencer telling us the firm is building “new electronic and post trade solutions to serve our customers’ changing needs as the regulatory environment evolves“.

The price jump took the shares to a 28% gain over the past 12 months.


It was a third-quarter update that helped electricity generator Drax Group, whose shares gained 24p (3.8%) to 661p as the firm told us that “Since publishing our half year results on 30 July, trading conditions in the markets in which we operate have continued to be good” and that full-year earnings should be “materially ahead” of the current consensus.

As well as Drax’s existing coal-fired generators continuing to perform well, the firm’s first power station to be converted to use biomass has achieved an “encouraging” performance. Earnings had been forecast to fall nearly 50% as the firm undergoes its transformation, but that will need to be revised for the better now.

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