UK Stocks Fall; Marks & Spencer Sales Fall

123jump.com Staff
07 Jan, 2009
New York City

Scottish & Southern Energy to issue 40 million shares worth

[R]1:00PM New York, 6:00PM London- Scottish & Southern Energy to issue 40 million shares worth £500 million. Marks & Spencer group sales decline 1.2% in 13 weeks to December 27.[/R]

London stock indexes dropped today after Scottish & Southern Energy announced that it will issue new shares to boost its balance sheet and fund its expansion programs in Scotland and Ireland.

Retailers helped pare losses after Marks & Spencer reported sales declined less than forecasted.

In London trading FTSE 100 index fell 2.8% or 131.41 to 4,507.51.

Of the FTSE 100 index stocks, 18 increased, 83 declined, and one was unchanged. 31 Group led advancers in the index shares with a rise of 5.9% followed by HBOS Plc increasing 5.5%.

Scottish & Southern to Place 40 million shares

Scottish & Southern Energy (SSE) reported today that it will place 40 million shares worth £500 million andd boost its balance sheet and fund expansion projects.

The 40 million shares represent 5% of the company’s share capital.

SSE said the new shares will carry the right to SSE’s interim dividend of 19.8 pence per share declared on November 12, 2008, payable on March 27, 2009 to shareholders on the register on February 20, 2009 and also subsequent dividends.

Funding raised will be used for “significant investment opportunities worth £6.7 billion over five years” that include wind farms in Scotland and Ireland.

Scottish & Southern Energy said the company is currently trading within expectations and will deliver a full year dividend of 66 pence per shares on March 31.

Marks & Spencer Sales Fall 1.2%

Marks & Spencer reported today that group sales in the 13-week period to December 27, 2008 declined 1.2% on worsening economic conditions. However international sales advanced 26.9% in the review period.

U.K. sales dropped 3.4%, general merchandise sales shed 8.9% and food sales declined 1.1%. And, sales in clothing plunged 6.5%, while home sales gained 1%.

Like-for-like sales in the U.K. fell 7.1% dragged by 8.9% decline in general merchandise and 5.2% in food plummeting 8.9% and 5.2%.

Online sales jumped 29%.

Marks & Spencer will undergo a restructure and close 27 stores, eliminate 780 jobs and reduce headcount at the head office by 15% or 450 jobs.

The retailer will cap employees'' annual increases in pensionable pay to 1% and change the early retirement benefits for members who joined the scheme before 1996.

Marks & Spencer will control capital expenditure below £700 million for the current fiscal year and £400 million for the next fiscal year.

Chairman Stuart Rose said, “We maintained our market share in Clothing with particularly good performances in Kids and Lingerie. Volumes were strong across all areas of Clothing. We expect challenging economic conditions to continue for at least the next 12 months.”

Gainers & Losers

3i Group led advancers in the FTSE 100 index shares with a rise of 5.9% followed by increases in HBOS Plc of 5.5%, in Lloyds TSB Group of 4.1%, in Barclays of 4%, and Legal & Group of 3.1%.

Retailers also increased as Marks & Spencer reported that the sales decline was less than forecasted. Marks & Spencer gained 2.2% and Tesco edged up 1.4%.

Man Group led decliners in the FTSE 100 index shares with a decline of 9.4% followed by losses in Cairn Energy of 8.4%, in Antofagasta of 8.3%, in Scottish & South Energy of 8.2%, and BHP Billiton of 8%.

Energy stocks dropped as crude oil prices plunged $4 to $44 per barrel. Gold prices also shed $13.5 to $846.2 per ounce. Rio Tinto declined 6%, Vedanta Resources tumbled 5.1%, and Anglo America shed 5.8%.

Europe Markets Review

In London FTSE 100 Index closed lower 131.41 or 2.83% to 4,507.51, in Paris CAC 40 Index decreased 50.13 or 1.48% to close at 3,346.09 and in Frankfurt DAX index lower 88.84 or 1.77% to close at 4,937.47. In Zurich trading SMI decreased 37.62 or 0.65% to close at 5,761.69.