UK Retail Sales Climb; Kazakhmys Soars

Arthi Gupta
26 Aug, 2010
New York City

The UK indexes climbed after August retail sales rose. The Financial Services Authority suggested that UK firms should hold more capital against risks. G4S agreed to buy 51% stake in Brazil-based Plantech.

[R]4:30 PM London – The UK indexes climbed after August retail sales rose. The Financial Services Authority suggested that UK firms should hold more capital against risks. G4S agreed to buy 51% stake in Brazil-based Plantech.[/R]

In London, FTSE 100 Index traded higher 49.13 or 0.96% to 5,158.53 and the pound edged higher to close at $1.5534.

British high street sales were higher than a year ago in August, the second consecutive year-on-year increase, according to the latest quarterly Distributive Trades Survey from the Confederation of British Industry released today.

Around 53% of retailers said that the volume of sales rose during the first two weeks in August while 18% said that it fell, giving a positive balance of 35%. This follows a balance 33% in July.

The Financial Services Authority stated the UK''s regulatory framework should require firms to hold more capital against potential trading risks.

In a discussion paper, the FSA recommended an increased regulatory focus on the valuation of traded positions of firms.

""The FSA believes that the delivery of a new, robust, long-term, approach to prudential requirements for trading activities is one of the key areas of regulatory reform that must be delivered to build a stronger financial system,"" the regulator said in a 126-page discussion paper. The closing date for responses is November 26.

G4S agreed to acquire an initial 51% shareholding in Brazil-based Plantech Engenharia e Sistemas Ltda from its management owners, Chief Executive Officer Helio Ferraz and CFO Fernando Haaland. The deal is expected to complete in the next week and G4S has options to increase its stake at a later date.

Nick Buckles, Chief Executive Officer of G4S said, ""The combination of Plantech with our earlier acquisition of Instalarme will immediately double our sales revenue in Brazil. We expect that by 2012, G4S will have revenues of around £50 million in Brazil and be growing around 15% per annum.""

Plantech, which provides fully integrated security solutions with 400 employees has gross assets of £9.5 million and revenues of £10.3 million in the first six months of 2010.

Gainers & Losers

AMEC plc surged 4.71% to 888.50 pence after the engineering and project management company reported first-half revenues grew 13% to £1.43 billion from £1.26 billion in the prior-year period, while organic revenue growth was 6%. Net profit in the period advanced 36% to £88.5 million or 26.5 pence per share compared to net income of £65.3 million or 19.5 pence per share last year.

The company declared a 20% higher interim dividend and said it expects second half to be stronger than the first-half.

Bloomsbury Publishing Plc fell 0.66% to 113.25 pence after the independent publisher first half revenue grew 4.4% to £36.83 million from £35.29 million in the comparable period. Pre-tax profit in the period dropped 48% to £0.95 million from £1.82 million last year.

Profit for the period attributable to owners of the parent tumbled 48% to £0.65 million from £1.25 million a year earlier.

Diageo plc dropped 1.13% to $65.62 after the beverages company reported full year net sales increased 5% to £9.78 billion from £9.31 billion in the comparable period, with organic revenues up 2%. Net profit attributable to shareholders climbed 2% to £1.63 billion or 65.4 pence per share compared to £1.60 billion or 64.4 pence per share in the prior year.

G4S plc gained 2.99% to 254.50 pence after the security solutions company reported first half revenue gained 4.3% to £3.63 billion from £3.48 billion in the same period last year. Adjusted profit attributable to shareholders grew 4.1% to £130.6 million or 9.3 pence per share from £125.4 million or 8.9 pence per share in the comparable period. The company declared an interim dividend of 3.17 pence per share, an increase of 5% from last year.

Kazakhmys plc soared 5.03% to 1,127.00 pence after the UK-based copper miner with main assets in Kazakhstan, reported first half revenue rose 36% to $1.52 billion from $1.12 billion in the prior-year period. Net profit in the period increased 11.2% to $574 million or $1.07 per share as against net income of $516 million or 96 cents per share a year ago.

SEGRO Plc plunged 4.58% to 262.40 pence after the commercial property developer reported first half revenues increased 35% to £227.2 million from £168.4 million in the same period last year. Net rental income edged higher 11.3% to £144.3 million as against £129.7 million a year ago.

Net profit for the first half was £153 million or 20.8 pence per share, in comparison with a loss of £480 million or 113.2 pence per share in the preceding year. Profit before tax for the period was £148.9 million, compared to a loss of £493.3 million in the previous year.