Building materials supplier CRH enjoyed its best trading day in 10 months after it said earnings for the year will rise by 25pc thanks to strong growth in the US construction sector.
The FTSE 100 group said economic recovery is driving demand stateside and as a result “2015 will be a year of growth”. In the nine months to the end of September, earnings before interest, tax, depreciation and amortisation, jumped 34pc compared with the previous year to €1.5bn, driven largely by its American business.
The new bill will provide $325bn of funding across the next five years, paving the way for an uplift in highway construction activity and improving the group’s prospects, as it is the largest provider of raw materials into this end-market.
However, the Irish group said the backdrop in Europe is “mixed but stable”. Robert Eason, of Goodbody, said: “European profits are guided to be flat against a backdrop of mixed markets with difficult conditions in Switzerland and soft Polish pricing offsetting strength in Ireland and improving Benelux markets.”
Meanwhile, it said the integration of the recently acquired assets from Lafarge-Holcim is “progressing well” and they are expected to boost earnings by around €340m this year.
Shares in the world’s third-biggest building materials group leapt 97p, or 5.5pc, to £18.75 - its biggest daily rise since early February.
On the wider market, the FTSE 100 hit its highest level in two weeks - rising 50.96 points, or 0.81pc, to 6,329.93 - buoyed by solid corporate earnings updates.
Investors brimmed with enthusiasm after the minutes from the October Federal Open Market Committee meeting gave its strongest signal yet that interest rates might rise next month and the European Central Bank’s minutes hinted at further stimulus.
Mike McCudden, of Interactive Investor, said: “With the knowledge that the US will likely raise rates next month there is some confusion over whether this is the beginning of a 'Santa’ rally or the death throes of a bull market.”
Chemicals company Johnson Matthey was among the top risers that impressed investors with its half-year results. Shares in the world’s biggest maker of autocatalysts soared 9.7pc to £26.94, its highest level in three months after it announced plans to pay a special dividend of £305m to shareholders.
Shares were hurt by Volkswagen’s recent emissions scandal, and analysts at Jefferies said the tightening of emissions requirements should “continue to present opportunity for the catalyst providers”.
Royal Mail enjoyed its biggest one-day rise in its share price since April. Its half-year earnings came in ahead of expectations at £348m, and although it posted a 30pc fall in profits due to increased competition and redundancy costs, resulting from 3,000 job cuts, the stock advanced 22.5p to 476.7p.
Despite the stellar stock price performance, Allan Smylie, of Davy, warned: “The company still faces potential headwinds on a number of fronts, including regulation, labour negotiations, the pension and a very competitive backdrop in parcels, but the cost initiatives are clearly an important step to offset these.”
Meanwhile, engine maker Rolls-Royce closed marginally lower - down 2p to 541p - after activist investor ValueAct increased its stake in the business to above the 10pc mark.
The housebuilding sector had a torrid trading session on the back of a disappointing set of results from mid-cap group Bovis Homes. The stock plunged 85p, or 8.6pc, to 904p after the group warned operating margins for the year will only be “marginally” ahead of 2014, due to delays in building and rising costs.
Following the release of its third-quarter trading update, Robin Hardy, of Shore Capital, said the stock “certainly looks like a riskier proposition” and investors appeared to agree, as they offloaded the stock, sending it to ten-month lows.
Peers Berkeley Group fell 1.5pc to £30.93, Persimmon was 1.3pc lower at £18.40 and Taylor Wimpey also tumbled 0.2pc to 185.3p.
Bovis Homes graph (Source: Bloomberg)
However, the biggest casualty of the day on the mid-cap index was Poundland. Shares endured their worst day on record, as they nose-dived 55.9p, or 20.1pc, to 222.7p after the bargain retailer said trading conditions in the third quarter had been “highly volatile”. Profits fell by 26pc in the first half of the year as a result.
Elsewhere, investors in Domino’s Pizza did not welcome the news that the group had lost its second finance director in a year. Chief financial officer Paul Doughty resigned and will step down at the end of the year, while boss David Wild will assume responsibility for the role until a replacement can be sourced.
Mr Doughty only joined in June, and his departure comes months after his predecessor Sean Wilkins stepped down in January. The stock slipped 1.5pc to £10.76.
Finally, Aim-listed Atlas Development slipped 8.7pc to 0.5p despite announcing the acquisition of Ethiopian East Africa Packaging - a glass bottle manufacturing facility - just outside the capital city of Addis Ababa, which will be its first consumer-based industrial project.
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