London open: Bright start for blue chips

8th Jan 2010 08:46

London's blue chips are on the rise again, with banks going well and restaurant and pubs groups boosted by Mitchells and Butlers and the Restaurant Group.Pub group Mitchells said trading in the new financial year has remained strong, thanks to sales growth across the main brands, but cautioned that it is still cautious on the outlook for consumer spending. Punch and Greene King are up in sympathy.Sentiment among leisure stocks has been further helped by The Restaurant Group, the company behind the Frankie & Bennie's and Chiquito chains, saying it expects full-year profits to be well ahead of the top end of the range of current market forecasts. Royal Bank of Scotland (RBS) has agreed to sell certain fund management assets and contracts of RBS Asset Management to Aberdeen Asset Management for £84.7m. Aberdeen meanwhile had a 'successful' last three months of 2009, with gross new business wins more than 3½ times the figure for the fourth quarter of 2008. Wins for the period of £9.6bn compared with £2.6bn a year earlier, but there was net funds outflow of £2.6bn said to be mainly low margin business.Recovery continued in all areas except the UK in the fourth quarter for recruiter Michael Page. Page says the UK is likely to remain a difficult market. Operating profit for the year 2009 will come in at £20m after a full year gross profit of £351.7m, down 36.4% on 2008. Sales surged at designer fashion group Ted Baker in the run-up to Christmas, with the UK in particular performing above expectations. Margins also rose on better stock control. Total sales jumped by 19.1% between 1 November and 24 December compared with last year. Spirax-Sarco, the steam valve and pump maker, expects pre-tax profits for 2009 to be above the top of the current range of analysts' forecasts. Sales for the year increased 3% from 2008, including a small contribution from acquisitions and an exchange benefit of 10%. In the US, attention will be on the non-farm payrolls data for December. Figures from payrolls processing firm ADP on Wednesday showed private-sector employment fell by 84,000 in December, the smallest decline in jobs since March 2008, but bigger than expected.