UK Retail Sales, Construction Fall; Osborne Survives Reshuffle

Arthi Gupta
04 Sep, 2012
New York City

The UK indexes slid after retail sales fell and construction contracted in August at the second fastest pace since snow storm in March 2010. Bottomline agreed to acquire Albany Software.

[R]3:00 PM London – The UK indexes slid after retail sales fell and construction contracted in August at the second fastest pace since snow storm in March 2010. Bottomline agreed to acquire Albany Software.[/R]

The UK indexes dropped ahead of the European Central Bank policy meeting on Thursday. Retail sales fell and the construction sector data pointed to an ongoing deterioration in business conditions.

In addition, Prime Minister David Cameron reorganized his cabinet and Chancellor of Exchequer George Osborne survived the reshuffle after meeting several lowered budgetary projections.

In London, the benchmark index FTSE 100 declined 51.76 or 0.9% to 5,706.65 and the pound edged lower to $1.5880.

UK Retail Sales Drop

Retail sales in the UK fell in August, the British Retail Consortium said today.

UK retail sales values were down 0.4% on a like-for-like basis in August compared to the 0.6% drop in the preceding year. On a total basis, sales were up 1.6% in August, against a 1.5% rise in August 2011.

UK Construction PMI Falls

The UK construction sector data pointed to an ongoing deterioration in business conditions in August, survey results from Markit Economics showed today.

The Markit/Chartered Institute of Purchasing & Supply Construction Purchasing Managers'' Index declined to 49 in August from 50.9 in July.

The orders in the month declined at the second fastest pace since March 2010 when snow storms disrupted business activities. The latest monthly contraction is expected to add to the near 10% fall in construction in the first half this year.

Gainers & Losers

Of the stocks in the FTSE 100 index, Petrofac Ltd gained 1.3% to 1,536 pence and led the gainers in the index after a broker upgrade. Pennon Group added 0.7% and Capital edged up 0.4%.

Evraz decreased 2.8% and led the decliners in the index followed by Land Securities Group down 2.2% and Vodafone and Xstrata fell more than 2%.

Ashtead Group plc soared 11.3% to 314.40 pence after the industrial equipment rental company said first quarter revenue rose to £325 million from £268.6 million in the same quarter a year ago. Operating profit for the quarter rose to £73.8 million from £46.2 million last year.

British American Tobacco declined 1.8% to 3,273 pence after Russian health ministry proposed a ban on smoking in public places from November 1. Russian Federation is the second largest market for cigarettes maker.

Bottomline Technologies gained regulatory clearance to acquire Albany Software Ltd., a maker of retail payment automation.

Craneware plc soared 8.2% to 354.36 pence after the automated revenue integrity solutions provider reported fiscal year revenue increased 8% to $41.07 million from the prior year. Profit before tax increased 29% to $11.20 million from $8.65 million last year.

DS Smith plc surged 3.8% to 168.10 pence after the recycled packing supplier said it was trading in line with current market expectations for substantial annual earnings per share growth.

Vodafone Group Plc, the cell phone operator fell 2.2% to 179.15 pence on a broker downgrade.