UK Inflation Rises; Cadbury, Burberry Up

Mayank Mehta
19 Jan, 2010
New York City

UK stocks closed higher after Cadbury Plc accepted improved offer from Kraft. Cadbury board dropped its resistance to the hostile offer from Kraft as it could not find competing bidders. Consumer prices in December rose 2.9%. Burberry Group surged on higher than expected sales.

[R]4:00 PM London, 11:00 AM New York – UK stocks closed higher after Cadbury Plc accepted improved offer from Kraft. Cadbury board dropped its resistance to the hostile offer from Kraft as it could not find competing bidders. Consumer prices in December rose 2.9%. Burberry Group surged on higher than expected sales.[/R]

UK annual inflation measured at consumer price level was 2.9% in December, increased from 1.9% in November.

Seasonally adjusted construction activities decreased 1.1% both in euro area (EA16) and fell 0.6% in EU27 in November 2009, compared with the previous month. In October, production fell by 0.4% and 0.3% respectively.

In London FTSE 100 Index closed higher 22.39 or 0.41% to 5,516.78 and the pound edged higher to close at $1.636 and to €1.145.

Gainers & Losers

Alterian plc plunged 18.5% to 155 pence after the software provider said third quarter revenues rose 21% and 17% at constant currencies. Year to date revenues were 29%, ahead of last year or 24% at constant currencies.

Burberry Group plc increased 4.2% to 625.00 pence after the luxury goods group said third quarter sales rose 15% to £380 million from £329 million a year ago. Retail sales rose 17% to £249 million from £213 million a year ago. Wholesale revenues rose 10.5% to £105 million from £95 million a year ago. Licensing revenues rose 24% to £26 million from £21 million a year ago.

Cadbury plc increased 3.6% to 837.00 pence after the British chocolate maker of nearly 200 years of existence agreed to an improved offer of £11.9 billion from Kraft Foods, Inc.

Shareholders will receive for each Cadbury share, 500 pence in cash and 0.1874 new Kraft Foods shares.

The Carphone Warehouse Group PLC rose 0.1% to 197.30 pence an independent retailer of mobile phones and services said third quarter TalkTalk group revenues rose 29% to £446 million from £347 million a year ago.

Chemring Group plc rose 1.6% to 2,923.00 pence after the producer of expendable decoy countermeasures said full-year revenues rose 42% to £503.9 million from £354.2 million a year ago. Net profit for the full-year rose 70% to £70.1 million or 197 pence per diluted share compared to net profit of £41.2 million or 123 pence per share a year ago.

Games Workshop Group PLC closed unchanged at 321.50 pence after the gaming model specialist said first-half revenues rose 2% to £62.5 million from £61.2 million a year ago. Net profit for the first-half rose 347% to £6.7 million or 21.4 pence per diluted share compared to net profit of £1.5 million or 4.7 pence per share a year ago.

IG Group Holdings plc fell 2.3% to 363.40 pence after the financial derivatives trading and sports betting provider said first-half revenues rose 14% to £143.8 million from £126.5 million a year ago. Net profit for the first-half rose 32.6% to £50.0 million or 13.84 pence per diluted share compared to net profit of £37.7 million or 11.11 pence per share a year ago.

Land Securities Group plc dropped 1.3% to 683.50 pence and the real estate developer finalized the plans on three London development projects in 2010 with a total development cost, including land and finance of around £655 million.

Pearson plc slipped 2.2% to 888.50 pence after the text book and newspaper publisher said interest cost in 2009 will be higher than in 2008 and effective tax rate will be around the low end of the previous guidance of 26% to 28%.

SABMiller plc slipped 2.9% to 1,767.00 pence after the global brewer today issues its interim management statement for the group''s third quarter on an organic basis lager volumes for the third quarter were level with the prior year, and 1% below last year for the first nine months of the financial year. Soft drinks volumes grew 2% in the quarter on an organic basis.

Severn Trent Plc the second largest water utility rose 2.4% to 1,116.00 pence after is suggested that the company is prepared to agree with the tariff and capital spending demand by the regulatory authority.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 58 increased, 43 declined and 1 were unchanged.

Lloyds Banking Group Plc decliners in the FTSE 100 index with a loss of 2.53% followed by losses in SABmiller Plc of 2.20%, in Wolseley Plc of 1.95%, in Pearson Plc of 1.82%, and in Barclays Plc of 1.61%.

Burberry Group Plc led gainers in the FTSE 100 index with a rise of 7.92% followed by increase in Cadbury Plc of 3.53%, in Rexam Plc of 3.48%, in Severn Trent Plc of 3.12%, and in British Airways Plc of 2.98%.