British Airways Swings to Profit; M4 Money Supply Grows

Arthi Gupta
29 Oct, 2010
New York City

The UK indexes slid after mortgage approvals fell to seven-month lows in September and consumer sentiment improved in October. Irish retail sales declined and private sector credit growth slackened in September. British Airways net rose.

[R]4:45 PM London – The UK indexes slid after mortgage approvals fell to seven-month lows in September and consumer sentiment improved in October. Irish retail sales declined and private sector credit growth slackened in September. British Airways net rose.[/R]

Xstrata won approval for A$274 million George Fisher Mine expansion. Savile agreed to buy 7days Ltd.

In London, FTSE 100 Index traded higher 6.15 or 0.11% to 5,684.03 and the pound edged higher to close at $1.5987. For the week, the FTSE 100 index decreased 1%.

According to the survey results released by GfK NOP today, the UK consumer confidence unexpectedly increased in October, following a decline in September. The GfK NOP Consumer Confidence Index rose to minus 19 in October from minus 20 in September, the market research group said. The latest survey was carried out between October 1 and 10.

However, the gauge for the economic outlook in next 12 months dropped further to minus 20 from minus 19.

The number of loans secured for housing purchases in the UK edged down to a seven-month low in September, according to figures released by the Bank of England today. The number of approvals fell to 47,474 in September from 47,498 in August.

The number of remortgaging approvals rose to 28,903 in September from 28,390 in August.

Net lending secured on dwellings rose £100 million in September, below the August increase of £1.6 billion.

The UK M4 money supply grew 1% in September from the prior year, the Bank of England said today. The growth rate was revised up from 0.9%. At the same time, monthly decline in September was revised to 0.2% from 0.3%.

Data also showed that M4 lending remained flat on both monthly and annual basis in September. In August, it dropped 0.7% on a monthly comparison and increased 0.7% annually.

Irish retail sales volume decreased a seasonally adjusted 0.9% on a monthly basis in September, compared to a 1.3% rise in August, the Central Statistics Office said today. Sales in motor trade fell 0.6% in September from August and climbed 13.2% over a year earlier.

Annually, retail sales volume decreased 0.3% in September, in contrast to a 1.1% rise in August. A year earlier, retail sales decreased 10%.

The amount of loans advanced to Irish private sector grew 1% annually in September, as against the 1.2% increase in August, the central bank said today. Credit extended to households fell 4.5% annually, steeper than a revised 4.2% decline in August.

Lending to the non-financial corporate sector declined 3% in the year ending September, following an annual decline of 2.2% in August, the bank noted.

Xstrata PLC said Xstrata and Queensland Government approvals have now been received for a A$274 million, or $246 million, expansion of Xstrata Zinc''s George Fisher Mine in Mount Isa to increase the production rate by almost 30% from 2013.

The George Fisher Mine expansion follows the approval of the A$133 million Black Star Deeps open cut development to bring the total value of new mining projects in Mount Isa announced by Xstrata Zinc this year to A$407 million, or $62 million.

Both projects ensure the full utilization of the zinc-lead concentrator capacity in Mount Isa which was raised to 8.0 million tons per annum in 2009. The GFM expansion will increase the annual production rate from 3.5 million tons per annum to 4.5 million tons per annum.

Savile Group Plc said it agreed to acquire whole of the issued share capital of 7days Ltd. The acquisition has been satisfied by the payment of £1.29 million in cash and the issue of in total 1.4 million ordinary shares of Savile to Louise Palmer, co-founder and chief executive officer.

Gainers & Losers

British Airways plc tumbled 3.21% to 271.70 pence after it reported first-half revenue grew 8.5% to £4.45 billion from £4.1 billion last year. Profit attributable to equity holders was £107 million or 7.9 pence per share, compared to a loss of £217 million or 18.8 pence per share last year.

Creon Corporation Plc plunged 30.95% to 14.50 pence after the company engaged in the provision of mezzanine finance reported a loss on ordinary activities after taxation and pre-tax loss for the six months ended July 31, 2010 narrowed 48% to £50,000 or 0.11 pence per share, compared to loss of £96,000 or 0.22 pence per share in the prior-year period.

Lookers plc fell 1.64% to 60.00 pence after the motor retail company in its interim management statement for the period from July to October said group results for this period and the nine months are ahead of both budget and the prior year.

Shire plc gained 0.62% to 1,468.00 pence after the Irish drugmaker reported third quarter total revenues, which includes products sales, royalties and other revenue, increased 31% to $874.3 million from $667 million in the prior year.

Net income in the quarter surged 62% to $96.3 million from $59.6 million last year, mainly driven by increase in core product sales as well as generic sales of Adderall XR, despite increased charges. Earnings per ordinary share increased to 17.3 cents from 10.9 cents a year ago.

WPP Plc rose 0.97% to 725.50 pence after the Irish advertising firm reported third quarter revenues increased 12.2% to £2.25 billion from £2.01 billion a year ago, reflecting improved performance across all geographies and businesses. The company also said it expects full year margins to exceed its target.

Worthington Group PLC slumped 13.51% to 16.00 pence after the property development and management company reported revenues for the half year ended September 30, 2010 declined 24% to £69,000 from £91,000 in the prior-year period. Loss on ordinary activities after taxation and pre-tax loss for the six months widened 125% to £162,000, compared to a loss of £72,000 in the year-ago period.