UK Indexes, Retail Sales Rise; Petrofac, Seven Energy Alliance

Arthi Gupta
25 Nov, 2010
New York City

The UK indexes rose after retail sales climbed in November. Tate & Lyle agreed to sell molasses business for

[R]4:00 PM London – The UK indexes rose after retail sales climbed in November. Tate & Lyle agreed to sell molasses business for £67 million. Petrofac agreed to acquire stake with Nigeria-based Seven Energy for $100 million. Thomas Cook formed a venture with Russia based Intourist.[/R]

The Bank of England stands ready to adjust policy in either direction, the Central Bank Chief Mervyn King told lawmakers on Thursday.

He said at the hearing before the Parliamentary Committee that a majority of the Monetary Policy Committee members felt the risks are at present broadly balanced.

In London, FTSE 100 Index gained 35.90 or 0.61% to 5,693.50 and the pound edged lower to close at $1.5769.

Irish Austerity Plan Open to Changes

The Irish government unveiled a four-year economic plan that it pledged in return for a bailout package of €90 billion from the European Union and the International Monetary Fund.

Announcing the four-year austerity measures at a press conference, Finance Minister Brian Lenihan said he was focusing on areas that cost the Exchequer the most - pay, pensions and social welfare.

""It is important to understand these are key drivers to expenditure and will be curtailed,"" he told reporters.

The Irish Times citing information from the Department of Finance said that the International Monetary Fund and the European Commission will have the authority to recommend changes in Irish government''s four-year austerity plan. A finance ministry official reportedly said the two external agencies can suggest changes during negotiations.

""It is not possible to say that there will be absolutely no changes to the measures outlined in the plan as negotiations are under way,"" Irish Times quoted the spokesman as saying.

Osborne Seeks EU Help in Bank Bonuses Issue

Chancellor George Osborne wrote a letter to European counterparts seeking support for a plan to disclose the level of bank bonuses above £1 million.

European Union financial services commissioner Michael Barnier and EU finance ministers will be asked to agree new rules to force banks to publish details of all bonuses of over £1 million.

Osborne then told Radio Four, ""There are European rules that are being developed in this area and it might be better for Britain to promote this internationally rather than just unilaterally.”

UK Retail Sales Rise

Results of a survey conducted by the Confederation of British Industry showed today that the UK retailers expect strong sales volume growth to continue in December boosted by Christmas spending.

The balance between those expecting an increase in sales volume and those anticipate a decrease was 45%. A net 11% of retailers expect the overall business situation to improve over the next three months.

The latest quarterly Distributive Trades survey showed that 55% of retailers saw the volume of sales rose in the two weeks to November 10th, while 13% said they fell. However, a net 6% of retailers said sales in November were below average for the time of year.

New Investment Plans to Reduce Overcrowding in Trains

The government unveiled an £8 billion investment plan to put more than 2,100 new carriages on Britain’s rail network by 2019, while replacing 125 Inter-City high speed trains.

The new trains will help tackle overcrowding on the busiest services, the Department of Transport said in a stock exchange announcement. The new carriages include ones that will be used on the Thameslink and Crossrail projects going through London.

Tate & Lyle Sells Molasses Business

Tate & Lyle plc, the food ingredients firm announced an agreement to sell its molasses business to grain trader W&R Barnett Ltd for £67 million cash. The deal is conditional on employee consultation and company plans to use the proceeds to reduce debt.

Petrofac Acquires Stake in Seven Energy

Petrofac Ltd., the oil & gas facilities service provider said it would acquire a 15% stake (12.6% on a fully diluted basis) in Nigerian production and development company Seven Energy International Ltd with a $100 million investment.

Under the strategic alliance agreed between both companies, Petrofac will also assist Seven Energy with the development of its production, processing and transportation assets by providing experienced personnel to assist with Seven Energy''s key existing projects.

Thomas Cook and Intourist in Venture

Thomas Cook Group plc agreed to take 50.1% in a joint venture with a Russian travel company VAO Intourist for a maximum consideration of $45 million. The company expects to complete the transaction in or before February 2011.

Thomas Cook stated that the joint venture includes Intourist’s outbound, domestic and inbound tour operating operations and its retail travel network.

Gainers & Losers

Castings PLC surged 5.33% to 267.00 pence after the supplier of spheroidal graphite iron castings reported first-half revenue surged 72% to £44.59 million from £25.96 million for the same period last year. Profit for the period rose 171% to £3.68 million or 8.45 pence a share from £1.36 million or 3.12 pence a share in the year-ago period.

Daily Mail and General Trust Plc slumped 3.90% to 542.50 pence after the multimedia and information company reported fiscal year 2010 revenues declined 4.4% to £1.968 billion from £2.06 billion a year ago. Annual profit was £199.8 million or 52.1 pence per share, compared to a loss of £303.4 million or 79.8 pence per share last year.

Dixons Retail plc fell 0.34% to 26.51 pence after the electronics and consumer appliances retailer reported first-half total sales edged higher 1% to £3.35 billion, compared with £3.33 billion in the prior-year period. Loss in the period narrowed 72% to £4.9 million or 0.1 pence per share, compared with a loss of £17.8 million or 0.5 pence per share a year ago.

Mears Group Plc dropped 0.34% to 26.51 pence after the provider of housing repairs and maintenance services, appointed David Miles as its Chief Executive Officer to succeed Bob Holt with immediate effect. Holt will remain as Chairman of the company''s board.

MS International plc surged 7.84% to 137.50 pence after the forgings and defense equipment manufacturer reported first-half revenue grew 40% to £25.34 million from £18.1 million in the year-ago period. Profit for the period soared 266% to £3.06 million or 17.0 pence per share, from £837,000 or 4.7 pence per-share in the comparable period a year earlier.

WS Atkins Plc gained 2.72% to 716.50 pence after the engineering consultancy and support services provider reported first-half revenues fell 5.3%to £664.2 million, from £701.2 million in the prior-year period. Profit in the period fell by 13.3% to £29.4 million or 29.5 pence per share from £33.9 million or 34.3 pence per share a year ago.