UK Indexes Slide; Tullow Plunges

Arthi Gupta
25 Aug, 2010
New York City

The UK indexes traded lower after the rating agency downgraded Ireland

[R]4:00 PM London – The UK indexes traded lower after the rating agency downgraded Ireland’s sovereign debt rating. Irish factory gate prices slackened in July. SpiriTel secured £5 million contract from Punch Taverns. Tullow Oil first half sales increased 11%.[/R]

BHP Billiton plc after profit doubled on strong commodity demand and higher prices.

In London, FTSE 100 Index traded lower 58.68 or 1.14% to 5,097.27 and the pound edged lower to close at $1.5422.

Standard & Poor’s on Tuesday downgraded the Republic of Ireland''s sovereign debt rating. The rating agency said the rising cost of supporting the financial sector will further worsen the country''s finances

The agency cut the rating by one notch to AA- from AA and maintained its negative outlook on the ratings of Ireland''s debt.

Irish factory gate prices increased at a slower pace in July. The producer price index rose 0.9% year-on-year in July compared to a 1.2% growth in June, according to a report released by the Central Statistics Office.

On a monthly basis, manufacturing output prices dipped 0.6% in July, compared to a 0.4% fall in June.

The UK emergency budget will hit the poorest more than the richest, according to the Institute for Fiscal Studies. Chancellor of the Exchequer George Osborne had claimed in his Budget speech that the June 2010 Budget was a ''progressive Budget''.

According to IFS, low-income households of working age lose the most as a proportion of income from the tax and benefit reforms announced in the emergency budget.

SpiriTel Plc said it was awarded a contract by Punch Taverns Plc to provide a multi-site converged voice and data service to over 800 of Punch''s 7,100 UK sites. The contract is expected to generate revenue in excess of £5 million over its three-year life.

SpiriTel will provide a wide area data network and hosted IP telephony service using VoIP platform. The service is expected to cover 5,000 connections across Punch''s managed estate.

Gainers & Losers

Axis-Shield plc dropped 0.75% to 265.00 pence after the in vitro diagnostics firm reported first half revenue rose 0.7% to £50.9 million from £50.55 million in the same period last year. Underlying profit for the period decreased 39% to £2.03 million or 4.08 pence per share, versus £3.33 million or 6.74 pence per share in the prior-year period.

Aggreko plc tumbled 5.88% to 1,346.00 pence after the temporary power company stated first half revenues rose 16.8% to £583.6 million from £499.8 million in the prior-year period. Net profit in the period increased 21.6% to £87.4 million or 32.33 pence per share, compared to net income of £71.9 million or 26.69 pence per share last year.

Gresham House plc fell 0.27% to 366.50 pence after the authorized investment trust said first half total revenue surged 244.6% to £4.17 million from £1.21 million in the same period last year. Net loss for the period was £0.21 million or 4.3 pence per share, compared to net profit of £2.33 million or 47.8 pence per share a year ago.

Serco Group plc soared 3.49% to 579.00 pence after the provider of outsourcing and support services said first-half revenues rose 9.8% to £2.14 billion from £1.95 billion a year ago. Net profit in the period grew 15.5% to £74.4 million or 15.13 pence per share compared to net profit of £64.4 million or 12.62 pence per share last year.

SIG plc gained 3.31% to 93.70 pence after the construction products supplier reported first half sales decreased 4% to £1.29 billion from £1.34 billion in the same period last year. Net loss in the period narrowed 66.7% to £2.4 million or 0.4 pence per share from net loss of £7.2 million or 2.1 pence per share in the prior year.

Tullow Oil plc plunged 7.86% to 1,195.00 pence after the oil and gas exploration and production company reported first-half sales revenue increased 11% to $486 million, compared to $439 million reported in the previous year. Net profit for the period soared 159% to $81.7 million or 9.23 cents per share, compared to net profit of $31.6 million or 3.96 cents per share last year. The company''s board declared an interim dividend of 2.0 pence per share.

UK Coal Plc surged 5.26% to 40.00 pence after the coal mining company reported group sales decreased 11.5% to £141.35 million from £159.78 million in the prior-year period. Net loss in the period widened 12.9% to £92.01 million from net loss of £81.52 million a year ago.