London open: Poor start for blue chips

28th Sep 2010 08:47

London is heading lower led by Thomas Cook after a gloomy update, while miners and banks are also under pressure after a weak finish on Wall Street overnight.Tour operator Cook said it has now started a review of its UK cost base after softer than expected business over the summer and in view of the difficult market backdrop. "Our cost experience in the UK has not been as favourable as expected, particularly in the airline, and this will result in a net impact of around £10m on the underlying operating profit," Thomas Cook said. It will take a £10m restructuring charge.Hedge fund manager Man's first half profits will fall by a fifth to $215m as performance fees dwindled after a tough half for its flagship AHL fund. Funds under management have stabilised recently and the end of September were up over the previous three months to $39.5bn from $38.5bn.With just days to go until its year-end, newspaper publisher Daily Mail and General Trust expects the full-year result to be at least in line with the City consensus. Underlying revenue rose 2% during the 11 months to the end of August, but fell 7% on a reported basis, although trading remains "robust" and the business to business (B2B) and consumer media businesses report underlying growth.Irn-Bru maker AG Barr achieved sales growth well in advance of the market in the first half of its financial year. Total turnover in the six months to 31 July rose 13.9% to £119.2m from £103.7m in the corresponding period of 2009. Underlying profit before tax increased by 18.8% to £16.0m from £13.5m the year before.The picking over of the bones of collapsed Connaught Group continues with British Gas owner Centrica acquiring the assets of Connaught Compliance, Connaught's gas and electricity services business. Centrica is paying £11.2m for the business which will add around 400 service engineers and more than 20,000 commercial customers to British Gas's operations.Specialist mortgage provider Paragon expects full-year profit to be at the top end of analysts' forecasts and is going to restart buy-to-let lending immediately after securing a new loan facility. A "strong" performance in the first 11 months means operating profit before exceptional and fair value items for the year to September 30 should be towards the upper end of the £40.5m-£65m range.Close Brothers has had a "good" result for the full-year, driven by strength at the banking business, and the merchant bank expects a "satisfactory" outcome for 2011.Computer game retailer Game slumped into the red as the boost from the launch of Nintendo's Wii faded away. Losses in the half year to July came in at £21.5m, compared to a profit of £10.8m. Revenues fell to £625m from £691m, with like-for-like sales over the period down by 10.9%.