UK Retail Sales Growth at 8-month Low; Centrica Net Surges

Arthi Gupta
24 Feb, 2011
New York City

The UK indexes rose on surging oil prices as an aftermath of the crisis brewing in Libya. The BoE policy maker David Miles urged restraint in hiking key interest rate. The UK retail sales growth decelerated in February and RBS swung to profit.

[R]4:00 PM London – The UK indexes rose on surging oil prices as an aftermath of the crisis brewing in Libya. The BoE policy maker David Miles urged restraint in hiking key interest rate. The UK retail sales growth decelerated in February and RBS swung to profit.[/R]

Brent crude surged nearly 18% to $119.79 a barrel on the London-based ICE Futures Europe exchange since the Middle East unrest began a month ago.

Oil production in Libya is shutting down as companies pull out workers and close down facilities because of the deteriorating situation. The oil companies Repsol and Eni confirmed that their productions are running at 50% to 75% below daily average from Libya.

The above target inflation in the UK is ''deeply worrying'', the Bank of England policy maker David Miles said on Wednesday. But the central bank should not raise interest rates faster than required.

In London, FTSE 100 Index gained 5.44 or 0.11% to 5,928.13 and the pound edged lower to close at $1.6170.

UK Retail Sales Growth Decelerates

British high street sales growth slowed sharply in February, the Confederation of British Industry said on Thursday.

The CBI said 36% of retailers saw an increase in sales volume in the two weeks to February 16, while 30% said they fell. The resulting balance was 6%, well below the expected 25%. That was the slowest annual growth in eight months.

The fortunes of the UK services sector continued to diverge over the last three months, a survey conducted by the Confederation of British Industry showed on Thursday.

Business volumes in consumer services declined, while firms selling business and professional services recorded a return to growth with the first quarter of significant growth in nearly three years, according to the latest quarterly Service Sector Survey.
Nearly 20% of respondents from consumer services said their value of business increased and 35% said it fell, resulting in a balance of minus 15%, the biggest fall since May 2009.

Invensys Secures Fuqing Nuclear Contract

Invensys Operations Management, a global provider of technology systems, software solutions and consulting services to the manufacturing and infrastructure operations industries signed a third project-based agreement with China Nuclear Power Engineering Co. LTD to provide safety and distributed control systems and solutions for Fujian Fuqing Nuclear Power Plant.

Under the terms of the contract, Invensys will provide its Triconex critical control, Foxboro I/A Series distributed control systems and human-machine interface solutions to the Fuqing Nuclear Power Company.

Mouchel Confirms Buyout Offer

Mouchel Group plc confirmed that it is in advanced discussions with one potential buyer and has signed a cooperation agreement with the preferred trade buyer.

Gainers & Losers

Ashmore Group Plc fell 2.71% to 333.70 pence after the provider of investment management services said first-half total net revenue increased 17% to £173.7 million from £148.8 million in the comparable period.

Profit in the period rose 14.1% to £95.7 million or 13.52 pence per share compared to £83.9 million or 11.74 pence per share a year earlier.

British American Tobacco PLC declined 1.70% to $77.69 pence after the tobacco company reported fiscal year 2010 revenues grew 5% to £14.88 billion from £14.21 billion in the previous year. Profit for the year rose 6.3% to £2.88 billion or 144.4 pence per share from £2.71 billion or 136.3 pence per share in the prior year.

The company also said the board approved the resumption of its share buy-back program, with a value of up to £750 million.

Centrica plc dipped 0.15% to 334.60 pence after the British integrated energy company reported fiscal year 2010 revenues increased 2.1% to £22.42 billion from £21.96 billion in the comparable period. Full-year profit increased 130% to £1.94 billion or 37.3 pence per share compared to £844 million pounds or 16.4 pence per share in the prior-year period.

Hunting PLC rose 2.12% to 771.00 pence after the company engaged in the provision of oil and gas services stated full-year 2010 revenue grew 28.3% to £461.6 million from £359.9 million a year earlier. Profit in the period fell 24% to £21.8 million or 16.3 pence per share compared to £28.7 million or 21.4 pence per share last year.

Royal Bank of Scotland Group plc slumped 3.15% to 45.83 pence after the holding company of a global banking and financial services group reported fourth quarter net profit was £12 million compared to a loss of £1.14 billion a year earlier. Net interest income grew 3.8% to £3.58 billion from £3.45 billion in the same quarter a year ago.

RSA Insurance Group plc decreased 1.65% to 137.40 pence after the global general insurance company said fiscal year 2010 profit fell 15% to £355 million or 9.7 pence per share versus £419 million or 12.1 pence per share last year.