UK Manufacturing Advances; Miners Gain

Mayank Mehta
08 Sep, 2009
New York City

UK stocks edged higher after commodities prices increased and UK manufacturing index suggested a sharp gain in July. Deutsche Telekom and France Telecom agreed to form merge operations to form the largest mobile phone service provider in UK. Miners jumped on a rise in copper, gold and silver prices.

[R]4:00PM London, 11:00 AM New York – UK stocks edged higher after commodities prices increased and UK manufacturing index suggested a sharp gain in July. Miners jumped on a rise in copper, gold and silver prices. Deutsche Telekom and France Telecom agreed to form merge operations to form the largest mobile phone service provider in UK.[/R]

The UK manufacturing output increased 0.9% n July after rising 0.6% in June according to the latest statistics from the Office for National Statistics. The production decreased 10.1% from a year ago month. Overall industrial production, which includes output of mining and utilities and energy exploration, increased 0.5% in the month.

In London FTSE 100 Index closed higher 16.92 or 0.3% to 4,951.01 and the pound gained to close $1.65 and unchanged at 1.14 euros.

Deutsche Telekom AG and France Telecom agreed to form an equally owned joint-venture to merge their UK operations. The combined company will save 4 billion euros in maintenance and marketing costs and have 28.4 million customers.

The two companies will stay in joint venture for three years and keep Orange and T-Mobile brands separate for eighteen months after the deal is finalized.

The companies are planning to spend between £600 and £800 million through 2014 to eliminate overlapping cell phone towers and retail locations.

Gainers & Losers

Gold, silver and copper miners led the gainers in trading. Kazakhmys added 6%, Fresnillo increased 5.2% and Anglo American edged up 1.5%. Gold traded above $1,000 and silver traded as high as $16.55 in New York.

Abcam plc surged 10.9% to 810.00 pence an antibody supplier said full-year revenues rose 55.2% to £56.8 million from £36.6 million a year ago. Net profit for the full-year rose 108.7% to £12.29 million or 34.17 pence per diluted share compared to net profit of £5.89 million or 16.56 pence per share a year ago.

Advanced Medical Solutions Group plc fell 3.2% to 28.55 pence after the maker of wound care products said first-half revenues fell 51% to £9.9 million from £20.3 million a year ago. Net loss for the first-half was £24,000 or 0.02 pence per diluted share compared to net profit of £3.3 million or 2.16 pence per share a year ago.

Ashtead Group plc added 6.6% to 85.30 pence an industrial equipment rental company said first quarter revenues fell 18.5% to £222.8 million from £273.4 million a year ago. Net profit for the quarter fell 93.4% to £5.4 million or 1.1 pence per diluted share compared to net profit of £82.2 million or 15.9 pence per share a year ago.

BAE Systems plc decreased 0.7% to 323.60 pence after the aerospace and defense group wins $80 million deal to build defense ground station. Separately, the company filed a complaint with the U.S. government agency to review a US Army decision for a vehicle contract to a competitor Oshkosh.

Clean Air Power Limited surged 10.5% to 21.00 pence after the developer of dual-fuel combustion technology said first-half revenues rose 14% to £3.33 million from £2.93 million a year ago. Net loss for the first-half was £1.01 million or 2.0 pence per diluted share compared to net loss of £1.16 million or 4.0 pence per share a year ago.

DS Smith plc surged 10.1% to 91.40 pence after the cardboard and paper supplier said rising input costs may impact the second half earnings.

DSG International Plc an electrical and computing retailer declined 0.4% to 29.38 pence.

Greene King plc increased 2.1% to 490.60 pence after the strong food sales helped like-for-like sales at managed pubs in England increased 4.6% in the 17 weeks to Aug. 30.

Immedia Group Plc surged 33.3% to 8.00 pence after the company which provides bespoke radio stations for retail chains announced that it has signed a two year contract extension to provide ''IKEA LIVE'' to all 21 IKEA stores across the UK.

Interior Services Group plc increased 5.4% to 184.00 pence after the building contractor said full-year revenues fell 3.7% to £1.05 billion from £1.09 billion a year ago. Net profit for the full-year fell 14.6% to £8.52 million or 29.63 pence per diluted share compared to net profit of £9.98 million or 36.06 pence per share a year ago.

Kingfisher plc added 1.5% to 220.40 pence after the company said that it expects to report adjusted pre-tax profit in the range of £285 million and £290 million for the six months to end of July.

The Medical House PLC surged 11.8% to 26.00 pence after the drug injection devices developer said it has received its first two notices of allowance from the US Patent and Trade Mark Office regarding patents for its ASITM auto-injector device technology.

Regency Mines plc jumped 25.0% to 2.50 pence after the mining exploration and mineral investment company said it has now received all results from cores drilled on the Mambare plateau of its Botue-Mambare lateritic-nickel-cobalt project in Papua New Guinea and it regards the results as highly encouraging and as justifying acceleration in the pace of exploration of the property.

Redstone plc increased 7.6% to 3.50 pence after the heavily indebted IT and telecoms group announced that for fiscal 2009 it expects adjusted EBITDA to be between £5 million and £6 million.

Staffline Recruitment Group plc fell 3.5% to 55.00 pence after the recruitment and training specialist said first-half revenues fell 11% to £49.1 million from £54.9 million a year ago. Net profit for the first-half rose 2.6% to £959,000 or 4.4 pence per diluted share compared to net profit of £935,000 or 4.3 pence per share a year ago.

SOCO International plc fell 0.7% to 1,316.00 pence after the company abandoned the exploration well off the coast of the Republic of Congo. The offshore sample drilling suggested that the reservoir was saturated with water and not sufficient quantity of oil.

Total Produce plc rose 3.0% to 34.50 pence after the fruit and vegetable distributor said first-half revenues rose 1.2% to €1.31 billion from €1.3 billion a year ago. Net profit for the first-half fell 5.3% to €12.02 million or €3.42 cents per diluted share compared to net profit of €12.69 million or €3.61 cents per share a year ago.