UK Inflation Falls; Marks & Spencer Dividend Cut

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

UK stocks closed higher. Marks & Spencer declined after it cut its dividend by one third. ICAP, the interbank broker reported higher profit. Vodafone net declined and Tate & Lyle replaced in chief executive. Burberry reported a net loss for the year.

[R]7:00PM London – UK stocks closed higher. Marks & Spencer declined after it cut its dividend by one third. ICAP, the interbank broker reported higher profit. Vodafone net declined and Tate & Lyle replaced in chief executive. Burberry reported a net loss for the year.[/R]

Rising metals and energy prices, weak inflation and ongoing talks of stake sale in banks between the UK government and private investors supported a mild rise in indexes.

In London, FTSE 100 Index closed higher 35.80 or 0.81% to 4,482.25. The British pound rose 1.3% to $1.55 and 0.4% to 1.36 euros. The gilt increased after the Bank of England completed its purchase of 3.5 billion pounds of bonds.

The consumer price index in April increased 2.3% from a year ago after increasing at 2.9% rate in March, according to the latest data released by the Office of National Statistics.

The all items retail price index also known as RPI declined 1.2% in April compared to a fall of 0.4% March. The All items index excluding mortgage interest payment increased 1.7%, down from 2.2% in March.

The decline in interest rate by 0.5% helped the fall in interest payment but costs of telecommunication rose. Transportation cost contribution increased after the excise duty was raise in April. The average cost of petrol per litre in the April increased 4 pence to 94.4 pence.

Gainers & Losers

Burberry Group dropped 1.4% to 395.75 pence after it reported net loss on 21% rise in revenues.

ICAP Plc increased 5.6% or 22.50 pence to 422 pence after it reported full year revenues increase of 23% and net profit increased 4%.

Marks & Spencer Group dropped 8.1% to 311.75 pence after it reported profit decline 38% and cut its dividend by one third to 15 pence. Same store sales in the UK locations declined 5.9%.

Tate & Lyle Plc increased 8.2% to 296 pence after it named new chief executive Javed Ahmed. Mr. Ahmed is currently executive vice president for the European division of Reckitt Benckiser and a director at Tate and he will replace the current chief Iain Ferguson.

Vodafone Group Plc declined 4% to 122.40 pence after forecasted weaker outlook and reported 54% plunge in earnings.

William Morrison Supermarkets Plc surged 18.5% to 118.50 pence.

Earnings Review

Burberry Group plc, British luxury fashion company said full-year revenues rose 21% to £1.2 billion from £995.4 million a year ago. Net loss in the year was £6 million or £1.4 per diluted share compared to net profit of £135.2 million or £30.5 per share a year ago.

Dairy Crest Group plc, engaged in the manufacture and trading of milk and dairy products said full-year revenues rose 5% to £1.65 billion from £1.57 billion a year ago. Net profit in the year rose 38.6% to £75.4 million or £56.3 per diluted share compared to net profit of £54.4 million or £40.8 per share a year ago.

Great Portland Estates plc, a central London property investment and development company said full-year net loss in the year was £436.1 million or £241.1 per diluted share compared to net loss of £4.1 million or £2.2 per share a year ago.

Homeserve plc, engaged in the provision of insured repair solutions and emergency services to the home said full-year sales fell 7% to £517.4 million from £554.9 million a year ago. Net loss in the year was £35.31 million or £56.2 per diluted share compared to net profit of £49.28 million or £76.0 per share a year ago.

ICAP plc, the world’s biggest broker of transactions said full-year sales rose 23% to £1.6 billion from £1.3 billion a year ago. Net profit in the year rose 4.2% to £175 million or £26.9 per diluted share compared to net profit of £168 million or £25.8 per share a year ago.

Marks and Spencer Group, the U.K.’s biggest clothing retailer said full-year sales rose 0.4% to £9.06 billion from £9.02 billion a year ago. Net profit in the year fell 38% to £508.0 million or £32.3 per diluted share compared to net profit of £821.7 million or £48.7 per share a year ago.

Paragon Group of Companies PLC, engaged in the operation of its first mortgage and consumer finance businesses said first-half net interest income fell 7% to £68.0 million from £73.2 million a year ago. Net profit in the first-half fell 39% to £11.2 million or £3.8 per diluted share compared to net profit of £18.4 million or £15.6 per share a year ago.

Renovo Group plc, a United Kingdom-based biopharmaceutical product company said first-half sales rose 6% to £4.13 million from £3.9 million a year ago. Net loss in the first-half was £6.97 million or £3.7 per diluted share compared to net loss of £5.35 million or £2.9 per share a year ago.

SSL International plc, engaged in the non-core products and brands said full-year sales rose 20.3% to £642.4 million from £533.9 million a year ago. Net profit in the year was £54.5 million or £27.4 per diluted share compared to net loss of £2.9 million or £1.5 per share a year ago.

TUI Travel PLC, an international leisure travel group said first-half sales rose 4.3% to £5.38 billion from £5.16 billion a year ago. Net loss in the first-half was £333.5 million or £30.1 per diluted share compared to net loss of £306.8 million or £27.7 per share a year ago.

Vectura Group plc, engaged in the research and development of therapeutic products said full-year sales rose 24% to £31.2 million from £25.2 million a year ago. Net loss in the year was £16.7 million or £5.2 per diluted share compared to net loss of £19.2 million or £6.1 per share a year ago.

Victrex plc, engaged in the manufacturing and selling of polymers said first-half sales fell 31% to £ 47.36 million from £ 68.51 million a year ago. Net profit in the first-half fell 62.4% to £7.27 million or £8.8 per diluted share compared to net profit of £19.33 million or £23.5 per share a year ago.

Vodafone Group Plc, the world’s largest mobile-phone company said full-year sales rose 16% to £41.02 billion from £35.48 billion a year ago. Net profit in the year fell 54.3% to £3.08 billion or £5.81 per diluted share compared to net profit of £6.76 billion or £12.50 per share a year ago.


FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 68 increased, 33 declined and 1 were unchanged.

Marks and Spencer Group Plc decliners in the FTSE 100 index with a loss of 8.11% followed by losses in Vodafone Group Plc, of 3.96%, in Cairn Energ Plc, 2.40%, in Next Plc of 2.05% and in British American Tobacco Plc of 1.92%.

Anglo American Plc led gainers in the FTSE 100 index with a rise of 7.53% followed by increase in Aviva Plc of 7.29%, in Land Securities Group Plc of 6.24%, in Legal & General Group Plc of 5.86%, in Standard Life Plc of 5.73%.

Europe Markets Review

In London FTSE 100 Index closed higher 35.80 or 0.81% to 4,482.25, in Paris CAC 40 Index increased 29.57 or 0.91% to close at 3,274.96 and in Frankfurt DAX index higher 107.66 or 2.22% to close at 4,959.62. In Zurich trading SMI increased 63.68 or 1.17% to close at 5,498.80.