UK Indexes Rebound; SABMiller, AB Foods Up

Mayank Mehta
20 Apr, 2010
New York City

UK stocks rebounded after rising earnings lifted trading sentiment. AB Foods, SABMiller and Burberry Group were in focus after companies reported better than expected results. March inflation rose to 3.4% and core inflation increased 3%.

[R]4:00 PM London, 11:00 AM New York – UK stocks rebounded after rising earnings lifted trading sentiment. AB Foods, SABMiller and Burberry Group were in focus after companies reported better than expected results. March inflation rose to 3.4% and core inflation increased 3%.[/R]

UK stocks closed higher after higher earnings from Associated Foods AB and SABMiller Plc and Tesco Plc.

Financial Services Authority, the UK securities markets regulators opened a formal inquiry to look into derivative operations of Goldman Sachs after a request from Prime Minister Gordon Brown. The Committee of European Securities Regulators based in Brussels is also looking to coordination investigation conducted by several member nations.

UK annual inflation measured at consumer price level rose to 3.4% in March compared to 3.0% in February, according to latest data from the Office for National Statistics. Core inflation, excluding food and energy prices, increased to 3% in March from 2.9% in February.

In London FTSE 100 Index closed higher 55.78 or 1% to 5,783.69 and the pound edged lower to close at $1.528 and to close at €1.135.

Burberry Group reported sharply higher comparable same store sales and SABMiller reported higher sales. Thorntons Plc plunged 12% after same store sales declined.

Gainers & Losers

Associated British Foods plc added 2.7% to 984.50 pence as first half revenues rose 9% to £4.8 billion from £4.4 billion a year ago. Net profit for the first half rose 79% to £249 million or 31.6 pence per diluted share compared to net profit of £139 million or 17.6 pence per share a year ago.

ASOS plc, the online and fashion retailer rose 2.5% to 536.50 pence as total sales for full-year increased 35% to £223 million and retail sales for the year grew 38% to £206 million.

Burberry Group plc decreased 0.5% to 697.50 pence after the luxury fashion label reported underlying sales increased 6% to 707 million pounds and underlying retail sales rose 15% till March 31 on 10% comparable store sales growth. Company is planning an increase in average retail selling space for fiscal year 2010/11 of around 10%.

Desire Petroleum plc gained 4.2% to 49.50 pence after the oil and gas explorer focusing on the North Falkland Basin announced it made a pretax loss of $3,768,000 for the year ended Dec. 31, 2009, compared with a loss of £1,774,000.

Reed Elsevier plc rose 0.6% to 530.00 pence after the publisher estimates a modest reduction in adjusted operating margin in 2010 due to a weak revenue environment and increased investment in legal markets.

SABMiller plc, the brewer climbed 3.3% to 1,974.00 pence. Full year soft drinks volumes grew 2%.

Tesco PLC, the international retailer declined 1.0% to 432.90 pence but 2009 revenues rose 6.8% to £62.5 billion. Pre-tax profit for the year rose 10.4% to £3.18 billion or 29.19 pence per diluted share.

Thorntons PLC plunged 12.0% to 110.00 pence after the confectionery retailer reported third quarter trading update for the 14 weeks up to April 17. Overall, Group sales since January were up 3.1% to £60.3 million, while company controlled sales declined by 4.9%. Sales of company’s branded products grew by 5.9%.

Tullow Oil plc, the oil and gas company slipped 1.6% to 1,261.00 pence after the company announced that the Dahoma-1 exploration well in the West Cape Three Points license encountered water bearing reservoirs.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 95 increased, 7 declined and none were unchanged.

Tesco Plc decliners in the FTSE 100 index with a loss of 1.47% followed by losses in Cable &Wireless Worldwide Plc of 0.98%, in Wm Morrison Supermarkets Plc of 0.51%, in Burberry Group Plc of 0.21%, and in Xstrata Plc of 0.20%.

Associated British Foods Plc led gainers in the FTSE 100 index with a rise of 5.79% followed by increase in SABMiller Plc of 4.24%, in The Royal Bank of Scotland Group Plc of 3.57%, in Cairn Energy Plc of 3.39%, and in Aggreko Plc of 3.21%.