View the article online at http://citywire.co.uk/money/article/a570308
Persimmon jumps on dividend plans; FTSE edges up
Shares in Persimmon (PSN.L) surge 18% after housebuilder unveils plans to return £1.9 billion of surplus cash to shareholders.
Shares in Persimmon (PSN.L) surged on Tuesday after the housebuilder unveiled plans to return £1.9 billion of surplus cash to shareholders, while Britain’s FTSE 100 edged up as oil prices eased.
The UK index of blue-chip shares took on 0.29%, or 17 points, to 5,932 and the All Share index was 0.33%, or 10 points, higher at 3,074. See the FTSE’s performance and the index’s top winners and losers.
Persimmon dividend up 33%
Persimmon rocketed up 113p, or 18%, to 740p after the York-based group said it would hand over the money via dividends over nine and a half years, starting from 2013, throughout which time it would remain largely debt-free.
The firm posted slightly better-than-expected underlying pre-tax profits of £148.1 million, up 55% from the year before, citing its success in improving operating margins, investing in high-quality land and generating surplus cash to pay down debt.
It also declared a total dividend for 2011 of 10p, 33% higher than a year earlier.
Anthony Codling, analyst at Oriel Securities, reiterated a ‘buy’ recommendation for the stock following the results, saying the planned return of 620p per share over 10 years suggests a current annualised yield of almost 10%.
‘We expect that, as with the announcement of the Berkeley (BKGH.L) capital return, Persimmon’s shares will react positively to this news,’ he added.
ECB cash awaited
Meanwhile, Brent crude for delivery in March slipped 0.31% to $123.79 per barrel, retreating further from Friday’s 10-month high of $125.55 and easing fears of that energy costs will derail the global recovery.
And Bill O'Neill, chief investment officer, Merrill Lynch Wealth Management, EMEA, pointed out in regard to US equities that while crude prices might weigh on sectors linked to disposable income, energy stocks could gain.
‘Were an oil price spike to occur, policymakers would likely react to support growth,’ he said in a note. ‘Developed markets may engage in further quantitative easing. Emerging nations may loosen fiscal policy, introducing subsidies or, like China, reducing windfall taxes on energy producers.’
Elsewhere, stock markets in Europe shrugged off a downgrade of Greece's credit rating to 'selective default' by Standard & Poor's last night, saying the move was expected as the country's debt was restructured. Attention was focused on what is expected to be a second offer of cheap three-year loans from the European Central Bank: Germany’s DAX index strengthened 0.42% to 6,878, France's CAC 40 index rose 0.47% to 3,458, and the FTSEurofirst 300 index of top European shares climbed 0.5% to 1,078.
GKN pulls back
News sponsored by:
Making the most out of Europe’s potential means seeing things differently. Learn more about how BlackRock’s focused approach to investing in Europe helps investors unlock the continent’s vast potential.
In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
More about this:
Look up the shares
- Royal Bank of Scotland Group PLC
- HSBC Holdings PLC
- GKN PLC
- Essar Energy PLC
- Persimmon PLC
- Berkeley Group Holdings PLC
More from us
- FTSE posts weekly gain ahead of new ECB cash flood
- Citywire Top Stocks®
- FTSE Share Prices & Performance
Tools from Citywire Money
From the Forums
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add email@example.com to your safe senders list so we don't get junked.