UK Manufacturing Expands 0.6%; Tesco, Wolseley Rise

Arthi Gupta
07 Dec, 2010
New York City

The UK indexes rose after manufacturing output expanded in October. Rolls-Royce secured order worth over

[R]4:00 PM London – The UK indexes rose after manufacturing output expanded in October. Rolls-Royce secured order worth over £20 million from Tidewater and GlaxoSmithKline agreed to buy China-based MeiRui Pharma for $70 million. Xstrata approved $1.36 billion investment to develop a coal mine in Australia.[/R]

European officials announced no additional measures to deal with Europe''s debt crisis and said they believed there''s no immediate need to increase the $1 trillion crisis fund for the time being.

The Council of Economic and Finance Ministers is set to meet in Brussels today to formally approve the Irish package. Ireland was the second nation in the 16-nation euro bloc to seek financial assistance.

Irish finance minister Brian Lenihan will present his Budget 2011 today. The government has to reduce the public spending deficit to under 3% of output by 2015.

In London, FTSE 100 Index gained 56.96 or 1% to 5,826.19 and the pound edged higher to close at $1.5763.

Manufacturing Improves; Industrial Production Falls; GDP Expands

UK manufacturing output grew 0.6% in October from September''s 0.2% rise, logging the strongest expansion since March, according to figures released by the Office for National Statistics on Tuesday.

Annually, manufacturing output rose 5.8% in October, from the revised 4.9% increase in September.

UK industrial output dipped 0.2% in October, following a 0.4% rise in September, the Office for National Statistics said on Tuesday.

Energy supply output fell 1% in October with decreases in electricity and gas supply output, data showed.

Annually, overall production output in October 2010 was 3.3% higher than in October 2009. In September, production had increased 3.8%.

The British Retail Consortium-KPMG Retail Sales Monitor report said UK retail sales rose 0.7% on a like-for-like basis compared to a year ago in November following a 0.8% expansion in the previous month. Total sales rose by 2.8%.

Food sales growth accelerated on higher food prices. Clothing and footwear sales also improved due to the colder weather.

The U.K. economy grew 0.6% sequentially during the three-month ending November, as against the 0.5% growth recorded during the August to October period, the National Institute of Economic and Social Research said on Tuesday.

Rolls-Royce Wins Order from Tidewater

Rolls-Royce won an order to provide the design, propulsion systems and deck machinery for four deep water platform supply vessels. The order from Tidewater is worth over £20 million to Rolls-Royce.

Tidewater is the largest provider of ships serving the global offshore oil and gas industry and has a fleet of around 400 vessels.

GlaxoSmithKline Acquires MeiRui Pharma

GlaxoSmithKline plc announced a deal to acquire Nanjing MeiRui Pharma Co. Ltd., a Chinese pharmaceutical business specializing in urology and allergy medicines, for a cash consideration of about $70 million.

The acquisition is part of GSK''s move to further expand its presence in China, one of the fastest-growing emerging markets.

Xstrata Approves Investment

Xstrata Plc said its Board approved the development of the Ravensworth North open cut mine in the Upper Hunter Valley of New South Wales, Australia for a total investment of $1.36 billion or A$1.4 billion.

The mine is expected to produce 8 million tons of export thermal and semi soft coking coal per annum at full production. The mine life capacity is about 26 years. The project area encompasses the existing Xstrata Coal Ravensworth and Cumnock Operations.

G4S Buys Guernsey Air Conditioning

G4S plc announced the acquisition from David J Le Gallez of Guernsey Air Conditioning Limited. The company said that the acquisition would extend G4S''s significant facilities management capability by allowing it to offer a range of ''hard'' FM services to its Government and commercial customers across the Channel Islands for the first time.

Gainers & Losers

Admiral Group Plc gained 0.12% to 1,612 pence after the motor insurance company said it is in exclusive discussions with Itzehoer Versicherung to sell AdmiralDirekt, its car insurance operation in Germany.

Bglobal plc surged 8.22% to 39.50 pence after the energy measurement meters maker said first-half total revenues soared 114% to £12.46 million from £5.82 million in the previous year''s comparable period. Profit before tax for the period was £0.77 million compared to a loss of £0.67 million last year.

Focus Solutions Group Plc soared 11.76% to 142.50 pence after the software and consultancy solutions provider for financial industry agreed to a £42 million takeover offer by investment firm Standard Life Plc. Standard Life expects to capitalize on the new opportunities arising from both regulatory and demographic trends by this acquisition.

Pressure Technologies plc plunged 8.43% to 190.00 pence after the holding company for Chesterfield Special Cylinders Limited reported fiscal 2010 revenue dropped 17% to £21.71 million from £26.19 million a year earlier. Profit for the period declined 30% to £2.53 million or 22.2 pence per share, from £3.64 million or 32.0 pence per share last year.

Northgate plc gained 6.59% to 230.50 pence after the vehicle rental company reported first-half total revenue declined 2% to £367.87 million from £374.28 million in the same period last year. Profit in the period surged 248% to £14.02 million or 10.3 pence per share compared to £4.03 million or 5 pence per share last year.

Tesco PLC increased 2.2% to 429.25 pence after the international retailer said group sales for the thirteen weeks ended November 27 increased 8.8%, driven by “strong sales” in Asia and the U.S.

Wolseley plc edged higher 3.93% to 1,902.00 pence after the building materials supplier reported first quarter revenue rose 2% to £3.47 billion from £3.395 billion in the year-ago quarter. Quarterly like-for-like revenue improved 4%.