UK Stocks Rebound; BT Dividend Cut

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

UK stocks attempted a rebound after brokers recommended banks and mortgage lenders. Royal Mail returns to profit after heavy cost cuts. ITV revenues decline and look for more cost savings. Invensys surges on an increase in orders and a dividend hike. National Grid looks for rate hike.

[R]6:00PM London – UK stocks attempted a rebound after brokers made recommendations to buy banks and mortgage lenders. Royal Mail returns to profit after heavy cost cuts. ITV revenues decline and look for more cost cutting. Invensys surges on an increase in orders and a dividend hike.[/R]

Stocks in UK traded sideways and closed higher. Investors appeared willing to take more risk after three days of declines in the island nation and in the European region.

In London FTSE 100 Index closed higher 31.21 or 0.72% to 4,362.58.

Royal Mail, the mail, parcel and logistics services provider reported revenue for the full-year increased 2% to £9.56 billion and operating profit of £321 million compared to £162 million from a year ago.

Daily mail volume fell 5.5% from a year ago to 75 million letters and is expected to fall another 10% in the current fiscal year. Every 1% decline costs £70 million in revenues.

Gainers & Losers

BT Group declined after it reported loss of nearly £1 billion and lowered its annual dividend to 6.5 pence from 15.8 pence.

ITV declined 4.6% to 31 pence after it reported revenues in the first quarter declined 14% to £425 million and the broadcaster is looking for additional savings of £40 million in the year and cost savings will increase to £215 million in 2010 and £285 million in 2011.

Invensys Plc surged 13% to 224 pence after it reported annual 9.5% increase in annual revenues and earnings drop of 61%. The company also recommended a dividend of 1.5 pence.

The company noted in the press release, “The very high levels of orders received in the year gives us good visibility into the current year and our pipeline of export order prospects remains strong.”

National Grid increase 0.3% to 584.50 pence after it sought higher rates and reported revenues rise of 37% and net profit decline of 70% for the full year.

SAB Miller increased 1% or 11 pence to 1,231 pence despite revenues increased 6% and earnings declined 7% for the year. The company also offered cautionary outlook for the current year.

Tate & Lyle Plc plunged 10% to 255.25 pence after the company was removed from the group of MSCI Barra indexes.

Earnings Review

BTG Plc, the specialty pharmaceuticals company said full-year revenues rose 13.1% to $84.8 million from $75.0 million a year ago. Net loss for the quarter was $13.1 million or $7.1 per diluted share compared to net profit of $8.8 million or $5.9 per share a year ago.

BTG Plc, in the last one year traded as high as 243.75 pence in September 2008 and as low as 108.00 pence in October 2008. Based on the yesterday’s closing price of 150.50 pence the company has market cap of £384.42 million.

BT Group plc, the U.K.’s largest phone company said fourth quarter revenues rose 1% to £5.47 billion from £5.42 billion a year ago. Net loss for the quarter was £977 million or £12.6 per diluted share compared to net profit of £426 million or £5.3 per share a year ago.

BT Group plc, in the last one year traded as high as 239.75 pence in May 2008 and as low as 70.20 pence in March 2009. Based on the yesterday’s closing price of 92.60 pence the company has market cap of £7.17 billion.

Invensys PLC, British engineering company said full-year revenues rose 9.5% to £2.3 billion from £2.1 billion a year ago. Net profit for the quarter fell 61% to £130 million or £16.1 per diluted share compared to net profit of £334 million or £41.5 per share a year ago.

Invensys PLC, in the last one year traded as high as 346.75 pence in May 2008 and as low as 115.80 pence in November 2008. Based on the yesterday’s closing price of 213.50 pence the company has market cap of £1.71 billion.

National Grid plc, the electricity and gas company said full-year revenues rose 37% to £15.62 billion from £11.42 billion a year ago. Net profit for the quarter fell 70% to £944 million or £38.2 per diluted share compared to net profit of £3.19 billion or £121.6 per share a year ago.

National Grid plc, in the last one year traded as high as 754.00 pence in May 2008 and as low as 511.00 pence in March 2009. Based on the yesterday’s closing price of 576.00 pence the company has market cap of £14.00 billion.

SABMiller plc, the world’s second- biggest brewer said full-year revenues rose 6% to $25.3 billion from $23.8 billion a year ago. Net profit for the quarter fell 7% to $1.88 billion or $1.25 per diluted share compared to net profit of $2.02 billion or $1.34 per share a year ago.

SABMiller plc, in the last one year traded as high as 1,371.00 pence in June 2008 and as low as 758.00 pence in October 2008. Based on the yesterday’s closing price of 1,220.00 pence the company has market cap of £19.39 billion.

Thomas Cook Group plc, U.K. based tour operator said first-half revenues rose 12.6% to £3.48 billion from £3.09 billion a year ago. Net loss for the quarter was £206.4 million or £24.2 per diluted share compared to net loss of £175 million or £17.9 per share a year ago.

Thomas Cook Group plc, in the last one year traded as high as 303.50 pence in May 2009 and as low as 123.60 pence in November 2008. Based on the yesterday’s closing price of 231.00 pence the company has market cap of £1.98 billion.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 75 increased, 27 declined and 0 were unchanged.

Thomas Cook Group plc decliners in the FTSE 100 index with a loss of 7.31% followed by losses in BT Group plc, of 6.36%, in Petrofac Limited, 6.13%, in Inmarsat Plc of 5.89% and in Anglo American plc of 1.97%.

Invensys PLC led gainers in the FTSE 100 index with a rise of 13.25% followed by increase in Fresnillo Plc of 11.68%, in Standard Chartered PLC of 8.13%, in Prudential plc of 6.59%, in Friends Provident PLC of 5.76%, in Kazakhmys PLC of 5.29%.

Europe Markets Review

In London FTSE 100 Index closed higher 31.21 or 0.72% to 4,362.58, in Paris CAC 40 Index increased 3.39 or 0.11% to close at 3,156.29 and in Frankfurt DAX index higher 10.86 or 0.23% to close at 4,738.47. In Zurich trading SMI increased 82.63 or 1.57% to close at 5,360.00.