LONDON MARKETS: FTSE 100 Led Higher By Miners; Provident Plunges 66%
22 August 2017 - 6:37PM
Dow Jones News
By Carla Mozee and Sara Sjolin, MarketWatch
Provident Financial drops more than 60% after second profit
warning in three months
U.K. stocks snapped a three-session losing streak Tuesday,
bolstered by gains for miners and home builder Persimmon PLC after
well-received financial updates.
But Provident Financial shares lost over 60% of their value
after the doorstep lender issued its second profit warning in three
months.
The FTSE 100 rose 0.9% to close at 7,381.74, logging its biggest
one-day percentage gain since July 12.
Miners cheer: Mining heavyweights BHP Billiton PLC and
Antofagasta PLC were among the top performers on the blue-chip
benchmark.
BHP shares climbed 2.1% (BLT.LN) (BHP.AU) (BHP.AU) after the
company said it's planning to sell its onshore U.S. oil and gas
operations
(http://www.marketwatch.com/story/bhp-billiton-looks-to-sell-us-shale-operations-2017-08-21).
The decision followed a push by activist investor Elliott
Management in favor of the move.
BHP also said its final dividend will rise threefold. The miner
swung to a yearly net profit of $5.86 billion, but that was weaker
than anticipated.
Antofagasta shares (ANTO.LN) ended up 2%. The copper miner more
than tripled its interim dividend payment
(http://www.marketwatch.com/story/antofagasta-profit-surges-to-triple-dividend-2017-08-22)
after reporting a sharp rise in half-year earnings.
Provident shift: But shares of Provident Financial PLC (PFG.LN)
tumbled 66% -- its biggest one-day tumble ever -- after the lender
said it expects to lose between 80 million pounds ($103 million)
and GBP120 million in the third quarter. The profit warning
(http://www.marketwatch.com/story/provident-warns-on-profit-again-ceo-to-leave-2017-08-22),
the second in three months, comes after Provident shifted to using
full-time "customer experience managers" rather than self-employed
agents in its home credit business.
"The previously announced dividend is being withdrawn and
investors shouldn't expect anything until we see significant
improvements. The 5.5% dividend yield was really the last leg
holding the stock up, but this key support has now gone," said ETX
Capital senior market analyst Neil Wilson in a note.
Provident also said Peter Crook has resigned as its chief
executive.
Stock movers: Meanwhile, Persimmon (PSN.LN) gained 1.8%. The
home builder said its first-half profit rose 30%
(http://www.marketwatch.com/story/persimmon-profit-up-30-on-higher-house-prices-2017-08-22)
to GBP457.4 million as it sold more houses at higher prices.
Shares of supermarkets were mostly higher after Kantar
Worldpanel said Britain's four largest grocers logged growth in
sales in the 12 weeks ending Aug. 13, a fifth consecutive increase.
Tesco PLC (TSCO.LN) (TSCO.LN) added 4.1% and Wm Morrison
Supermarkets (MRW.LN) (MRW.LN) put on 1.8%.
The pound bought $1.2833, down from $1.2900 late Monday in New
York.
(END) Dow Jones Newswires
August 22, 2017 12:22 ET (16:22 GMT)
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