UK GDP Drops 4.9%; Wolseley Up 2%

Sarla Buch
30 Jun, 2009
New York City

UK benchmark indexes fell after the downward revision of the first quarter GDP. The revision raised the speculation that the annual GDP may decline more than the government estimate despite the large economic stimulus. The GDP decline from a year ago was the sharpest in five decades. The pound fell.

[R]6:00 PM London, 1:00 PM New York – UK benchmark indexes fell after the downward revision of the first quarter GDP. The revision raised the speculation that the annual GDP may decline more than the government estimate despite the large economic stimulus. The GDP decline from a year ago was the sharpest in five decades. The pound fell.[/R]

UK stocks closed lower after the first quarter GDP decline was revised lower. The GDP contraction was lowered primarily on the weakness in construction and manufacturing sectors.

In London FTSE 100 Index closed lower 44.82 or 1.04% to 4,249.21. The pound decreased 0.2% to $1.66.

UK GDP Revised Lower

UK GDP in real terms in the first quarter of 2009 declined by 2.4% compared with the previous quarter, revised lower from the last month’s estimate of 1.9% decline.

Around half of this revision comes from new data for the construction sector, and the remainder from more complete data for services.

The GDP is now 4.9% lower than the first quarter of 2008, the largest fall on record according to the latest data released by the Office of National Statistics.

Output of the production industries fell 5.1%, while service industries fell by 1.6%, with negative growth in all sub-industries except government and other services which grew by 0.2%.

Construction output fell 6.9% compared with a fall of 5.0% in the previous quarter.

Gainers & Losers

Arriva decreased 3.2% to 408.26 pence after it reported that six months revenues are in line with the company estimate but there is a weakness in long distance travel segment.

Carpetright declined 5% to 568 pence after it reported net profit decline of 72%.

Dana Petroleum increased 2.2% to 1,401 pence on a continued speculation of the company takeover.

HMV Group decreased 3.8% to 114.25 pence after it reported annual sales increased 4.4% and net income increased 17%.

Lloyds Banking Group decreased 0.03% to 70.54 pence after it eliminated 2,100 positions.

Management Consulting Group plunged 19.8% to 19.25 after it reported that company is likely to miss the revenues and earnings target for the year.

Pubs ‘n’ Bars dropped 10% to 4.25 pence after it reported 11% increase in sales and net loss of £8.9 million.

United Utilities Group decreased 1.9% to 499.25 pence after a consortium in which the company controls 40% won £225 million to supply capital equipment to Southern Water.

Wolseley increased 1.8% to 1,146 pence after chief executive Chip Hornsby resigned and Ian Meakins will replace him. Hornsby has been at the company for 27 years and led the company for the last three.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 26 increased, 74 declined and 2 were unchanged.

Randgold Resources Ltd. decliners in the FTSE 100 index with a loss of 3.14% followed by losses in Schroders plc of 3.07%, in Standard Chartered PLC of 2.98%, in Man Group Plc of 2.97% and in Anglo American plc of 2.73%.

Wolseley PLC led gainers in the FTSE 100 index with a rise of 2.84% followed by increase in Thomas Cook Group plc of 2.80%, in ICAP plc of 2.50%, in AMEC plc of 2.03%, in 3i Group plc of 1.89%.

Europe Markets Review

In London FTSE 100 Index closed lower 44.82 or 1.04% to 4,249.21, in Paris CAC 40 Index decreased 53.24 or 1.67% to close at 3,140.44 and in Frankfurt DAX index lower 76.45 or 1.56% to close at 4,808.64. In Zurich trading SMI decreased 39.48 or 0.73% to close at 5,403.97.

UK Earnings Review

Assura Group Limited, the healthcare firm said full-year revenues rose 19% to £48.3 million from £40.7 million a year ago. Net loss for the full-year was £110.8 million or 43.38 pence per diluted share compared to net profit of £14.1 million or 6.22 pence per share a year ago.

Brewin Dolphin Holdings PLC, the largest private client investment manager said first-half revenues fell 52% to £89.6 million from £187 million a year ago. Net profit for the first-half fell 62.5% to £9.4 million or 4.4 pence per diluted share compared to net profit of £25.1 million or 11.7 pence per share a year ago.

Carpetright plc, a specialist floor covering retailer said full-year revenues fell 7.4% to £482.8 million from £521.5 million a year ago. Net profit for the full-year fell 72.4% to £11.8 million or 17.6 pence per diluted share compared to net profit of £42.8 million or 63.2 pence per share a year ago.

HMV Group plc, a music and book retailer said full-year revenues rose 4.4% to £1.96 billion from £1.87 billion a year ago. Net profit for the full-year fell 50.3% to £44.2 million or 10.7 pence per diluted share compared to net profit of £89.0 million or 22.0 pence per share a year ago.

Management Consulting Group, a support services company expected revenues six-month period ended 30 June 2009 in the range of £150m to £160m from £166.7 million. Underlying operating profit for the first six months would be between £11.5 million and £12.5 million, down from 15.1 million a year earlier.

Pubs ‘n’ Bars Plc, a pub operator said full-year revenues rose 11% to £22.3 million. Pre-tax loss for the full-year was £8.9 million compared to net profit of £341,960 a year ago.

Pursuit Dynamics PLC, a biofuel-tech group said first-half revenues fell 96.5% to £7,826 from £225,005 a year ago. Net loss for the first-half was £3.3 million or 5.54 pence per diluted share compared to net loss of £3.8 million or 6.48 pence per share a year ago.

Safestore Holdings plc, a storage company said first-half revenues rose 3.3% to £41.3 million from £40.0 million a year ago. Net loss for the first-half was £6.8 million or 3.60 pence per diluted share compared to net profit of £20.5 million or 10.96 pence per share a year ago.

Scott Wilson Group plc, a design and engineering consultancy said full-year revenues rose 11% to £360.0 million from £324.2 million a year ago. Net profit for the full-year fell 42% to £7.7 million or 10.17 pence per diluted share compared to net profit of £13.3 million or 17.09 pence per share a year ago.

The Capital Pub Company PLC, the pub operator said full-year revenues rose 5% to £19.8 million from £18.8 million a year ago. Net profit for the full-year rose 13% to £540,000 or 2.72 pence per diluted share compared to net profit of £478,000 or 2.36 pence per share a year ago.

Titan Europe Plc, an industrial wheels and undercarriages maker expects a loss in first-half. Revenue for the first half of 2009 is expected to be around 35% lower than the first half of 2008.

Vision Media Group (International) plc, the outdoor media contractor said full-year revenues fell 12.5% to £1.4 million from £1.6 million a year ago. Net loss for the full-year was £7.2 million or 10.22 pence per diluted share compared to net loss of £5.5 million or 24.52 pence per share a year ago.