UK Inflation Jump, Pound Eases; BAE Cuts Jobs

Mayank Mehta
15 Sep, 2009
New York City

UK stocks edged higher and the pound declined after comments from the Bank of England Governor King. The central bank may lower the rates paid to banks on the deposits. BAE Systems will eliminate 1,116 jobs in the UK and close a plant in the northern UK.

[R]4:00PM London, 11:00 AM New York – UK stocks edged higher and the pound declined after comments from the Bank of England Governor King. The central bank may lower the rates paid to banks on the deposits. BAE Systems will eliminate 1,116 jobs in the UK and close a plant in the northern UK.[/R]

The latest UK inflation data suggested higher than expected inflation as energy prices gained. August consumer prices index increased at 1.6% from a year ago after rising at 1.8% in the previous month. The pound did not react to the inflation report but closed weaker in the late afternoon after comments from the Bank of England Governor Mervyn King.

The Bank of England may offer lower rates to institutions leaving deposits with the central bank. The governor offered the proposal in an exchange with lawmakers today.

In London FTSE 100 Index closed higher 34.85 or 0.6% to 5,053.70 and the pound declined to $1.64 and 1.12 euros.

Gainers & Losers

Ashmore Group plc declined 1.0% to 229.00 pence after the emerging markets fund manager said total net revenue of £203.5 million decreased 15% from fiscal year 2008 £240.0 million. Profit before tax of £159.8 million a decreased of 19% from a year ago.

Anite plc fell 2.7% to 36.00 pence after the information technology solutions provider said that first-half profit will be significantly lower than a year ago on less favorable currency movements.

BAE Systems Plc increased 1% to 343 pence and the defence contractor plans to eliminate 1,116 jobs in the UK and close a factory in Woodford, UK.

BG Group plc rose 1.9% to 1,131.00 pence after the energy company partners Petrobras and Repsol said Tuesday that they have made a new discovery in the Santos Basin pre-salt BM-S-9 concession area, offshore Brazil.

Bglobal plc surged 36.9% to 50.00 pence after the smart metering specialist said that it has signed an agreement with Superdrug, the UK''s beauty and health retailer to install smart meters at all of its UK stores totaling over 900 sites. The installation program is planned to commence by the end of September 2009.

Billington Holdings Plc fell 5.8% to 160.00 pence after the manufacture of structural steel for the construction industry said first half year revenue and profits are ahead of last year. In the six months ended June 30, revenue increased by 5.3% to £37.4 million while profit before tax from continuing operations was up 9.3% to £2.53 million.

Colefax Group PLC the luxury furnishing fabrics and wallpapers declined 5.1% to 111.00 pence.

DataCash Group plc decreased 4.7% to 229.50 pence after the payment service provider said first-half revenues rose 47% to £18.0 million from £12.2 million a year ago. Pre-tax profit for the first-half fell 18% to £2.7 million compared to pre-tax profit of £3.3 million a year ago.

Debenhams plc decreased 3.3% to 82.20 pence after the department store chain said gross transaction value for the year to 29 August 2009 was 0.2% higher than the previous year. The company also indicated that operating earnings are expected to be ahead of last year and in line with management’s expectations.

Dunelm Group plc surged 11.6% to 311.50 pence after the specialist housewares retailer said first-half revenues rose 8% to £423.8 million from £391.8 million a year ago. Net profit for the first-half rose 11.6% to £37.6 million or 18.6 pence per diluted share compared to net loss of £33.7 million or 16.6 pence per share a year ago.

Energetix Group plc added 4.8% to 54.00 pence after the provider of alternative energy products for global markets said first-half revenues rose 300% to £0.12 million from £0.03 million a year ago. Net profit for the first-half rose 92% to £1.6 million or 2.95 pence per diluted share compared to net loss of £845,000 or 1.51 pence per share a year ago.

Fairpoint Group plc rose 59.00 pence after the consumer debt advisor said first-half revenues fell 0.6% to £13.76 million from £13.84 million a year ago. Net profit for the first-half was £1.53 million or 3.58 pence per diluted share compared to net loss of £954,000 or 2.23 pence per share a year ago.

Hallin Marine Subsea International Plc fell 5.8% to 128.50 pence after the provider of subsea solutions to the oil and gas industry said first-half revenues rose 1.2% to $60.3 million from $59.6 million a year ago. Net profit for the first-half fell 25% to $8.4 million or 18.75 cents per diluted share compared to net profit of $11.2 million or 26.46 cents per share a year ago.

InterQuest Group plc decreased 0.9% to 50.00 pence after the specialist IT recruitment firm said first-half revenues fell 8% to £49.2 million from £59.6 million a year ago. Pre-tax profit for the first-half fell 55% to £0.9 million compared to pre-tax profit of £2 million a year ago.

ITV plc declined 5.3% to 49.78 pence after the Competition Commission said that it did not advocate the cancellation of terms of contract rights renewals. The stock fell after investors were hoping the cancellation would allow the company to pay lower.

Spark Ventures plc the internet investment specialist rose 1.8% to 6.75 pence.

The TEG Group Plc fell 0.2% to 40.88 pence an in-vessel composting technology provider said first-half revenues fell 31.8% to £4.5 million from £6.6 million a year ago. Net profit for the first-half was £55,000 or 0.11 pence per diluted share compared to net loss of £535,000 or 1.11 pence per share a year ago.

WIN plc fell 2.9% to 67.00 pence after the mobile phone services company declared an interim dividend of one pence which will be payable on October 23, 2009 to shareholders on the register on September 25, 2009, matching the rates a year ago.

Zenergy Power plc decreased 1.5% to 126.00 pence after the superconductor energy technology company said first-half revenues fell 79.5% to €214,000 from €1.04 million a year ago. Net loss for the first-half was €4.99 million or €0.11 per diluted share compared to net loss of €2.50 million or €0.06 per share a year ago.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 64 increased, 38 declined and 0 were unchanged.

Home Retail Group Plc decliners in the FTSE 100 index with a loss of 3.37% followed by losses in Kingfisher Plc of 2.65%, in Icap Plc of 2.57%, in Burberry Group Plc of 2.36%, in Smiths Group Plc of 2.24%.

BT Group Plc led gainers in the FTSE 100 index with a rise of 4.85% followed by increase in Fresnillo Plc of 4.15%, in Johnson Matthey Plc of 3.58%, in Cairn Energy Plc of 3.31%, in Man Group Plc of 3.24%.