BAA Sells Gatwick; Cadbury Lifts Outlook

Mayank Mehta
21 Oct, 2009
New York City

UK stocks closed nearly unchanged after early losses. BAA Ltd sold Gatwick airport for

[R]4:00PM London, 11:00 AM New York – UK stocks closed nearly unchanged after early losses. BAA Ltd sold Gatwick airport for £1.51 billion and will book a loss of 142 million euros. Cadbury Plc lifted its annual revenues and earnings outlook. The Bank of England committee voted unanimously to keep asset purchase plan intact.[/R]

UK stocks rebounded from earlier losses and managed to close nearly unchanged. Financials were weak and commodities related stocks closed mixed.

The Monetary Policy Committee at the Bank of England voted unanimously to keep the asset purchase program at £175 million, according to the minutes of meeting released today.

In London FTSE 100 Index closed higher 1.51 or 0.03% to 5,244.91 and the pound edged higher to close at $1.661 and at 1.108 euros.

BAA Ltd, operated by the Spain based Grupo Ferrovial SA agreed to sell Gatwick Airport to Global Infrastructure for £1.51 billion under the pressure from the UK anti-trust regulators. BAA will use £1 billion of the proceeds to pay down debt. Global Infrastructure is controlled by General Electric and Credit Suisse SA.

Grupo Ferrovial said that it will book a loss of 142 million euros and had purchased the BAA for £10.1 billion in 2006.

Gainers & Losers

BHP Billiton plc fell 1.5% to 1,797.00 pence after it released quarterly production report that indicated higher iron production in Western Australia and energy exploration in the Gulf of Mexico. The uranium production will suffer for the rest of the year after the Olympic Dam in Australia is still struggling with production difficulties.

Brulines Group Plc decreased 0.7% to 119.14 pence after the beer flow monitoring system manufacturer said that for the fiscal first half of 2010, it expects results to be in line with management expectations.

Cadbury plc rose 0.06% to 799.00 pence after the confectionery company said third quarter revenue increased 7% in constant currency and operating margins increased 1.8% in the first nine months. The company also recorded nine months revenue growth of 5%, ahead of previous guidance for the year.

Drax Group plc added 1.8% to 464.70 pence after the power station operator said a strong forward contract position was helping to offset challenging trading conditions in commodity markets.

Home Retail Group plc fell 0.8% to 305.10 pence said first half net profit was £77.7 million compared to net loss of £446.8 million a year ago.

Playtech Limited added 2.1% to 349.50 pence after the online gaming technology developer reported third profit increased but lower than in the second quarter.

Rotala plc fell 1.0% to 47.00 pence after the acquisitive transport group Wednesday said it hopes to raise around £2.15 million through a share placing as it looks to add two new depots and 15 new buses to service its new contract wins.

Tandem Group PLC decreased 4.3% to 65.49 pence after the manufacturer and distributor of sports and leisure equipment said first-half revenues rose 5.2% to £18.9 million from £18.0 million a year ago. Net profit for the first-half rose 81% to £734,000 or 2.04 pence per diluted share compared to net profit of £405,000 or 1.06 per share a year ago.

Telford Homes Plc fell 2.9% to 98.00 pence after the homebuilder said it expected to meet market estimates for the full year.

West African Diamonds plc declined 3.5% to 3.38 pence after the AIM listed diamond miner said full-year pre-tax profit rose 12% to £246,465 compared to pre-tax profit of £220,066 a year ago.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 50 increased, 50 declined and 2 were unchanged.

Smiths Group Plc decliners in the FTSE 100 index with a loss of 3.66% followed by losses in BAE Systems Plc of 3.36%, in Pearson Plc of 2.85%, in WPP Plc of 2.72%, in London Stock Exchange Group Plc of 2.35%.

Admiral Group Plc led gainers in the FTSE 100 index with a rise of 3.49% followed by increase in Wolseley Plc of 2.83%, in Icap Plc of 2.78%, in Cable & Wireless Plc of 2.72%, in Tesco Plc of 2.24%.