UK PPI Eases; Morgan Sindall in a Deal

Arthi Gupta
10 Sep, 2010
New York City

The UK indexes traded sideways after producer prices inflation eased in August. Irish manufacturing output rose in July and weekly earnings fell in the first quarter. Morgan Sindall acquired ongoing contracts and related assets of Connaught plc.

[R]4:15 PM London – The UK indexes traded sideways after producer prices inflation eased in August. Irish manufacturing output rose in July and weekly earnings fell in the first quarter. Morgan Sindall acquired ongoing contracts and related assets of Connaught plc.[/R]

In London, FTSE 100 Index traded higher 14.58 or 0.27% to 5,508.52 and the pound edged lower to close at $1.5399. For the week, the FTSE 100 index increased 1.4%.

The Office for National Statistics said the UK factory output prices rose 4.7% in August compared to the same month a year ago. This compares to a 5% increase in the previous month. The data also showed that factory input costs rose at a more moderate pace.

However, annual input price inflation slowed to 8.1% in August from 10.8% in July.

In another report, a leading indicator of the UK economy rose at a lesser pace in July. The Conference Board leading index climbed 0.2%, slower than the 0.5% rise in June. Five of the seven components made positive contributions to the index.

Irish manufacturing production rose 12.6% year-on-year in July, faster than a 8.7% growth in June, according to a report released by the Central Statistics Office today. The production increased for the third consecutive month. A year earlier, manufacturing output increased 1.5%.

On a monthly basis, manufacturing output rose a seasonally adjusted 3.5% in July, but slower than a 4.3% rise in the previous month.

Industrial production climbed 3.2% on an annual basis in July, following a 3.7% growth in June. Month-on-month, the seasonally adjusted industrial output rose to 12.1% in July from 8.4% in June.

Ireland''s average weekly earnings dropped 3.8% on an annual basis to €682.91 in the first quarter, compared to a revised 0.4% fall in the previous quarter, the Central Statistics Office said today.

The weekly earnings in the private sector decreased 2.8% annually in the first quarter, while earnings in the public sector slipped 5.5%. The weekly earnings of clerical, sales and service employees fell 5.9%.

Morgan Sindall Group plc said its affordable housing division Lovell Partnerships reached an agreement to purchase the majority of the ongoing contracts and their related assets of the social housing division of Connaught plc. The company stated that a total cash consideration of £28 million has been paid for the assets, representing a discount to their net book value.

The new contracts are anticipated to generate about £200 million of additional annual revenue.

Gainers & Losers

JD Wetherspoon plc tumbled 3.45% to 428.20 pence after the company engaged in the development and management of public houses stated fiscal 2010 revenue gained 4.3% to £996.33 million, from £955.12 million in the prior year. Net profit for the year soared 39.2 to £40.78 million or 29.3 pence per share, compared to net profit of £25.3 million or 18.2 pence per share a year ago.

Laura Ashley Holdings plc soared 13.73% to 14.50 pence after the home furnishing and women''s fashion retailer reported first-half revenue increased 5.7% to £135.1 million from £127.8 million in the previous year. Profit before tax for the period surged 855% to £10.5 million from £1.1 million last year.

London Stock Exchange Group Plc gained 1.36% to 706.50 pence after the diversified stock exchange group announced that its subsidiary Borsa Italiana S.p.A. acquired 94.4% of Pro Mac S.p.A., the company responsible for the promotion of Mercato Alternativo Del Capitale, for a cash consideration of €5.147 million from 22 existing shareholders of the company, including a number of leading Italian banks and associations.

Borsa Italiana will own 99.6% of Pro Mac S.p.A. following the transaction.

Record Plc dropped 0.61% to 40.75 pence after the currency management house appointed James Wood-Collins as Chief Executive Officer replacing Neil Record, both Chairman and CEO since 2007

SThree plc fell 2.02% to 281.20 pence after the specialist staffing business said third quarter gross profit increased 15% year over year, primarily reflecting improvement in growth in all markets, with the exception of Benelux.