UK GDP Shrinks 0.6%, TUI Bonds Offering

Mayank Mehta
29 Sep, 2009
New York City

UK second quarter GDP was revised to a decrease of 0.6% from the first quarter or 5.5% annual rate decline. The previous estimate was 0.7% fall. TUI Travel on track and raises

[R]4:00 PM London, 11:00 AM New York – UK second quarter GDP was revised to a decrease of 0.6% from the first quarter or 5.5% annual rate decline. The previous estimate was 0.7% fall. TUI Travel on track and raises £440 million for loan refinancing. Mortgage loans issuance increased to 21-month high.[/R]

UK stocks traded sideways after the release of GDP data and mixed bag of economic news in the U.S. Market rally of more than six months appear to be tired as cautious investors stay on sidelines.

In London FTSE 100 Index closed higher 3.50 or 0.07% to 5,169.20 and the pound edged up to $1.592 and at €1.095.

The Office of National Statistics revised its estimate of the GDP decline to 0.6% from 0.7% estimate. The economy contracted at 2.5% in the first quarter. In the second quarter manufacturing declined 0.1% and construction fell 0.8% compared to previous estimate of 2.2%. Service sector decrease was unchanged at 0.6%.

The Bank of England said the banks increased mortgage loans in August to 52,317, the highest since April 2008.

Gainers & Losers

A.G. BARR plc added 2.7% to 770.00 pence after the drinks maker said first-half sales rose 27.1% to £104.7 million from £82.4 million a year ago. Pre-tax profit for the first-half rose 19.5% to £13.5 million compared to pre-tax profit of £11.3 million a year ago.

Ariana Resources plc decreased 8.8% to 4.10 pence after the gold exploration and development company said first-half loss was £191 million or 0.13 pence per diluted share compared to net loss of £327 million or 0.41 pence per share a year ago.

Close Brothers Group plc advanced 1.3% to 795.00 pence after the financial services company said full-year net interest income rose 8.3% to £181.8 million from £167.8 million a year ago. Net profit for the full-year fell 20% to £71.7 million or 43.2 pence per diluted share compared to net profit of £90.0 million or 57.5 pence per share a year ago.

Compass Group PLC advanced 2.7% to 369.30 pence after the contract caterer said that for fiscal 2009 it expects underlying earnings per share on constant currency basis to grow 14%. The company reported earnings per share of £0.218 for fiscal 2008.

Daily Mail and General Trust PLC increased 4.6% to 460.80 pence after the media business said that for fiscal 2009 it expects adjusted profits to meet at least meet market expectations on £150 million in cost cutting. Revenues in the eleven months to August fell 9% and the company expects to meet £180 million in net income for the year.

Dairy Crest Group plc rose 2.3% to 385.60 pence after the largest milk and cheese processor said sales to large retail chain customers increased 10% in the first half after increasing at 4% in the first quarter. The company chief executive Mark Allen in an interview with Bloomberg attributed to the recent increase on rising awareness after a marketing campaign.

The company also initiated Internet registry for home delivery of milk and 100,000 of its 1.3 million customers have registered.

Enterprise Inns plc rose 0.9% to 136.20 pence after the pub group said that there has been no material change in its trading performance since July.

MITIE Group PLC fell 1.2% to 250.10 pence after the support services group said that for the first half of fiscal 2010 it expects revenue to be marginally ahead of the prior year before the impact of the acquisition of DTFM in August 2009.

Moss Bros Group Plc climbed 1.8% to 29.52 pence after the menswear retailer said first-half sales fell 0.6% to £60.8 million. Pre-tax loss for the fell first-half was £3.0 million compared to pre-tax loss of £2.2 million a year ago.

Oxford Catalysts Group PLC fell 7.6% to 66.00 pence after the clean-fuel company said first-half net interest income rose to £3.5 million from £0.2 million a year ago. Pre-tax loss for the first-half was £3.8 million pre-tax loss of £1.3 million a year ago.

Renishaw plc the manufacture of precision metrology and inspection equipment increased 3.1% to 568.50 pence.

Shed Media Plc fell 1.1% to 85.00 pence after the TV program maker and distributor said first-half revenues rose 36% to £46.5 million from £34.2 million a year ago. Adjusted pre-tax profit for the first-half rose 34% to £5.1 million compared to adjusted pre-tax profit of £3.8 million a year ago.

The company also expressed confidence for the full-year outlook.

TUI Travel PLC dropped 0.8% to 263.80 pence after the Europe’s largest tour operator plans to raise £440 million to refinance its £900 million loan from its parent. The company will offer £300 million in unsecured convertible bonds and banks will loan £140 million.

The tour operator also expressed satisfaction with its performance and said it is on track to meet its full-year earnings outlook.