Interactive Investor

Shares round-up: the stocks dragging FTSE 100 towards record territory

There are some big movers behind the latest blue-chip rally. City writer Graeme Evans runs through the day’s best performers and those reluctant to join the party.

2nd May 2024 15:41

by Graeme Evans from interactive investor

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Smurfit Kappa Group (LSE:SKG) joined Shell (LSE:SHEL) and Standard Chartered (LSE:STAN) among today’s stand-out performers as the first-quarter results season continued with the FTSE 100 back near a record high.

The Dublin-based packaging group topped the blue-chip risers board, with London Stock Exchange Group (LSE:LSEG) and the acquisitive Diploma (LSE:DPLM) among those not far behind.

At the top of the fallers board, GKN Aerospace business Melrose Industries (LSE:MRO) gave up more of its recent share price progress despite posting another strong update today.

The shares are down by about 10% in the past month, having doubled in value in 2023 and a further 40% in the first quarter after upgrading guidance in annual results.

New chief executive Peter Dilnot today highlighted a strong performance in the Engines division, which is a tier 1 supplier of components for civil and defence airframe platforms. It grew revenues by 21% with momentum expected to continue throughout the year.

Overall, revenues rose 8% after being pegged back by a flat performance in the design-led Structures division, which offers airframe technology and electrical distribution systems.

It has been impacted by the planned exit of non-core work and previously highlighted de-stocking by a major customer.

Dilnot added: “Longer term, the group is well positioned to deliver ongoing growth and margin expansion supported by positive end markets and excellent business improvement momentum.”

He has stepped into the role vacated by Simon Peckham, who formed part of a leadership team responsible for taking Melrose from 2003 start-up to the FTSE 100. The company, which has returned over £8 billion to shareholders, is due to pay a dividend of 3.5p a share on Wednesday.

The shares lost 18.1p to 603.1p, a performance that weighed on Rolls-Royce as the engines maker continued its recent uncertain run by falling 2.7p to 404.8p.

Smurfit Kappa led the FTSE 100 index, extending gains for this year to 20%, after a “very strong” first-quarter update showed the paper-packaging group has not been distracted by preparations for its July merger with US-based WestRock.

Following 2023’s second-best performance in its 90-year history, today’s 16% decline in earnings to 487 million euros (£416.8 million) came in 12% ahead of City estimates.

Tony Smurfit, who will lead the new Smurfit WestRock venture, said box demand has continued to improve with volume growth in Europe and the Americas of about 3% and 2% respectively.

The merged company will have its primary listing in New York, with the switch to the standard segment of the London market meaning Smurfit will drop out of the FTSE 100 index.

Among other risers, London Stock Exchange lifted 208p to 9,048p after a £500 million buyback targeted the shares still held by Blackstone and Thomson Reuters following the transaction that saw the FTSE 100 company buy data business Refinitiv in 2021.

The consortium held just over 10% of LSEG at the end of February, compared with 34% a year earlier. The latest buyback took place at 8,769p, a discount of 0.8% to last night’s closing price.

Quality compounder Diploma also featured on the FTSE 100 risers board after it announced the £38 million acquisition of a family owned supplier of specialist seals and gaskets.

The addition of UK-based PAR, which will be immediately margin and earnings accretive to the group, continues the record of targeting complementary businesses with the potential to deliver strong returns in the sectors of seals, controls and life sciences.

Diploma is now worth nearly £5 billion, having delivered compound annual earnings growth of 15% over 15 years and 18% in the past four years. Its shares have risen by a third since October.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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