Market Updates

UK Retailers Fall on Sainsbury Sales

Mayank Mehta
07 Oct, 2009
New York City

    In UK, stocks kept their positive bias for the second day in a row. Retailers fell after J. Sainsbury reported lower than expected comparable same store sales growth. Michael Page, recruitment consultant third quarter profit fell 42%. Chocolate retailer Thorntons quarterly sales increased 2.3%.

[R]4:00 PM London, 11:00 AM New York – In the broader market stocks maintained their positive bias for the second day in a row. Retailers fell after J. Sainsbury reported lower than expected comparable same store sales growth. Michael Page, recruitment consultant third quarter profit fell 42%.[/R]

Stocks in London maintained their upward bias for the second after surging nearly 2% yesterday. Optimistic investors are still prepared to bid stocks ahead of earnings season as most investors expect better than consensus earnings published by brokerage industry.

In London, FTSE 100 Index closed lower 9.62 or 0.1% to 5,128.14 and the pound edged lower to close at $1.587 and edged higher at 1.082 euros.

Retailers closed weak after J. Sainsbury reported lower than expected comparable same store sales growth.

Gainers & Losers

Cobham plc fell 0.7% to 220.70 pence after the defense outfit said a new US military contract win this morning. The company received two delivery order valued at $40 million for the ongoing supply of its ROVIS digital vehicular intercom systems.

Cranswick plc added 1.7% to 709.50 pence after the sausages and pork products supplier said first-half sales increase of 19% is in line with expectations and company maintained margins despite higher pig prices.

Inspired Gaming Group plc decreased 5.8% to 12.00 pence after the server based gaming specialist extended its multi-year agreement with Stanleybet International to provide its Virtual Sports System across the Stanleybet estates.

J Sainsbury plc decreased 2.8% to 313.60 pence after the supermarket chain said in second quarter total sales rose 3.2% and 6.8% excluding fuel. Like-for-like sales increased 1.3% and sales excluding fuel rose 4.6%. Like-for-like sales excluding VAT and fuel were up 5.4%. The stock declined and dragged the other retailer lower after the company reported lower comparable sales than expected sales of 5.5%.

Michael Page International plc increased 6.0% to 350.00 pence after the recruitment company said third quarter group gross profit fell 42% to £82.2 million compared to gross profit of £141.3 million a year ago which was down £1.6 million or 1.9% than the second quarter of 2009. In the UK gross profit fell 39.4% to £27.3 million compared to £45.0 million a year ago.

Nighthawk Energy plc declined 2.1% to 34.75 pence and said full-year revenues rose 258% to $497,876 from $138,998 a year ago. Operating loss for the full-year was $2 million compared to operating loss of $3.5 million a year ago.

Novera Energy Plc surged 38.0% to 63.50 pence after the renewable energy group on Wednesday rejected a cash offer from private-equity backed peer and shareholder Infinis Energy, valuing the company at £90.5 million ($143.6 million).

Sportingbet Plc rose 6.9% to 72.75 pence an online sports betting and gaming group said full-year revenues rose 13.4% to £163.6 million from £144.3 million a year ago. Net profit for the full-year was £12.4 million or 4.2 pence per diluted share compared to net loss of £4.3 million or 0.5 pence per share a year ago.

Thorntons PLC advanced 4.8% to 123.75 pence after the chocolate maker and retailer said in the first quarter trading update for the 14 weeks to October 3 sales increased 2.3% to £46.8 million.

Tricorn Group plc the AIM listed tube manipulation specialist climbed 7.6% to 10.50 pence.

Walker Greenbank PLC increased 7.8% to 20.50 pence after the wallpaper and fabrics manufacturer said first-half revenues fell 12% to £29.1 million from £33.0 million a year ago. Net profit for the first-half fell 55% to £422,000 or 0.77 pence per diluted share compared to net profit of £936,000 or 1.70 pence per share a year ago.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 39 increased, 60 declined and 3 were unchanged.

Admiral Group Plc decliners in the FTSE 100 index with a loss of 3.29% followed by losses in J Sainsbury Plc of 3.28%, in Tullow Oil Plc of 3.23%, in Lonmin Plc of 2.73%, in Smith & Nephew Plc of 2.72%.

Aviva Plc led gainers in the FTSE 100 index with a rise of 3.80% followed by increase in InterContinental Hotels Group Plc of 3.32%, in Segro Plc of 2.33%, in Old Mutual Plc of 1.99%, in Rentokil Initial Plc of 1.92%.

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