Date: Tuesday 23 Mar 2010
London’s leading shares consolidated gains over the lunch-time trading session after notching up solid gains in the morning.
Cairn Energy remains the stand-out performer among blue-chips by some distance. The oil group raised its forecast for peak production from its Indian assets by over a third to 240,000 barrels per day, plus it also boosted its total reserve estimate for India.
Legal & General is wanted after it raised its final dividend by 33% and gave heavy hints more increases could be on the way. It comes after big cuts in the last two payouts. The company’s operating profit on an international financial reporting standards basis in 2009 jumped to £1,109m from a restated £592m in 2008.
Carnival reported lower first-quarter earnings but shares in the cruise operator rose after the group upped its full-year outlook thanks to improved booking trends.
Tobacco group Imperial Tobacco said trading for the financial year to 30 September 2010 has so far been in line with management’s expectations. Its global strategic cigarette brands have performed strongly, the company said, with both Davidoff and West growing volumes.
The UK government has handed a £4bn armoured vehicle contract to US defence giant General Dynamics (GD), putting hundreds of jobs at BAE Systems in jeopardy. BAE warned last week that its tank factory in Newcastle may have to close if the British army decided not to hand it the deal to build new light tanks.
BAE came under further bombardment today when Bernstein Research cuts its stance on the shares to "market perform" from "outperform" on valuation grounds.
BT will have to share its telegraph poles and underground cable ducts with its rivals under new proposals put forward by regulator Ofcom to boost the introduction of a super-fast broadband network. The regulator also wants BT to open its fibre lines so rivals firms can provide their own services to consumers. BT would be able to make a fair rate of return, the proposal said. BT said it was happy enough with the proposals.
British Airways is higher despite the threat of more strikes at the weekend. The company said yesterday that it is losing an estimated £7m a day in revenue as a result of the current strike but added that ‘full year earnings expectations to March 31, 2010 remain broadly unchanged.’
Sticking with former nationalised industries, oil and gas firm BG Group has agreed to sell its US power plants to private equity firm Energy Capital Partners for $450m.
Elsewhere in the sector Anglo-Dutch oil giant Shell has signed a 30-year deal to explore for natural gas in China. In a partnership with the China National Petroleum Corporation (CNPC), it will appraise and potentially develop gas reservoirs in a 4,000-square-kilometre area in Sichuan Province.
Lacklustre mortgage lending figures for February has soured investors’ views on DIY retailers Home Retail Group and Kingfisher.
Support services group Babcock is to take over rival VT Group after the two companies reached agreement on a tie-up after weeks of wrangling. The transaction will be worth about 735p for every VT share based on Babcock’s latest closing price, comprising 361.6p in cash and 0.701 new Babcock shares, and values VT at about £1.33bn. Shares in both stocks are higher, with Babcock finding itself the subject of bid rumours; US aerospace giants Lockheed Martin and Boeing have been cited as possible suitors for Babcock.
Iron ore producer Ferrexpo saw earnings slump in 2009 as demand for iron ore remained poor until the final quarter of the year. On the bright side, the outlook for 2010 is much more positive, chief executive Kostyantin Zhevago claimed, with increased visibility and strengthening iron ore prices.
Since the end of its financial year at the end of September Aberdeen Asset Management has seen assets under management increase by a shade over one-tenth. Assets under management (AUM) at the end of February totalled £161.4bn, versus £146.2bn at the end of September 2009.
Carpet and floor coverings retailer Carpetright said the rate of recovery seen towards the end of 2009 has not been sustained and group profits for the year to 1 May 2010 are likely to fall below current market expectations.
Car parts and bike retailer Halfords said it expects earnings for the year to be ahead of expectations after seeing a rise in sales in the 11 weeks to 19 March. Sales increased by 1.3% compared with the same period the previous year and rose by 0.8% on a like-for-like basis, stripping out the impact of new stores.
After a tough first nine months of 2009 trading stabilised in the fourth quarter at online gaming company 888 Holdings and has shown signs of improvement in 2010. Profit before tax, excluding share benefit charges of $7m ($8m the year before) fell to $34.6m in 2009 from $48.6m the year before.
Profits held up well at Severfield-Rowen in the year to December 31 despite a sharp fall in revenues, but the structural steel supplier said the strong margin performance would not be sustainable in 2010.
Serviced office group Regus continues to push higher after its upbeat statement yesterday and bullish comments from brokers today.
Irish TV and radio broadcaster UTV Media said full year profit fell but it had seen some improvements in the advertising market so far this year.
Gulfsands Petroleum has confirmed that bid approach it rejected last week was pitched at price of 315p per share, which would value the whole company at about £381m.
Shares in Healthcare Locums fell out of bed after the company reported pre-tax profit below market expectations following a review of it accounting policies on revenue.
Schools IT equipment supplier RM said the first half of the year will see year-on-year revenue growth and a further increase in committed future revenues.
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