UK Inflation, Output Drops; Kesa Falls on Loss

Arthi Gupta
07 Dec, 2011
New York City

The UK indexes declined on the worries that more banks may be downgraded. The industrial and manufacturing production in UK declined more than estimated in October and shop price inflation eased to a one-year low in November. Kesa Electricals plunged 7.5%.

[R]2:30 PM London – The UK indexes declined on the worries that more banks may be downgraded. The industrial and manufacturing production in UK declined more than estimated in October and shop price inflation eased to a one-year low in November. Kesa Electricals plunged 7.5%.[/R]

UK indexes turned lower ahead of the upcoming EU summit in Brussels tomorrow.

Euro-zone leaders are preparing to use two independent bailout funds with a larger support from the International Monetary Fund, according to sources close to the European Commission. The leaders are also looking for ways to accelerate the purchase of sovereign bonds by the European Central Bank.

In London, FTSE 100 Index dropped 23.39 or 0.4% to 5,545.21 and the pound edged lower to $1.5602.

UK Shop Price Inflation Eases

The British Retail Consortium said the BRC-Nielsen shop price index in the UK rose 2% from a year ago in November, the weakest pace in one year compared to the 2.1% rise in October.

Food inflation eased to 4% in November from 4.2% in October. Non-food inflation remained unchanged at 0.8% in November.

UK Industrial Output Drops

The UK''s industrial and manufacturing production declined more than estimated in October, the Office for National Statistics said today.

Industrial production and manufacturing output dropped 0.7% each on a monthly basis in October. The energy and manufacturing sectors fell 4.9% and 0.7% respectively in October.

On a yearly basis, industrial production declined 1.7% but manufacturing output rose 0.3% in October.

Gainers & Losers

Aer Lingus Group plc gained 2.1% to €0.73 pence after the Irish low-cost, low-fares airline reported a 6.7% growth in November passenger traffic, as a result of a 2.4% rise in capacity and a 3.1 percentage point improvement in load factor.

Traffic, as measured in revenue passenger kilometers, rose to 1.01 billion in November from 946 million a year ago. Load factor was 75.4% this year compared to 72.3% in 2010.

A.G. BARR p.l.c. rose 1.7% to 1,202 pence after the manufacturer of soft drinks said revenue for the 18 weeks from July 31 rose 5.6% from the same period last year.

DS Smith Plc climbed 1.8% to 202.60 pence after the packaging company reported first-half revenue grew 26% to £1.035 billion from £822.2 million last year. Profit in the period rose 18.4% to £28.9 million or 6.5 pence per share compared to profit of £24.4 million or 5.7 pence per share a year ago.

In addition, the company said its board recommended an interim dividend for the first-half of 2.8 pence per share, an increase of 40% from last year.

Kesa Electricals Plc plunged 7.5% to 75.60 pence after the electrical and electronic retailer reported first-half revenues declined 7.6% to €2.57 billion from €2.78 billion in the same period last year. Pre-tax loss in the period was €147.7 million compared to a profit of €27.2 million in the previous year.

Stagecoach Group Plc soared 3.9% to 258.20 pence after the public transport company reported first-half revenue grew 14.2% to £1.29 billion from £1.13 billion in the prior year, on stronger organic growth across the bus and rail businesses.

Pre-tax profit in the period declined 17% to £90 million compared to £108.3 million last year.