London open: Footsie struggles early on

4th Mar 2010 08:30

A four-day winning streak could end Thursday after a poor start following last night's late sell-off on Wall Street, weaker miners and some disappointing company results.Engineering and project management firm Amec is worst of the blue chips as investors react badly to a 3% slip in revenues, or 12% on an underlying basis, last year amid tough economic conditions, Aviva has taken a tumble despite beating profit expectations in 2009. Operating profit on an IFRS basis fell to £2.02bn in the year ended 31 December 2009 from £2.30bn in 2008, but rose 3% to £3.48bn on a market consistent embedded value (MCEV) basis. Panmure Gordon predicted a 17% drop in IFRS profit to £1.91bn and a 7% decline in MCEV operating profit to £3.11bn, in the middle of the £2.94bn-£3.29bn range of forecasts.A mixed statement from Cobham also brought out the sellers. Underlying profit before tax increased 21% to £295m in 2009, towards the top end of the range of analysts' forecasts. But its Mission Systems and commercial markets businesses are finding it tough and earnings, and earnings are expected to be more than usually weighted to the second half.Miners have been hit by a drop in commodity prices. Xstrata, Fresnillo, Antofagasta and BHP Billiton all feature in the list of FTSE 100's ten biggest fallers.They're joined by Kazakhstan based Kazakhmys despite finishing 2009 in stronger shape. Copper production of 320,000 tonnes beat expectations. Reaction to numbers from leisure group Whitbread was more positive as it posted continuing double-digit sales growth at its coffee shop chain Costa and a move into like-for-like (LFL) sales growth at its hotel chain Premier Inn. Gains across the real estate sector are also helping limit the market decline, with Liberty International, British Land, Segro, Hammerson and Land Securities all in favour.Schroders is top of the pile though as the fund manager said it had got off to a good start in 2010 following record net inflows and funds under management last year.Elsewhere, Petrofac is proposing to hive off its UK Continental Shelf assets into a new company to be formed with Swedish oil and company Lundin Petroleum. The new company, called EnQuest, will be 45% owned by Petrofac shareholders and will be listed on the London stock exchange as well as on the NASDAQ OMS bourse in Stockholm.Newspaper publisher Trinity Mirror saw a sharp fall in profits in 2009 as advertising sales slumped and circulation revenues were squeezed, but said it had seen an improvement in advertising towards the end of the year. Pre-tax profits in the 53 weeks to January 3 fell to £72.7m from £124.2m over the preceding 52 week period on revenues that were down to £763.3m from £871.7m.Car rental firm Avis Europe reported a rise in annual pre-tax profit while revenue shrank 16% as customers continue to cut back on travelling. Pre-tax profit of €4.5m for the year ended 31 December against a profit of €3m the year before after 'rigorous cost cuts'. Revenue fell to €1.4bn from €1.7bn.