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London afternoon: Footsie meanders in the red

Date: Tuesday 09 Mar 2010

London afternoon: Footsie meanders in the red

Disappointing UK trade figures knocked Footsie early with little help likely from the US as futures point to a weak start on Wall Street.

Data from the Office for National Statistics showed the UK’s deficit on trade in goods widened to £7.99bn from £7.01bn the previous month, about £1bn more than economists had predicted.

Shopping centre owner Liberty International is lower after saying it is to split into two separate listed businesses, Capital Shopping Centres and Capital & Counties through a demerger. Liberty overall posted a loss of £329m in 2009 compared with a loss of £2.66bn. NAV fell to 464p from 765p. The dividend is unchanged at 16.5p.

Antofagasta has also slipped back, though not so far as some of its mining peers such as Kazakhmys and Rio Tinto. Lower copper prices hit Chile-based miner and railway owner 's earnings last year. Net earnings fell to $668m compared with $843m in 2008 excluding one-offs on sales of $2.96bn, down from $3.37bn. Copper production was 442,500 tonnes, ahead of the original forecast for the year of 433,000 tonnes.

Satellite communications service provider Inmarsat is losing altitude, despite revenue and profits heading skywards in the fourth quarter. Total revenue in the final quarter of 2009 rose 13% to $181.5m from $160.6m in the fourth quarter of 2008. EBITDA jumped 18% to $119.7m from $101.4m the year before.

Energy supplierInternational Power reported a slight increase in its full-year dividend but said its near-term performance will be impacted by weak market conditions in the US and the UK.

Banks are out of favour after ratings agency Moody’s said it may downgrade the ratings of some UK lenders after the government removes support for the banking sector. Although Moody’s did not name which banks it had in mind for a downgrade, the two part-nationalised lenders, Royal Bank of Scotland and Lloyds Banking are regarded as the most likely suspects.

Shanks is the worst performer in the FTSE 250 after it ended talks with private equity group Carlyle about a possible offer for the waste group. A final price indication of 120p cash per share was proposed by Carlyle, but Shanks said it was unwilling to recommend an offer at such a level.

Difficult market conditions hit revenue and profitability at equipment rental group Ashtead Group but the company’s boss took comfort from his belief that the company is ‘clearly gaining market share’.

The weakness of sterling helped engineering group Weir grow revenues in 2009 and post a record operating profit. Revenue in 2009 grew 3% to £1,390m from £1,354m in 2008, but was down in 7% in constant currency terms.

Aviation and newspaper distribution group John Menzies said pre-tax profit more than doubled after it cut costs won new contracts.

Car dealer Lookers said full year profit increased by £26.4m after a strong performance from its parts division. Adjusted profit before tax for the year ended 31 December 2009 increased by 102% to £28.3m. Revenue on a like for like basis increased by 4.2% to £1.75bn.

Fund manager Gartmore, which floated in December, saw a net inflow of funds in 2009 as equity markets picked up, but net revenue still fell due to lower funds under management on average over the year and lower management fees.

Aer Lingus said operating losses quadrupled in 2009, though the Irish airline made a profit in the second half of the year. Operating losses, before exceptional items, widened to €81m from €20m last year, while revenues declined 11% to €1,205.7m.

Printer St Ives posted an increase in half year profit as it reduced costs but warned that it does not expect any immediate improvement in its underlying markets.

Shares in laundry and textile rental group Johnson Services firmed in early dealings after it said 2009 profit doubled and it reinstated a final dividend. Adjusted pre-tax profit rose to £12.2m for the financial year ending 31 December 2009 from £6m the year before. Revenue for the year fell to £236.4m from £252.3m a year earlier.

Shares in Ark Therapeutics fell back sharply after the drug developer said it would consider approaches it has received following a recommendation that a further clinical trial would be needed before its brain cancer treatment Cerepro could be approved.

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