UK: Construction Expands; BP Falls on Earnings

Mayank Mehta
02 Feb, 2010
New York City

BP Plc declined after it reported lower than expected continuing operating income. Net investment flows picked up in 2009 and exceeded previous record of

[R]4:00PM London, 11:00 AM New York – BP Plc declined after it reported lower than expected continuing operating income. Net investment flows picked up in 2009 and exceeded previous record of £17.7 billion. ARM Holdings beat fourth quarter expectations. Rio Tinto and Anglo American rise on brokerage upgrades.[/R]

UK index of construction activity increased in January to 48.6 from 47.1 in December according to Markit Group Ltd and Chartered Institute of Purchasing and Supply. The index in January is at a two-month high.

In London FTSE 100 Index closed higher 35.90 or 0.68% to 5,283.31 and the pound edged lower to close at $1.595 and edged lower to close at €1.143.

The Investment Management Association said net fund inflows last year surged to £25.8 billion compared to £3.8 billion in 2008. Investors sent £9.87 billion to bond funds and £7.31 billion to stock funds.

Funds under management increased to £480.8 billion compared to £361.7 billion in 2008 according to the trade association.

Gainers & Losers

ARM Holdings plc added 4.0% to 197.50 pence after the chip designer said fourth quarter revenues fell 10% to £85.2 million from £94.4 million a year ago. Net profit for the quarter rose 0.6% to £17.3 million or 1.3 pence per diluted share compared to net profit of £17.2 million or 1.4 pence per share a year ago.

Babcock International Group PLC added 3.6% to 581.00 after the engineering support services provider sounded optimistic note for the current year.

BP Plc decreased 4.5% to 568.10 pence after the oil explorer and refiner said fourth quarter revenues rose 20.5% to $73.6 billion from $61.1 billion a year ago. Net profit for the quarter was $4.3 billion or 22.64 cents per diluted share compared to net loss of $3.3 billion or 17.62 cents per share a year ago.

Cable & Wireless plc advanced 2.6% to 147.10 pence after the company announced that it will publish prospectuses later today for the demerger and public listing of its two businesses and shareholders approval at a shareholder general meeting scheduled on February 25.

Dairy Crest Group plc rose 1.2% to 342.00 pence after the company profit before tax for the nine months ended December 2009 is slightly ahead of expectations, buoyed by a strong performance in the last three months.

Electra Private Equity PLC the private equity investment company rose 1.3% to 1,326.00 pence.

Imperial Tobacco Group PLC rose 0.5% to 2,012.00 pence after the cigarette manufacturer reiterated its annual outlook for the current year ending in Sept 2010.

Maxima Holdings Plc surged 17% to 86.00 pence after the software company said first-half revenues fell 7.4% to £26.2 million from £28.3 million a year ago. Net loss for the first-half was £566,000 or 2.2 pence per diluted share compared to net profit of £965,000 or 3.8 pence per share a year ago.

NWF Group plc dropped 6.6% to 92.00 pence after the dairy products company said first-half revenues fell 11.4% to £175.5 million from £198.1 million a year ago. Net profit for the first-half was £1.4 million or 3.0 pence per diluted share compared to net loss of £3.8 million or 2.8 pence per share a year ago.

Rio Tinto plc increased 3.0% to 3,281.00 pence and the miner completed the sale of Alcan packaging and other affiliated divisions to Amcor for a total consideration of $1.95 billion on February 1.

Rolls-Royce Group plc climbed 1.2% to 493.20 pence after the engine maker won a share of an order from Sichuan Airlines for V2500 engines to power 12 Airbus A320 aircraft currently on order. The order is worth $100 million to Rolls-Royce.

Shanks Group plc dropped 3.0% to 123.00 pence after the independent waste management company expects annual business to be smaller than earlier expected on the account of bad weather.

Ultra Electronics Holdings plc rose 0.3% to 1,273.00 pence and the defense industry supplier received an initial contract of £20 million from British Energy for the long-term supply and management of neutron flux detectors to a number of reactors in the fleet.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 81 increased, 19 declined and 2 were unchanged.

BP Plc decliners in the FTSE 100 index with a loss of 3.80% followed by losses in Severn Trent Plc of 1.88%, in Legal & General Group Plc of 1.71%, in United Utilities Group Plc of 1.63%, and in BAE Systems Plc of 1.31%.

Eurasian Natural Resources Corporation Plc led gainers in the FTSE 100 index with a rise of 4.60% followed by increase in AMEC Plc of 4.52%, in Cairn Energy Plc of 4.14%, in Kazakhmys Plc of 3.90%, and in The Royal Bank of Scotland Group Plc of 3.70%.