UK Stocks Flat; Marston's Plunges

Trupti Mehta
18 Jun, 2009
New York City

UK stocks ended flat in a choppy trading after the release of weaker than expected retail sales in May. Marston

[R]7:00 PM London, 2:00 PM New York – UK stocks ended flat in a choppy trading after the release of weaker than expected retail sales in May. Marston’s and GKN are the latest two companies to raise capital after Sainsbury completed its public offering of £443 million.[/R]

Retail sales volume in May declined 0.6% from April sales and 1.6% from a year ago month after consumers avoided non-food items. The three months to May retail sales increased 0.6% from a year ago period.

In London FTSE 100 Index closed higher 2.40 or 0.06% to 4,280.86 and retailers declined.

The Council of Mortgage Lenders said gross mortgage lending in May decrease to £10.3 billion from £10.5 billion in April but higher than £10 billion in February.

Gainers & Losers

Carnival Plc jumped 7.2% to 1,517 pence after it reported second quarter profit declined 33% from a year ago. The largest cruise operator also lowered its full year earnings range between $2 and $.10 a share from the previous outlook between $2.10 and $2.30 a share.

Dana Petroleum Plc surged 6.3% to 1,322 pence after continued media speculation that the company is a takeover target.

Retailers closed lower after weaker than expected retail sales. Next plc declined 2.3% to 1,428 pence, DSG dropped 6.2% to 22.50 pence, home Retail Group declined 0.4% and Kingfisher fell 1%.

Mulberry Group increased 4.3% to 67.75 pence after it reported a profit decline for the year but also indicated positive outlook for the year.

The engineering firm, GKN dropped but recovered to close up after it indicated a rights offering of 6–for-5 to raise £423 million. The sales in the first five months to May were £1.8 billion.

Marston’s, the owner and operator of pubs dropped 15.9% to 118 pence after it offered 11 for 10 rights offering to raise £176 million and the like-for-like sales for the sixteen weeks to June 6 were up 1.1%. The company also estimated pre-tax profits for the year before exceptional items to be at least £69 million.

Marston’s will offer 298.9 million shares to shareholders at 59 pence a share.
Ashtead surged 6.10% to 56.50 pence after it reported 22% decline in full year pre-tax profit and left its current year earnings outlook unchanged.

Earnings Review

Alexon Group plc, a fashion retailer said like-for-like sales for the 17 weeks to 13 June 2009 declined by 10.5%. In February like-for-like sales were fell 12%.

Alexon Group plc, in the last one year traded as high as 169.50 pence in June 2008 and as low 10.00 pence in March 2009. Based on the yesterday’s closing price of 50.00 pence the company has market cap of £22.76 million.

Ashtead Group plc, a industrial equipment rental company said fourth quarter revenues rose 7.3% to £262.6 million from £244.8 million a year ago. Net loss in the quarter was £16.7 million or £3.3 per diluted share compared to net profit of £17.5 million or £3.3 per share a year ago.

Revenues for the fiscal year 2008 rose 6.7% to £1.12 billion from £1.05 billion a year ago. Net profit in the year fell 18.8% to £63.0 million or 12.5 pence per diluted share compared to net profit of £77.6 million or 14.10 pence per share a year ago.

Ashtead Group plc, in the last one year traded as high as 86.00 pence in September 2008 and as low 24.50 pence in December 2008. Based on the yesterday’s closing price of 56.50 pence the company has market cap of £279.35 million.

Mulberry Group PLC, a handbag maker said full-year revenues rose 14% to £58.6 million from £51.2 million a year ago. Net profit in the year fell 23.5% to £2.6 million or £4.5 per diluted share compared to net profit of £3.4 million or £6.0 per share a year ago.

Mulberry Group PLC, in the last one year traded as high as 145.00 pence in September 2008 and as low 57.00 pence in June 2009. Based on the yesterday’s closing price of 71.00 pence the company has market cap of £40.77 million.

J Sainsbury plc, the grocery retailer said total sales for the first quarter rose 3.2%. Like-for-like sales for the first quarter rose 2.5%. Like-for-like sales rose 7.8% excluding fuel and VAT. Company completed public offering of £242 million of equity offering and £190 million of convertible bond offering.

J Sainsbury plc, in the last one year traded as high as 380.25 pence in August 2008 and as low 236.50 pence in October 2008. Based on the yesterday’s closing price of 313.00 pence the company has market cap of £5.51 million.

Europe Markets Review

In London FTSE 100 Index closed higher 2.40 or 0.06% to 4,280.86, in Paris CAC 40 Index increased 32.92 or 1.04% to close at 3,194.06 and in Frankfurt DAX index higher 37.50 or 0.78% to close at 4,837.48. In Zurich trading SMI increased 74.55 or 1.41% to close at 5,376.84.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 46 increased, 55 declined and 1 were unchanged.

Rio Tinto plc decliners in the FTSE 100 index with a loss of 4.87% followed by losses in Rexam PLC of 3.59%, in Aviva plc of 3.27%, in Fresnillo Plc of 3.08% and in Intercontinental Hotels Group PLC of 2.76%.

Carnival plc led gainers in the FTSE 100 index with a rise of 7.16% followed by increase in Man Group Plc of 4.09%, in Lloyds Banking Group plc of 3.28%, in RSA Insurance Group plc of 2.83%, in The Royal Bank of Scotland Group plc of 2.70%.