Barclays, HSBC Earnings Lift UK Stocks

Mayank Mehta
03 Aug, 2009
New York City

Stocks in London closed higher after Barclays and HSBC reported profit in the first half. Celsis receives 232.5 pence cash offer. Sport Media Group surges on higher earnings estimate and an increase in circulation. Ultra Electronics lifts sales and profit estimate.

[R]6:00 PM London, 1:00 PM New York – Stocks in London closed higher after Barclays and HSBC reported profit in the first half. Celsis receives 232.5 pence cash offer. Sport Media Group surges on higher earnings estimate and an increase in circulation. Ultra Electronics lifts sales and profit estimate.[/R]

The better than expected profits at HSBC and Barclays lifted trading sentiment in London. HSBC reported profit and net profit at Barclays in the first half surged 10%.

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.

Petrofac Ltd surged 11.5% to 837 pence after UBS recommended stock on higher energy price estimate and improved business outlook.

Gainers & Losers

888 Holdings Public Limited Company increased 3.2% to 84.95 pence after the Online gambling firm posted a fall in operating income as poker revenues softened.

AstraZeneca PLC slipped 0.07% to 2,801.00 after it has received approval from the US Food and Drug Administration for the use of its ONGLYZA to treat type 2 diabetes in adults.

Barclays PLC advanced 6.6% to 322.50 pence after the bank said first-half net interest income rose 9.6% to £5.7 billion from £5.2 billion a year ago. Net profit for the first-half rose 10% to £1.89 billion or 17.1 pence per diluted share compared to net profit of £1.72 billion or 26.2 pence per share a year ago.

Celsis International plc rose 11.5% to 227.00 pence after the diagnostics group has agreed to a cash offer worth 232.5 pence per share or £54.5 million in total from private equity group North Atlantic Value.

Elementis plc added 17.4% to 37.00 pence after the specialty chemicals company said first-half revenues fell 8% to £172.2 million from £186.9 million a year ago. Net loss for the first-half was £30.5 million or 6.9 pence per diluted share compared to net profit of £23.1 million or 5.2 pence per share a year ago.

Fidessa Group plc fell 3.3% to 1,167.00 pence after the software company said first-half sales rose 36.5% to £116.0 million from £85.0 million a year ago. Net profit for the first-half fell 56% to £8.2 million or 23.2 pence per diluted share compared to net profit of £18.5 million or 52.1 pence per share a year ago.

Hammerson PLC decreased 0.4% to 343.20 pence after the commercial property group reported losses doubled to £819 million in the first half and net asset value plunged 27.7% to 373 pence.

HSBC Holdings plc rose 5.8% to 641.40 pence after pre-tax profit more than halved at in the first six months of 2009 but ahead of market expectations. The bank warned that the economic outlook remains uncertain.

The banking giant posted a profit before tax of $5 billion during the period down from $10.2 billion a year ago.

Intertek Group plc surged 4.5% to 1,086.00 pence after the quality and safety services provider said first-half sales rose 36.1% to £622.3 million from £457.4 million a year ago. Net profit for the first-half rose 50% to £59.3 million or 36.9 pence per diluted share compared to net profit of £39.5 million or 24.8 pence per share a year ago.

Management Consulting Group plc rose 24.00 pence after the support services company said first-half revenues fell 7% to £155.1 million from £166.7 million a year ago. The company broke even in the first half compared to net loss of £23.6 million a year ago.

Mitchells & Butlers plc added 3.2% to 268.80 pence after the pub group confirmed the appointment Adam Fowle as chief executive after two months in the acting position. Fowle has been a board member for two years.

Senior plc decreased 0.6% to 40.00 pence an international manufacturing group said first-half revenues fell 1% to £275.9 million from £279.9 million a year ago. Net profit for the first-half fell 23% to £15.6 million or 3.87 pence per diluted share compared to net profit of £20.3 million or 5.06 pence per share a year ago.

Shire plc rose 0.06% to 888.50 pence after the pharmaceutical company received positive results from the first of three Phase III studies of its enzyme replacement therapy to Type 1 Gaucher disease. The genetic defect causes the accumulation of fatty substance in organs such as liver, brain, spleen and kidneys.

Sport Media Group Plc surged 22.6% to 4.60 pence after the tabloid newspaper publisher said profitability and cash generation is running ahead of budgets after implementing cost savings and lifting circulations.

Ultra Electronics Holdings plc rose 3.3% to 1,178.00 pence after the defence contractor first-half sales rose 40% to £325.5 million from £231.9 million a year ago. Net profit for the first-half rose 10.8% to £166.7 million compared to net profit of £150.4 billion a year ago.

Xchanging plc rose 2.0% to 196.00 pence after the global business processor said first-half revenues fell 38% to £367.1 million from £266.8 million a year ago. Net profit for the first-half fell 53.5% to £5.3 million or 2.19 pence per diluted share compared to net profit of £11.4 million or 5.10 pence per share a year ago.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 67 increased, 33 declined and 2 were unchanged.

British Sky Broadcasting Group Plc decliners in the FTSE 100 index with a loss of 2.84% followed by losses in Imperial Tobacco Group Plc of 2.45%, in Reckitt Benckiser Group Plc of 2.36%, in British American Tobacco Plc of 1.88%, in SABMiller Plc of 1.73%.

Petrofac Limited Plc led gainers in the FTSE 100 index with a rise of 11.53% followed by increase in Kazakhmys Plc of 8.76%, in Eurasian Natural Resources Corporation Plc of 7.12%, in Xstrata Plc of 7.09%, in Barclays Plc of 6.70%.

Europe Markets Review

In London FTSE 100 Index closed higher 74.10 or 1.61% to 4,682.46, in Paris CAC 40 Index increased 51.53 or 1.50% to close at 3,477.80 and in Frankfurt DAX index higher 94.71 or 1.78% to close at 5,426.85. In Zurich trading SMI increased 16.74 or 0.28% to close at 5,967.43.