UK Unemployment Rises; LSE Revenues Fall

Trupti Mehta
15 Jul, 2009
New York City

Stocks in London surged after the miners and insurance companies rallied. The sharp gain in copper and other base metals lifted the stocks in resource sectors. Insurance companies gained on takeover rumors. UK unemployment claims increase in June, record high in 12 years.

[R]6:00 PM London, 1:00 PM New York – Stocks in London surged after the miners and insurance companies rallied. The sharp gain in copper and other base metals lifted the stocks in resource sectors. Insurance companies gained on takeover rumors. UK unemployment claims increase in June, record high in 12 years.[/R]

In London FTSE 100 Index closed higher 108.78 or 2.57% to 4,346.46

UK unemployment increased 23,800 in June from May to 1.56 million according to the latest data released by the Office of National Statistics. The unemployment is record high in 12 years as manufacturing, financial services and retail sector shed jobs.

Gainers & Losers

Miners and insurers lead the gainers on the prospect of consolidation in the industry and economic recovery.

Rio Tinto surged 4.2% to 2,104 pence, Kazakhmys increased 5.9% to 678 pence and Fresnillo added 5.3% to 561 pence.

RSA Insurance Group increased 1.9% on the rumors of a takeover. Legal & General and Prudential also close higher.

Acergy S.A., a seabed-to-surface engineering and construction contractor said second quarter revenues fell 25.5% to $525.5 million from $705.6 million a year ago.Net profit for the quarter rose 24.4% to $76.9 million or 41 cents per diluted share compared to net profit of $61.8 million or 35 cents per share a year ago.

Blacks Leisure Group plc declined 1% to 49 pence after the outdoor clothing retailer said in the first 19 weeks to 11 July 2009 like-for-like sales for the group fell 1.8%. Outdoor sales fell 1.6% and boardwear decreased 3.2%.

[Burberry Group plc edged up 0.06% to 427 pence a luxury fashion group said first quarter revenues rose 8.5% to £229 million from £211 million a year ago. Total licensing revenue in the quarter fell 3% on an underlying basis and 12% on reported basis. Wholesale revenue fell 28% while retail revenue was flat on a comparable basis. In the year to March 2010, Burberry expects underlying licensing revenue to decline by between 10% and 15%.

Business Post Group plc, a mail company said that “it had made a satisfactory start to the year, trading in line with management expectations. Group revenues from April 1 to June 30 fell by around 4% year on year but when adjusted for the number of working days, were in line with revenues from last year. Revenues in specialist Services, on an underlying basis, were slightly ahead of last year.’’

Business Post Group plc, in the last one year traded as high as 331.00 pence in May 2009 and as low as 210.00 pence in December 2008. Based on the yesterday’s closing price of 290.00 pence the company has market cap of £158.56 million.

ICAP plc decreased 2.8% to 430.75 pence after the inter-dealer broker said group revenue grew by over 10% in the quarter ended 30 June 2009 compared with the same period in the previous year.

ICAP plc, in the last one year traded as high as 516.00 pence in August 2008 and as low as 206.50 pence in February 2009. Based on the yesterday’s closing price of 435.00 pence the company has market cap of £2.83 billion.

J D Wetherspoon plc decreaed 0.1% to 428 pence after the pub operator said sales for fourth quarter rose 3.1%. Like-for-like sales fell 0.8%. Like-for-like sales in the 50 weeks to July 2009 increased 1.2% and overall sales rose 5.2%. The company said that “n the light of our sales and margin performance, we are confident about the outlook for the current financial year.’’

J D Wetherspoon plc, in the last one year traded as high as 464.75 pence in April 2009 and as low as 174.75 pence in July 2008. Based on the yesterday’s closing price of 437.00 pence the company has market cap of £606.74 million.

Land Securities surged 5.1% to 463 pence after the company indicated initial interest in acquiring two development properties in West London.

London Stock Exchange increased 3.6% to 676 pence after it reported first quarter revenues declined 8% to £161.9 million.

Northern Foods plc dropped 12.7% to 62 pence after the food manufacturer said first quarter like-for-like sales rose 5.5%. The chilled division grew sales by 9.2%, while bakery sales rose 6.8%. Frozen foods sales fell 1.5%. Expectations for sales and profits in the half and full year remain unchanged. Balance sheet remains strong. Net debt is similar to the prior year quarter. The company made a good start to the new financial year.

Northern Foods plc, in the last one year traded as high as 72.75 pence in September 2008 and as low as 37.00 pence in March 2009. Based on the yesterday’s closing price of 58.25 pence the company has market cap of £299.48 million.

Thorntons PLC closed unchanged at 75 pence the confectionary retailer said overall sales for fourth quarter fell 7% to £27.9 million and second-half sales rose 6.6% to £86.4 million, own store sales fell 0.9% in the quarter to £18.5 million, but increased 2.2% in the second-half to £53.8 million. Like for like sales in the quarter fell 1.6%, but rose 1.5% in the second half. Franchise sales for the quarter declined by 25.3% to £1.4 million and fell 0.5% in second-half.

Thorntons PLC, in the last one year traded as high as 130.00 pence in September 2008 and as low as 39.00 pence in February 2009. Based on the yesterday’s closing price of 72.50 pence the company has market cap of £49.55 million.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 99 increased, 3 declined and none were unchanged.

ICAP Plc decliners in the FTSE 100 index with a loss of 2.77% followed by losses in Reckitt Benckiser Group Plc of 0.18%, in GlaxoSmithKline plc of 0.04%.

Xstrata plc led gainers in the FTSE 100 index with a rise of 8.42% followed by increase in Old Mutual Plc of 7.20%, in Legal & General Group Plc of 6.74%, in Kazakhmys PLC of 5.93%, in Man Group Plc of 5.78%.

Europe Markets Review

In London FTSE 100 Index closed higher 108.78 or 2.57% to 4,346.46, in Paris CAC 40 Index increased 89.40 or 2.90% to close at 3,171.27 and in Frankfurt DAX index higher 146.75 or 3.07% to close at 4,928.44. In Zurich trading SMI increased 108.28 or 2.02% to close at 5,473.33.