London midday: Morning ends on a high

22nd Jul 2010 12:11

Better than expected UK retail sales gave equities a mid-morning boost and the FTSE 100 index finished the morning session close to its highest point of the day so far.Britons building up supplies for last month's World Cup, the good weather and further discounting had retail sales up smartly in June. Retail sales volumes rose a bigger than expected 0.7% between May and June, according to the Office for National Statistics (ONS), while May's gain was revised up to 0.8% from 0.6%.Outsourcing giant Capita is leading the advance. The company said pressures on public spending may affect growth in the short term but it is confident its ability to deliver cost efficiencies will stand it in good stead. "There is buoyant demand for outsourcing across both the private and public sectors, with the most active markets in our strong bid pipeline remaining local government and life and pensions," said Paul Pindar, chief executive of Capita.In contrast Autonomy, a heavy hitter in the corporate software world, is hammered despite delivering record first half profits and revenues. Fully diluted adjusted earnings per share rose 7% to 28 cents, below the expectations of many brokers such as KBC Peel Hunt (29 cents) and Panmure Gordon (30 cents). Gross margins were also a concern; adjusted gross margins for the second quarter dipped to 86%, compared to 88% for the second quarter of 2009. Imperial Tobacco was left puffing behind its fellow blue-chips too, as it revealed cigarette volumes for the nine months to June were down 4.3% as a result of market declines in Spain, USA, Russia and Ukraine being only partly offset by gains in Central Europe. Overall, the group's financial performance for the financial year to 30 September remains in line with expectations.DIY retailer Kingfisher, which owns the B&Q chain in the UK, also dropped after it reported a small drop in like-for-like sales in the 10 weeks to 10 July, but said half year profits remain on track. Like-for-like sales were down 0.8%, with total sales up 0.3% in constant currencies.Sales growth slowed at pub group Mitchells and Butlers during the football World Cup as viewers opted to watch the matches at home or in more drink-oriented pubs. The All Bar One and O' Neills owner saw like-for-like sales rise by 1.2% from the same period a year ago in the nine weeks to 17 July, down from growth of 1.6% over the 42 weeks to 17 July, blaming the football for slower food sales growth. South African platinum miner Lonmin saw output from its underground mining operations increase quarter on quarter in the April to June period.Sports Direct, owner of Sports World stores and Slazenger and Dunlop brands, posted a 50% rise in annual pre-tax profit, in line with expectations, and predicted more growth in 2010-2011.Tate & Lyle said it has made a sound start to the year and continues to anticipate progress in the current full year. However, despite some improvement in demand, industrial starch margins are expected to remain at lower levels and the group continues to see little near term improvement in US ethanol markets.Emerging markets lender International Personal Finance posted a three fold increase in first half profit and is confident it will deliver further growth in the second half.Pearson, which publishes the Financial Times and textbooks, is to acquire the school support operations of Brazilian education group Sistema Educacional Brasileiro for R$888m (£326m).Energy provider Scottish and Southern Energy (SSE) is on course to deliver expected dividend growth, despite operating in a challenging environment.The share price of SSL, owner of the Scholl and Durex brands, remains above the 1,171p level at which the offer from household goods maker Reckitt Benckiser values it, suggesting that the market is holding out hopes of a rival bidder entering the fray. Names such as Johnson & Johnson, Glaxo and Colgate Palmolive have been proffered as likely bidders. Reckitt's share price reacts negatively to the prospect of the company being drawn into a bidding war. London focused property company Great Portland Estates said growth in London's property investment markets slowed in the second quarter of 2010 after the strong gains of the previous two quarters. Estimated net asset value (NAV) per share rose 4.2% in the second quarter to 295p from 283p at the end of March.Waste management firm Shanks said trading has been line with expectations in the quarter to 30 June 2010 and is set to meet full year expectations.Business communications specialist Colt Group is seeing caution giving way to increased confidence for the second half of 2010. Earnings before interest , tax, depreciation and amortisation inched higher to £158.2m from £158.0m the year before, while profit before tax and exceptional items fell 251% to £34.4m from £45.9m.Karelian Diamond Resources share price tripled at one point in morning trading after Rio Tinto agreed to hand over confidential information and physical geological samples relating to exploration in Finland. The shares ended the morning session off the top, but still sporting a gain in excess of 100%.Stockbroker Daniel Stewart has dismissed rumours that it is looking to raise more money, prompting the shares to pull out of their recent swan dive.Faroe Petroleum gushed to a two-year high after finding more oil, this time with well 6406/3-8 T2 on the Maria prospect in the Norwegian Sea.FTSE 100 - RisersCapita Group (CPI) 748.00p +5.35%Invensys (ISYS) 290.20p +3.46%Serco Group (SRP) 555.50p +2.97%Lonmin (LMI) 1,481.00p +2.92%Lloyds Banking Group (LLOY) 62.74p +2.84%Cairn Energy (CNE) 464.90p +2.81%Standard Chartered (STAN) 1,818.00p +2.77%Cable & Wireless Worldwide (CW.) 67.50p +2.74%Kazakhmys (KAZ) 1,136.00p +2.71%Anglo American (AAL) 2,474.00p +2.70%FTSE 100 - FallersAutonomy Corporation (AU.) 1,585.00p -12.58%Imperial Tobacco Group (IMT) 1,865.00p -2.25%InterContinental Hotels Group (IHG) 1,121.00p -1.32%International Power (IPR) 357.30p -1.24%Smith & Nephew (SN.) 556.50p -0.71%Intertek Group (ITRK) 1,700.00p -0.70%African Barrick Gold (ABG) 590.50p -0.51%Essar Energy (ESSR) 449.30p -0.38%TUI Travel (TT.) 228.20p -0.35%British American Tobacco (BATS) 2,226.00p -0.34%