Lloyds TSB Profit Up 10%, UK Stocks Fall

123jump.com Staff
22 Feb, 2008
New York City

Stocks in London declined, led by commodity stocks and retailers after brokerages downgraded their ratings on the industry as the outlook on both the domestic and global market continue to deteriorate. In London trading FTSE 100 fell 0.74% to 5,888.50 but rose 1.7% for the week. Lloyd TSB reported second half proit increase of 10% to

[R]1:00PM New York, 6:00PM London – Pret A Manger agreed to sell the company for £345 million. Lloyd TSB second half profit rose 10% to £1.75 billion or 30.8p.[/R]

Stocks in London declined led by commodity stocks and retailers after brokerages downgraded their ratings in the industry as the outlook on both the domestic and global market continue to deteriorate.

In London trading FTSE 100 fell 0.74% or 43.7 to 5,888.50 but rose 1.7% for the week.

Of the 102 FTSE 100 stocks 20 gained, 79 declined, and 3 were unchanged.

Alliance & Leicester led advancers in the FTSE 100 stocks with a rise of 6.36% after Lloyds TSB said second half profit rose 10% to £1.75 billion pounds. The bank also took a second half write-down of £280 million.

U.K banks to meet Treasury

Bloomberg news reported today that the British Bankers Association will be engaging the Treasury to establish how the recently nationalized Northern Rock will operate in the financial services sector.

BBA is reportedly working on proposals “for how we can work in a fair, open and competitive market”. The troubled lender was officially nationalized today after the British parliament gave its ascent.

FSA to open up hedge funds to consumers

The Financial Services Agency expressed a sign a progress on allowing UK retail consumers to invest in funds of hedge funds and other alternative investments authorized in the UK. The discussions between the fund management companies and investor protections organizations have now entered in the final stage.

Commented Dan Waters, FSA Director Retail Policy and Themes and Asset Management Sector Leader: “Permitting consumers access to a wider range of innovative investment strategies through authorized onshore vehicles will allow more choice and a better opportunity for risk diversification, while maintaining consumer protection through our proportionate rules on the operation of the product.”

The new consultation will close on May 22, 2008, and final adjustments ate expected before the end of the year.

Alliance & Leicester led advancers in the FTSE 100 stocks with a rise of 6.36% followed by gains in Lloyds TSB Group of 4.75%, in British Energy of 3.95%, in Centrica Plc of 3.34%, and in Shire Plc of 2.31%.

Alliance & Leicester and Lloyds TSB Group rose on increasing investor confidence in lenders after Barclays announced earlier results that lifted the market.

Lloyds TSB Group announced today that second half profits for the period ended December 31st were up 10% to £1.75 billion from £1.59 billion and second half write-downs eased to £280 million.

Vedanta Resources led decliners in the FTSE 100 stocks with a drop of 5.48% followed by losses in Next Plc of 4.86%, in Marks & Spencer of 4.55%, in Home Retail Group of 4.46%, in Sage Group of 4.26%.

Retailers also fell after Landsbanki Securities said earnings growth in the industry will continue to fall. Kingfisher plummeted 4.21% and Sainsbury shed 4.02%.

Company News

Allied Irish Banks Plc announced today that it has agreed to buy a 49.99% stake from Bulgarian-American Enterprise Fund for 216 million euros. The acquisition is part of a strategy by the company to pursue organic growth and penetrate eastern Europe.

British American Tobacco agreed to pay $1.7 billion for Tekel from Turkish government. The purchase will significantly expand BAT market share in the country.

More than 60% of men in Turkey are estimated to smoke and Turkey also levies lower taxes on cigarette than most European nations do on cigarette or other tobacco products.

Tekel, once the leading brand in Turkey has lost its market leading position with a current market share of 6%. In 2005, the brand held more than 45% market share.

Pret A Manger to sell for £345 million

Bridgepoint Capital Ltd agreed to pay £345 million or $675 million for the purchase of U.K. based sandwich chain. The food outlet company operates locations in London, New York, Hong Kong, and Singapore.

The press release form Bridgepoint Capital added that under the terms of the transaction, the founders and management, including Sinclair Beecham and Julian Metcalfe, will make a significant re-investment in the business.

McDonald''s, which acquired a 33% share in the company in 2001, will no longer be part of the business. Goldman Sachs, advisor to the deal, will take a minority stake in the company.

Founded in 1986, Pret A Manger has 200 shops (175 in the UK, 14 in the US, 11 in Hong Kong), employs almost 4,000 people and had sales in 2007 of £223 million (£194 million in 2006).

Sandwich chain expects to open at least 30 new locations in 2008, including seven in New York. Future roll-out will target London and the South East, UK regions and the US. UK sandwich shop market is estimated to be of £4.3 billion.

The company aims to expand its real estate footage by 15% in terms of unit numbers per year.