UK Home Prices Recover; Rolls Royce, BT Gain

Mayank Mehta
30 Jul, 2009
New York City

UK stocks closed up as metals gain and earnings lift large cap companies and home price rise. Nationwide Building Society estimated 1.3% home price increase July. Rolls Royce adjusted profit beats estimates.

[R]6:00 PM London, 1:00 PM New York – UK stocks closed up as metals gain and earnings lift large cap companies and home price rise. Nationwide Building Society estimated 1.3% home price increase July. Rolls Royce adjusted profit beats estimates.[/R]

Stocks in London generally traded higher as earnings lifted trading sentiment. BT Group, Rolls Royce, Brit Insurance, British American Tobacco and Travis Perkins met or exceeded investor earnings estimates.

Mining companies closed higher on a rally in metals prices. BHP Billiton, Xstrata, Vedanta Resources and Rio Tinto closed up.

In London FTSE 100 Index closed higher 15.38 or 0.35% to 4,361.84 and the pound closed at $1.64 and 1.16 euros.

Nationwide Building Society estimated home prices increased 1.3% in July after gaining 1% in June to £158,871. The prices increased 2.6% in the three months to July.

Gainers & Losers

AstraZeneca PLC rose 1.6% to 2,849.50 pence after the withdrawal of two generic competitors to heart drug Toprol XL helped boost second quarter sales and raise full-year earnings targets.

BAE Systems plc sank 3.9% to 315.00 pence after the biggest weapons maker said first-half revenues rose 28% to £9.94 billion from £7.74 billion a year ago. Net loss t for the first-half was £82 million or 2.3 pence per diluted share compared net profit of £586 million or 16.6 pence per share a year ago.

Brit Insurance Holdings PLC rose 1.5% to 203.00 pence after the general insurance and reinsurance group said first-half net written premiums rose 37% to £792.1 million from £577.7 million a year ago. Net loss t for the first-half was £6.3 million or 2.0 pence per diluted share compared net profit of £37.6 million or 12.2 pence per share a year ago.

British American Tobacco plc rose 1.2% to 1,862.00 pence after the tobacco firm hiked its dividend by a quarter and profits increased on new acquisitions. Pre-tax profits in the six months to June 30 climbed to £2.1 billion from £1.8 billion over the same period the previous year as revenues rose to £19.1 billion from £15 billion.

BT Group plc jumped 10.6% to 124.70 pence after the communications services company said first quarter sales rose 1.1% to £5.24 billion from £5.18 billion a year ago. Net profit for the quarter fell 43% to £214 million or 2.7 pence per diluted share compared net profit of £381 million or 4.8 pence per share a year ago.

Halma Plc jumped 2.6% to 191.25 pence after the health and sensor group said trading during the first quarter of the financial year has been in line with expectations.

Pennon Group Plc dropped 4.4% to 447.00 pence after the water firm said it has been performing in line with management expectations and intends to offer £120 million of senior unsecured convertible bonds.

Reed Elsevier plc plunged 14.1% to 412.50 pence after specialist publisher has announced plans to raise about 10% of its capital through a placing to pay off debts after an acquisition. Profit before taxes plunged to £188 million from £393 million.

Smith & Nephew plc added 1.1% to 480.25 pence after the knee and hip joint supplier posted a rise in second quarter profits but expects its products which serve the younger more active patient segment to face greater challenges.

Pre-tax profit increased to $176 million in the quarter ended 27 June from $157 million in the prior year period. Revenues were slightly lower at $926 million compared to $1 billion last year.

Travis Perkins plc gained 9.2% to 765.00 pence after the building materials supplier posted a 27% drop in half year pre-tax profit and the company estimated that in recent months markets are beginning to stabilize.

The group that owns Wickes home improvement stores said pre-tax profit fell to £90.4 million in the six months ended from £124.5 million the year before.

Trinity Mirror plc surged 10.4% to 79.00 pence after the publisher of the Daily Mirror newspaper and a host of local titles, posted a slide in revenues as ad sales continued to tumble but said the decline is slowing. Revenue in the year to 28 June fell to £383 million from £460 million the previous year.

VT Group plc fell 0.6% to 453.75 pence after the defence firm said it has made a good start to the financial year and continues to trade in line with expectations.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 83 increased, 17 declined and 2 were unchanged.

Reed Elsevier Plc decliners in the FTSE 100 index with a loss of 12.55% followed by losses in BAE System Plc of 4.88%, in Centrica Plc of 2.92%, in Pennon Group Plc of 2.62%, in Severn Trent Plc of 2.06%.

BT Group Plc led gainers in the FTSE 100 index with a rise of 12.60% followed by increase in Wolseley Plc of 10.17%, in Rolls-Royce Group Plc of 8.73%, in Lonmin Plc of 8.37%, in Eurasian Natural Resources Corporation Plc of 8.32%.