UK: BT Drops, Anglo American, Rio Tinto Rise

Mayank Mehta
11 Feb, 2010
New York City

UK stocks pared losses after EU leaders failed to provide any details for the Greece bailout. Rio Tinto reinstated its dividend. BT Group dropped on the pension fund worries. Anglo American supports De Beers

[R]4:00 PM London, 11:00 AM New York – UK stocks pared losses after EU leaders failed to provide any details for the Greece bailout. Rio Tinto reinstated its dividend. BT Group dropped on the pension fund worries. Anglo American supports De Beers’ $1 billion rights issue.[/R]

UK stocks pared most of the gains after the EU leaders pledged to support Greece but offered no specifics. Earnings were in focus.

In London FTSE 100 Index closed higher 29.49 or 0.57% to 5,161.48 and the pound edged lower to close at $1.561 and to €1.136.

Rio Tinto gained after it reinstated its dividend on stronger sales in the second half and 33% increase in sales for the full-year.

Gainers & Losers

Anglo American plc gained 3.3% to 2,407.50 pence after the parent of De Beers said it will participate in $450 million rights offering of the diamond cartel. Anglo American controls 45% of the South Africa based diamond miner and market maker.

BT Group dropped 8% to 120.95 pence after the telecom operator said that pension regulators have expressed concerns about the health of the pension plan and the company’s plan to rebuild the reserves.

Daejan Holdings PLC rose 1.1% to 2,560.00 after the property group interim management statement for the period ending December 2009 said the performance has continued to be in line with expectations.

Diageo plc fell 2.8% to 995.50 pence after the alcohol and liquor and spirits seller reported international sales advanced 13% to £1.40 billion from £1.24 billion last year led by strong performance of beer brands in Africa and scotch in Latin America and global travel and Middle East. Volume increased 2% in International.

Halma Plc increased 6.1% to 241.70 pence after the health and sensor technology group estimated profit for the full year to be higher than the top of the range of market expectations. The Board believes the current range of market expectations is £78.9 million to £82.1million compared to previous year profit before amortization of £79.1million.

Mouchel Group plc rose 1.3% to 250.00 pence after the consulting and business services firm said it continues to trade in line with the board's expectations for the year ending July 31. The Group's order book stood at £2 billion at the half year compared with £1.9 billion at July 31 2009.

Resolution Limited the life assurance manager rose 0.8% to 74.65 pence.

Rio Tinto plc gained 4.3% to 3,275.50 pence after the miner announces underlying earnings of $6.3 billion on stronger sales in the second half.

Rolls-Royce Group plc advanced 3.4% to 505.50 pence after the engine maker said the order book was £58.3 billion, underlying revenues of £10.1 billion and profit before tax of £915 million. The average net cash balances improved by £260 million to £635 million.

Smith & Nephew plc added 4.4% to 661.00 pence after the medical device company reported fourth quarter revenues rose 11% to $1.07 billion from $960 million a year ago. Net profit for the quarter rose 9.4% to $128 million compared to net profit of $117 million a year ago.

Sports Direct International plc rose 7.7% to 104.50 pence after the sportswear retailer raised its fiscal 2010 guidance and expects underlying operating earnings of at least £160 million.

Thomas Cook Group plc rose 1.2% to 235.10 pence after the travel group expect the winter season trading to trend towards reduced capacity levels but left its full year expectations unrevised.

Earnings Review

Diageo plc, the global drinks giant said first-half revenues rose 2% to £5.2 billion from £5.1 billion a year ago. Net profit for the first-half fell 10% to £1.02 billion compared to net profit of £1.13 billion a year ago.

Diageo plc, in the last one year traded as high as 1,098.00 pence in December 2009 and as low as 727.00 pence in March 2009. Based on the yesterday’s closing price of 996.00 pence the company has market cap of £24.94 billion.

Rolls-Royce Group plc, an aerospace and engineering company said full-year revenues rose 15% to £10.4 billion from £9.08 billion a year ago. Net profit for the full-year was £2.22 billion or 119.09 pence per diluted share compared to net loss of £1.34 billion or 73.63 pence per share a year ago.

Smith & Nephew plc, the medical device company said fourth quarter revenues rose 11% to $1.07 billion from $960 million a year ago. Net profit for the quarter rose 9.4% to $128 million compared to net profit of $117 million a year ago.

Smith & Nephew plc, in the last one year traded as high as 666.50 pence in January 2010 and as low as 412.00 pence in April 2009. Based on the yesterday’s closing price of 661.00 pence the company has market cap of £5.84 billion.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 60 increased, 42 declined and none were unchanged.

BT Group Plc decliners in the FTSE 100 index with a loss of 8.68% followed by losses in Lloyds Banking Group Plc of 3.72%, in British Airways Plc of 3.36%, in Barclays Plc of 2.90%, and in ICAP Plc of 2.85%.

Rolls-Royce Group Plc led gainers in the FTSE 100 index with a rise of 6.08% followed by increase in Smith & Nephew Plc of 4.27%, in Antofagasta Plc of 3.13%, in Cairn Energy Plc of 2.68%, and in BG Group Plc of 2.51%.