London midday: Resource stocks a drag

26th Aug 2009 12:09

Given that resource stocks are in the dog-house the Footsie is doing well to be only moderately in the red on a day of mixed results for blue chips.Pre-tax profits plunged at Tullow in the first half of the year as the firm felt the pinch of the slide in oil prices. The oil company posted a pre-tax profit of £34.8m in the six months to June 30, down by 83% from the £126m reported the previous year. Revenues slid 23% to £291.3m from £378m. Elsewhere in the oil Cairn Energy is still encountering selling pressure after disappointing results yesterday while oilfield services group petrofac is another out of favour after declaring results earlier this week.It was a similar story at mining firm Antofagasta which posted a sharp slide in pre-tax profits as metals prices slid. For the six months to June 30, pre-tax profits totalled $476.6m, compared with $1.66bn over the same period the previous year, as revenues slid to $1.18bn from $2.40bn. Other miners to hit the low road include Fresnillo, Xstrata and Rio Tinto.WPP falls back after saying half-year results continued to reflect the impact of the global economic contraction, which intensified in the second quarter, though results for July did indicate a 'less-worse' picture. Pre-tax profit for the six months fell 47% to £179.3m, partly due to the impact of higher sterling translation of interest costs on Euro-denominated debt. Outsourcing specialist Serco is the top riser after it said its strong performance in the first half and the good start to the second period supports its expectation in achieving its financial guidance for 2009 and beyond. Pre-tax profit for the half-year increased 32.8% to £93.4m on revenue that rose to £1,950 from £1,491m. The strong results allowed the firm to hike dividends by 25% to 1.85p per share. In the mid-cap index Punch Taverns is up for the second day in a row after Shore Capital reinitiated the pub group as a 'buy' following yesterday's trading update. Fellow pub landlord Enterprise Inns is also higher.Lovell, the affordable housing division of construction and regeneration specialist Morgan Sindall, has been chosen as a contractor for a £20m redevelopment programme in Hampshire. Meanwhile, support services and construction company Carillion has won three new contracts worth £121m. The company has been chosen by real estate investment trust Segro for a £50m project in Farnborough that will involve the construction of four office buildings in Farnborough.Oil services group John Wood saw profits slide in the half-year as the tough market conditions hit exploration and production (E&P) spending worldwide. The group said the recent higher oil prices are likely to have little impact on E&P spending in the second half.Oil and gas firm Melrose Resources saw first half revenue and profit tumble as a result of lower oil prices and the planned cessation of production from its Galata field.Sector peer Premier Oil has plugged and abandoned the Frida Marine-1 well in the Congo Marine XI permit. Ireland's largest bookmaker Paddy Power reported a decline in half year pre-tax profit but saw 20% growth in online customers.Aquarius Platinum has reported that several employees of one of its contractors have gone on strike, which could result in mass dismissals that affect production of the precious metal.In vitro diagnostics firm Axis-Shield saw profits almost double in the first half and said business remains strong. Underlying pre-tax profit rose to £3.6m in the six month ended 30 June compared with £1.6m last time. Statutory pre-tax profit increased to £7.5m from £1.6m.Shares in WorkPlace Systems surged higher after the business software supplier said trading improved significantly during the summer months.FTSE 100 - RisersSerco Group (SRP) 481.60p +5.85%Royal Bank of Scotland Group (RBS) 55.65p +3.53%Admiral Group (ADM) 1,078.00p +3.26%3i Group (III) 313.00p +2.93%FTSE 100 - FallersAntofagasta (ANTO) 752.50p -4.69%Fresnillo (FRES) 610.00p -4.24%Cairn Energy (CNE) 2,481.00p -4.06%Tullow Oil (TLW) 1,054.00p -3.83%