London midday: Footsie back to square one

4th Jan 2012 10:38

UK equities are seeking direction after a morning in which the Footsie moved in a narrow band ranging from 5689 to 5720.Fashion chain Next is a drag on the index, after a cautious trading statement. The company said "despite a good final week before Christmas, November and December sales were disappointing". The firm's Retail unit saw sales (excluding VAT) fall 2.7% in the period from August 1st to December 24th versus the corresponding period the year before, while Directory sales improved by 16.9%. Sales for the Next brand overall rose 3.1%, in line with - but in the bottom half of - the full year guidance range given in November of between 2.5% and 4.0%. Sector peer Marks & Spencer dips in sympathy with Next, while other retailers are under the cosh, including DIY specialists Kingfisher and Home Retail, newsagent WH Smith, car parts & bike seller Halfords plus the big quoted supermarket chains, Tesco, Sainsbury and Morrisons.Hard times on the High Street could have a knock-on effect on advertising revenues, which is one of the reasons why broadcasters British Sky Broadcasting and ITV are off the pace.Smith & Nephew, the medical technology business, is wanted after it announced plans to transfer the bulk of its US biologics team and Clinical Therapies business to a newly formed joint venture (JV), called Bioventus. The deal will dilute earnings slightly, but the company will receive a 49% stake in the JV, as well as $98m in cash and will receive a $160m 5-year note from Bioventus. The majority owner of Bioventus is Essex Woodlands, a specialist healthcare growth equity and venture capital firm. Pizza delivery firm Domino's Pizza saw a slow-down in year-on-year like-for-like sales (LFL) growth in the final quarter of 2012, but this was expected, with the company facing tough comparatives, and the company's new Chief Executive Officer, Lance Batchelor, said the company will meet profit expectations for 2011. In the 13 weeks to December 25th, LFL sales rose by 3.6%, down from the preceding quarter's 3.9% growth. Panmure Gordon had predicted LFL sales growth of 3.3%. System sales for the period increased by 9.5% to £145.0m from £132.5m in the corresponding period of last year.Results from Next and Domino's both show an increasing propensity for online shopping, which is having a halo effect on grocery delivery firm Ocado.The revolving door to the board room at troubled package tour firm Thomas Cook is set to get more use again. Three of the firm's non-executive directors are set to leave in February. The announcement comes less than a month after Frank Meysman took over as Chairman of the company, and it looks like he is beginning to mark out his territory.Kefi Minerals, an AIM-listed gold and copper exploration company, has been awarded two mineral exploration licences in Saudi Arabia. The licences, which are for a period of five years, are located in the Central Arabian Gold Region, and have been awarded to a joint venture company in which Kefi Minerals has a 40% interest. Kefi is the operating partner in the joint venture.Licence awards are also behind the buying interest in oil and gas explorer Serica. The AIM-listed tiddler has been offered two production licences in the UK government's offshore licensing programme. Not much is happening in the equity market, and things are almost as somnolent in the gilts arena. The benchmark 10-year gilt eases a little, pushing the yield up to 1.96% from 1.95% overnight.On the futures market, the price of oil has come off the top after a strong rise yesterday. The most actively traded contract for Brent crude dipped 67 cents in the morning session to $111.46 a barrel.FTSE 100 - RisersSevern Trent (SVT) 1,539.00p +1.25%Weir Group (WEIR) 2,111.00p +1.25%Serco Group (SRP) 489.00p +1.20%BP (BP.) 476.35p +1.13%United Utilities Group (UU.) 618.00p +1.06%Reckitt Benckiser Group (RB.) 3,313.00p +1.04%G4S (GFS) 272.80p +0.85%Vodafone Group (VOD) 181.95p +0.66%Resolution Ltd. (RSL) 261.10p +0.66%RSA Insurance Group (RSA) 108.50p +0.65%FTSE 100 - FallersNext (NXT) 2,645.00p -3.50%British Sky Broadcasting Group (BSY) 724.00p -2.43%Shire Plc (SHP) 2,177.00p -2.16%Antofagasta (ANTO) 1,277.00p -2.15%Kazakhmys (KAZ) 1,000.00p -1.48%Morrison (Wm) Supermarkets (MRW) 323.50p -1.37%Sainsbury (J) (SBRY) 306.20p -1.32%Vedanta Resources (VED) 1,052.00p -1.31%Burberry Group (BRBY) 1,227.00p -1.29%Tesco (TSCO) 406.25p -1.22%FTSE 250 - RisersDomino's Pizza UK & IRL (DOM) 442.70p +6.98%Carpetright (CPR) 508.50p +3.37%Shanks Group (SKS) 98.70p +3.35%Premier Oil (PMO) 376.70p +3.09%Talvivaara Mining Company (TALV) 262.50p +2.82%Micro Focus International (MCRO) 397.20p +2.72%Betfair Group (BET) 815.00p +2.45%Ocado Group (OCDO) 61.50p +2.24%Exillon Energy (EXI) 275.30p +2.15%BH Global Ltd. USD Shares (BHGU) 11.77 +1.99%FTSE 250 - FallersNew World Resources A Shares (NWR) 463.90p -4.88%Kesa Electricals (KESA) 68.15p -4.82%Galliford Try (GFRD) 461.70p -4.65%PZ Cussons (PZC) 343.20p -4.51%WH Smith (SMWH) 514.50p -4.37%Home Retail Group (HOME) 90.40p -4.03%Centamin (DI) (CEY) 83.55p -3.19%Jupiter Fund Management (JUP) 213.70p -2.86%Murray International Trust (MYI) 928.50p -2.52%Ashtead Group (AHT) 224.60p -2.43%--jh