UK Unemployment Falls; IMF Lowered Outlook

Darlington Musarurwa
21 Apr, 2010
New York City

Stocks in U.K. traded lower with jittery investors withdrawing on commodity prices. The gross domestic product for U.K. estimated to rise 1.3% in 2010, according to the International Monetary Fund. Autonomy Corp. plc posts record revenue and profit. The Game Group CEO steps down as profits slump.

[R]4:00 PM London, 11:00 AM New York – Stocks in U.K. traded lower with jittery investors withdrawing on commodity prices. The gross domestic product for U.K. estimated to rise 1.3% in 2010, according to the International Monetary Fund. Autonomy Corp. plc posts record revenue and profit. The Game Group CEO steps down as profits slump.[/R]

U.K. stocks declined for the third consecutive time in four days impacted by sluggish commodity prices but cautious optimism for the second quarter.

UK unemployment rate for three months to February was 8.0% from the previous quarter according to the latest data from the Office for National Statics.

The number of unemployed people increased 43,000 in the quarter to 2.50 million, the highest since three months to December 1994.


The International Monetary Fund estimated 2010 UK growth rate of 1.3% and in 2011 lowered the estimate to 2.5% from 2.7%. The agency also suggested that lower pound will aid the recovery faster.

Greece’s Finance Minister George Papaconstantinou was optimistic that his country would overcome the current fiscal crisis and said to reporters yesterday “whether borrowing from the market or borrowing from our partners” the nation will be able to rollover its debt scheduled by the end of next month.

The nervous markets are still awaiting the bailout details and the benchmark indexes declined in Greece, Portugal and Spain.

The ASE Index declined 1.4%, the PSI-20 index fell 1.5% and the IBEX 35 index in Madrid dropped 1.7%.

In London FTSE 100 Index closed lower 42.24 or 0.73% to 5,741.45 and the pound edged higher to close at $1.538 and to close at €1.150.

Gainers & Losers

Autonomy Corporation plc, the infrastructure software provider first quarter revenue rose 50% to $194.2 million from $129.8 million a year ago. Net profit for the quarter rose 44% to $49.7 million or $0.21 per diluted share compared to net profit of $34.5 million or $0.15 per share a year ago.

BHP Billiton Limited fell 2.4% to 2,127.00 pence despite delivering a third consecutive year to date production record. Production was higher than the nine months ended March 2009 due to the successful start-up of Pyrenees, strong performances from Shenzi and Atlantis (both USA), and no weather-related interruptions. BHP Billiton also faces litigation charges after evidence of possible breaches of anti-corruption laws by the SEC.

Bunzl plc fell 0.6% to 760.50 pence after the distribution and outsourcing group today announced its interim management statement underlying group revenue in the first quarter has increased 2% compared to the same period last year led by North America which was up by 5%.

Covidien Public Limited Company fell 2.3% to 51.05 pence after the manufacturer of healthcare products reported second quarter sales fell 5% to $2.66 billion from $2.80 billion a year ago. Net income in the quarter rose 124.4% to $413 million or 82 cents per diluted share compared to net income of $184 million or 36 cents per share a year ago.

The Game Group plc plunged 10.5% to 90.65 pence after the specialist personal computer and video games retailer said 2009 revenues fell 10% to £1.77 billion from £1.97 billion a year ago. Net profit for the year fell 28% to £60.5 million or 17.42 pence per diluted share compared to net profit of £83.7 million or 24.10 pence per share a year ago. Declining profits have led to the resignation of the Chief Executive Officer.

Hochschild Mining plc slipped 1.2% to 275.00 pence and the first quarter 2010 production comprised of 4 million ounces of silver and 35 thousand ounces of gold.

Ladbrokes plc rose 2.6% to 161.50 pence after the bookmaker has reached a settlement with HM Revenue and Customs. Company expects a cash receipt in 2010 of approximately £80 million from the tax authorities.

Meggitt PLC, the aerospace and defense systems group fell 1.9% to 306.40 pence.

Senior plc gained 8.7% to 120.50 pence after the car and aviation parts supplier estimated revenue and profit was in line with market expectations for the three-month period ended March 31. Underlying revenue benefited from more favorable foreign exchange movements.

Ukrproduct Group Limited fell 8.6% to 30.60 pence after the dairy producer said 2009 revenues fell 17% to £43.2 million from £51.9 million a year ago. Net profit for the year fell 54% to £1.06 million or 2.5 pence per diluted share compared to net profit of £2.32 million or 5.4 pence per share a year ago.