Enterprise Inns cash-back pledge boosts FTSE

A pledge by pubs group Enterprise Inns to return cash to investors put the London market on track to end the trading week on a high.

Enterprise revealed it was considering higher dividends and a share buyback programme, while sentiment was boosted by news that its annual profits were comfortably in line with expectations.

Shares in Enterprise lifted 2% or 17p to 840.5p and with mobile phone groups higher, the FTSE 100 Index rose 9.3 points to 5395 by mid-morning.

Top of the charts was O2 which has been the subject of bid whispers in recent weeks and its shares rose 3% or 4p to 154.75p to be within a whisker of an all-time high. Larger rival Vodafone was also attracting new investment – up 2p at 149.25p.

Companies who have been under pressure from rising fuel costs were helped by a fall in the oil price as traders saw the projected path of Hurricane Rita bypassing key refineries in the United States.

British Airways gained 2.25p to 285.75p after the price of crude slipped towards 66 US dollars a barrel, while chemicals firm ICI was ahead by 2.5p at 290.75p.

Shares in financial services firm Old Mutual were 1.5p lower at 136.25p after Swedish insurer Skandia urged its shareholders to reject a £3.3 billion takeover bid.

But there was progress elsewhere in the insurance sector where Norwich Union owner Aviva advanced 7.5p to 610p and Prudential gained 5.5p to 503p.

Poker giant PartyGaming lost further ground today – off 2p at 98p – and was on course to be valued at less than £4bn (€5.9bn) for the first time since it listed on the London market in June.

Confidence in online gaming firms has been shaken by PartyGaming’s warning of slowing growth and investors also fear it may make an expensive bid for Empire Online now that rival Sportingbet has walked away from the negotiating table.

Outside the top flight, bank note printer De La Rue advanced 7p to 367p after the board said first-half underlying results were set to be “modestly ahead” of last year.