U.K. Stocks Extend Five-Year High as BT Climbs on Profit

U.K. stocks climbed for a seventh day, the longest winning streak since July 2011, led by a rally in BT Group Plc (BT/A) after the telecommunications operator reported earnings that beat analyst estimates.

BT, Britain’s largest fixed-line phone company, jumped the most in almost four years. Shire Plc (SHP) rose the most in nine months after winning a court ruling that prevents a generic-drug company from selling a version of its ulcerative-colitis treatment. Anglo American Plc (AAL) dropped 4.6 percent after the company’s platinum unit reduced the number of job cuts to appease the South African government.

The FTSE 100 Index (UKX) rose 32.24 points, or 0.5 percent, to 6,624.98 at the close of trading in London, its highest level since October 2007. The broader FTSE All-Share Index (ASX) also added 0.5 percent today, reaching an all-time high. Ireland’s ISEQ Index increased 0.3 percent.

“Investors still see some scope for more upside before the end of the week,” Craig Erlam, a market analyst at Alpari U.K. Ltd. in London, wrote in an e-mail. “BT Group is leading the gains in the FTSE after reporting higher-than-expected profits. The company also increased its dividend which has clearly helped boost the share price.”

The FTSE 100 has surged 12 percent this year amid monetary stimulus from central banks. It has risen 1.4 percent this week, for a third straight week of gains.

BT Jumps

BT surged 12 percent to 309.5 pence, the biggest jump since July 2009. The company reported a 4 percent increase in fourth-quarter earnings before interest, taxes, depreciation and amortization to 1.67 billion pounds ($2.6 billion) as it added high-speed Internet service customers. That beat the average analyst estimate of 1.62 billion pounds in a Bloomberg survey. BT proposed a full-year dividend of 9.5 pence a share, more than the 8.3 pence that it paid a year earlier.

The company said yesterday it will offer its new BT Sport channels free with broadband subscriptions to make its bundles of phone, Internet and TV services more appealing. That pushed the shares of British Sky Broadcasting Group Plc lower.

Shire gained 4.4 percent to 2,019 pence, the largest increase since Aug. 1. A U.S. district judge in Florida ruled late yesterday that a treatment from Actavis Inc. infringes a patent on Shire’s Lialda drug.

Lialda, whose active ingredient is mesalamine, generated $400 million in sales last year for Shire, or 8.6 percent of the company’s revenue, according to data compiled by Bloomberg.

TUI Travel Plc (TT/) rose 1.9 percent to 346.9 pence after the tour operator narrowed its first-half operating loss by 9 percent to 289 million pounds and increased its interim dividend by 10 percent. Chief Executive Officer Peter Long told Bloomberg Television that he sees growth opportunities for the company.

Meggitt Advances

Meggitt Plc (MGGT) climbed 3.2 percent to 515.5 pence after Societe Generale SA raised its recommendation for the engineering company to buy from hold. The brokerage said Meggitt’s medium-term outlook remains strong and 2013 should see a recovery in the so-called aftermarket.

Ocado Group Plc (OCDO) surged 7.7 percent to 224.6 pence after Goldman Sachs Group Inc. raised its recommendation for the U.K.’s largest online-only grocer to buy from neutral, saying the company will grow revenue at a faster pace.

“With capacity now less constrained, we believe Ocado can significantly accelerate revenue growth over the next three years,” Goldman wrote in a note to clients. “We ultimately believe the business could take an 8 percent share of the U.K. grocery market.”

Separately, Ocado said today that its potential alliance with Wm Morrison Supermarkets Plc will not effect its supply agreement with the Waitrose grocery chain.

Anglo American

Anglo American (AMS) dropped 4.6 percent to 1,591 pence after Anglo American Platinum Ltd. reduced the number of job losses it plans at its South African mines to about 6,000, less than half those originally planned. The company in January put its plans to fire as many as 14,000 workers on hold after the government threatened to revoke some of its licenses.

International Consolidated Airlines Group lost 1.6 percent to 275.9 pence. The parent company of British Airways widened its first-quarter operating loss to 278 million pounds, excluding one-off items, because of a weaker pound and 10 days of strikes at its Spanish unit Iberia. The loss was greater than the average analyst estimate of 250 million euros.

F&C Asset Management Plc (FCAM) fell 3.3 percent to 97.45 pence after Dutch insurer Achmea BV decided to withdraw 10.3 billion pounds of assets from the investment firm controlled by hedge-fund manager Edward Bramson.

Centamin Plc (CEY) sank 17 percent to 37.87 pence after the mining company said that the Egyptian State Commissioner’s Office has produced a report on the annulment of its mine lease in the country that it found “not positive.”

The number of shares changing hands in companies on the FTSE 100 was 17 percent greater than the average of the past 30 days, according to data compiled by Bloomberg.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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