UK Stocks Fall 2%; Land Securities Plunges

123jump.com Staff
13 May, 2009
New York City

UK stocks declined after the central bank offered cautionary outlook. Land Securities plunged after it reported weaker than expected results. J. Sainsbury annual net income increased 12%. Johnston Press plunged 38% on debt covenant issues.

[R]6:00PM London – UK stocks declined after the central bank offered cautionary outlook. Land Securities plunged after it reported weaker than expected results. J. Sainsbury annual net income increased 12%. Johnston Press plunged 38% on debt covenant issues.[/R]

Stocks in London trading declined after the Bank of England Governor King offered cautionary outlook for the economy and inflation. He also stressed that economic recovery will be slow and will occur over longer period of time and credit will remain restricted for some time.

The benchmark index FTSE 100 index decreased 2.1% or 94.17 to 4,331.37.

Gainers & Losers

Land Securities, the largest real estate trust plunged 13.2% to 468 pence after it reported weaker than expected results. The developer also said that its adjusted gearing increased to 96.4% at end of the quarter from 64.9% at the end of prior year quarter. The company real estate portfolio valuation deficit increased to £4.74 billion from £1.29 billion.

Compass Group Plc increased 6% or 20.25 pence to 353 pence after first half-revenues increased 24% and net profit surged 33%.

J. Sainsbury Plc decreased 1.5% or 5.25 pence declined 335.00 pence after the supermarket chain operator said full-year sales rose 5.7% to £20.38 billion from £19.29 billion a year ago and net profit for the quarter fell 12% to £289 million or £16.4 per diluted share.

Johnston Press Plc plunged 38% or 11.75 to 19.25 pence after the publishing company reported over the 19 weeks to May 9 total advertising revenues were down 34.4% compared to the same period last year. The company expects the costs to decline by £30 million despite the increase in newsprint costs.

The publisher also cautioned in the release on its Web site, “If the sale of the Irish businesses were not successfully completed, there would be a strong likelihood of a breach of a financial covenant in the Group''s debt facilities during 2009.”

Earnings News

Compass Group PLC, U.K.-based caterer said first-half revenues rose 24% to £6.93 billion from £6.69 billion a year ago. Net profit for the quarter rose 33% to £284 million compared to net profit of £213 million a year ago.

Compass Group PLC, in the last one year traded as high as 396.25 pence in June 2008 and as low as 235.50 pence in November 2008. Based on the yesterday’s closing price of 355.75 pence the company has market cap of £6.57 billion.

FirstGroup plc, UK-based transport operator said full-year revenues rose 31.4% to £6.19 billion from £4.71 billion a year ago. Net profit for the quarter rose 19% to £143.3 million or £0.30 per diluted share compared to net profit of £120.4 million or £27.4 per share a year ago.

FirstGroup plc, in the last one year traded as high as 657.50 pence in September 2008 and as low as 192.90 pence in March 2009. Based on the yesterday’s closing price of 367.50 pence the company has market cap of £1.77 billion.

J Sainsbury plc, UK-based supermarket chain operator said full-year sales rose 5.7% to £20.38 billion from £19.29 billion a year ago. Net profit for the quarter fell 12% to £289 million or £16.4 per diluted share compared to net profit of £329 million or £18.6 per share a year ago.

J Sainsbury plc, in the last one year traded as high as 403.00 pence in May 2008 and as low as 236.50 pence in October 2008. Based on the yesterday’s closing price of 338.50 pence the company has market cap of £5.93 billion.

VT Group PLC, the defense and support services company said full-year revenues rose 40% to £1.02 billion from £730.9 million a year ago. Net profit for the quarter rose 90% to £107.8 million or £59.5 per diluted share compared to net profit of £56.8 million or £31.4 per share a year ago.

VT Group PLC, in the last one year traded as high as 702.00 pence in June 2008 and as low as 412.75 pence in May 2009. Based on the yesterday’s closing price of 480.75 pence the company has market cap of £856.66 million.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 21 increased, 81 declined and 0 were unchanged.

Land Securities Group plc decliners in the FTSE 100 index with a loss of 13.17% followed by losses in Xstrata plc, of 12.77%, in The Royal Bank of Scotland Group plc, 12.64%, in Eurasian Natural Resources Corporation PLC of 11.94% and in Hammerson PLC of 11.69%.

Compass Group PLC led gainers in the FTSE 100 index with a rise of 6.09% followed by increase in Shire plc of 2.75%, in Royal Dutch Shell plc B of 2.25%, in Severn Trent Plc of 1.61%, in Royal Dutch Shell plc A of 1.55%, in British American Tobacco plc of 1.53%.

Europe Markets Review

In London FTSE 100 Index closed lower 94.17 or 2.13% to 4,331.37, in Paris CAC 40 Index decreased 78.20 or 2.42% to close at 3,152.90 and in Frankfurt DAX index lower 126.50 or 2.61% to close at 4,727.61. In Zurich trading SMI decreased 68.66 or 1.28% to close at 5,277.37.