UK Retail Sales Fall; Pound 9-month Low

Mayank Mehta
19 Feb, 2010
New York City

UK stocks recovered and closed higher but the pound traded at nine-month low. Retail sales in January declined 1.8%. Millennium & Copthorne Hotels plc declares second interim dividend. Rentokil Initial plc fiscal 2009 profit up. BlueBay Asset Management plc profit rises.

[R]4:00 PM London, 11:00 AM New York – UK stocks recovered and closed higher but the pound traded at nine-month low. Retail sales in January declined 1.8%. Millennium & Copthorne Hotels plc declares second interim dividend. Rentokil Initial plc fiscal 2009 profit up. BlueBay Asset Management plc profit rises.[/R]

UK retail sales declined more than expected on severe weather and elevated unemployment.

In London FTSE 100 Index closed higher 33.08 or 0.62% to 5,358.17 and the pound edged lower to close at $1.541 and to €1.141.

The pound continued to trade lower and the 2-year government bond yields edged up to 1.19%. The pound traded at nine-month low against the dollar.

UK volume of retail sales in January rose 0.9% from a year ago month but retail sales declined 1.8% in the month from December. Sales excluding gasoline declined 1.2%.

Household goods stores sales decreased 13.4%, the largest decline since the fall of 18.9% in January 1988. Predominantly food stores sales decreased 2.4% and non-food stores showed no increased.

The largest volume increase was non-specialized stores at 8.0%. Total sales volume from November 2009 to January 2010 increased 2.2%.

Sales volume in the three months to January decreased 0.5% compared to previous three months and increased 2.2% from a year ago period.

Gainers & Losers

Anglo American plc fell 1.9% to 2,452.50 pence after the platinum and diamond producers said full year revenues fell 25.3% to $24.64 billion from $33 billion a year ago. Net profit for the year fell 53.5% to $2.43 billion or $2.02 per diluted share compared to net profit of $5.22 billion or $4.34 per share a year ago.

BlackRock World Mining Trust Plc fell 0.6% to 533.00 pence after the company net asset value for the year to December rose by 99.8% on a capital only basis.

BlueBay Asset Management plc slipped 4.7% to 330.00 pence an independent asset management group focused on fixed income investing said first-half revenues rose 41% to £76.7 million from £54.3 million a year ago. Net profit for the first-half rose 328% to £19.7 million or 9.9 pence per diluted share compared to net profit of £4.6 million or 2.3 pence per share a year ago.

Charter International plc fell 6.6% to 694.00 pence an engineering firm said full year revenues fell 12% to £1.66 billion from £1.89 billion a year ago. Net profit for the year fell 58% to £63.5 million compared to net profit of £150.2 million a year ago.

GlaxoSmithKline plc dropped 0.7% to 1,233.50 pence after the global healthcare group is reviewing label changes proposed today by the US Food and Drug Administration for asthma medications containing long-acting beta-agonists, such as the company product Advair.

Millennium & Copthorne Hotels PLC surged 11.5% to 420.00 pence after hotel chain operator declared a second interim dividend of £0.0417 per share bringing the total dividend for the year to £0.0625 per share compared to £0.0625 in 2008.

Rentokil Initial plc added 7.0% to 126.30 pence after the pest-control company said full-year revenues rose 5% to £2.53 billion from £2.41 billion a year ago. Net profit for the full-year rose 153% to £47.6 million or 2.63 pence per diluted share compared to net profit of £18.8 million or 1.04 pence per share a year ago.

Shire Plc increased 4.6% to 1,370 pence after it reported 23% increase in fourth quarter profit.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 73 increased, 29 declined and none were unchanged.

Anglo American Plc decliners in the FTSE 100 index with a loss of 1.78% followed by losses in Wolseley Plc of 1.77%, in Fresnillo Plc of 1.46%, in Randgold Resources Ltd. of 1.39%, and in The British Land Company Plc of 1.14%.

Shire Plc led gainers in the FTSE 100 index with a rise of 4.58% followed by increase in Unilever Plc of 2.69%, in British American Tobacco Plc of 2.53%, in BT Group Plc of 2.42%, and in The Royal Bank of Scotland Group Plc of 2.34%.