UK Construction at 21-Month High; Cairn Acquires Norway

Arthi Gupta
03 Apr, 2012
New York City

The UK indexes edged lower and construction sector activity rose to a 21-month high in March. Cairn Energy agreed to buy Norway-based Agora Oil & Gas AS for $450 million.

[R]4:30 PM London – The UK indexes edged lower and construction sector activity rose to a 21-month high in March. Cairn Energy agreed to buy Norway-based Agora Oil & Gas AS for $450 million.[/R]

The UK indexes dropped after the British Chambers of Commerce said the UK economy may avoid a recession this year but expects the economy to expand 0.3% in the first quarter, offsetting a 0.3% contraction in the fourth quarter.

However, the industry group stated economic growth remains ""weak.""

The industry association estimated a 0.6% expansion for the current year, weaker than the 0.8% growth projected by the Office for Budget Responsibility.

UK construction activity improved in March.

In London trading, the benchmark index FTSE 100 fell 11.80 or 0.2% to 5,863.36 and the pound edged lower to $1.5971.

UK Construction Activity Climbs

The seasonally adjusted purchasing managers'' index for the construction sector in the UK improved to 56.7 in March from 54.3 in February, data from a survey by Markit Economics and the Chartered Institute of Purchasing and Supply (CIPS) showed today.

New orders received by UK construction firms increased at the fastest rate in four-and-half years in March.

Gainers & Losers

Ashtead Group plc rose 1.5% to 268.70 pence after the investment holding and management company acquired Philadelphia-based Topp Construction Services and its related company Precision Steel Works for a total consideration of $33.5 million in cash.

Cairn Energy Plc soared 3.6% to 332 pence after the independent energy explorer agreed to buy Norway-based Agora Oil & Gas AS for $450 million in cash and stock.

Compass Group plc, the caterer fell 1.6% to 660 pence after a broker downgrade.

Huntsworth plc slumped 3.4% to 49.50 pence after the public relations and integrated healthcare communications group said fiscal year 2011 group revenues rose 1.5% to £176.3 million from £173.6 million in 2010.

Operating profits after central costs declined 20.6% to £23.5 million compared to £29.6 million in 2010.

Xstrata PLC gained 1.5% to 1,113 pence after the diversified mining company reported Australia-based Origin Energy acquired a 51% interest in Xstrata Copper’s Energía Austral hydroelectric development company in Chile. Xstrata Copper will retain a 49% stake.