London pre-open: Footsie to edge higher

4th Jun 2009 07:50

London's leading share index is tipped to rise slightly in early dealings on a busy day for the retail sectorDepartment store Debenhams is to raise £323m through a placing and open offer to reduce its debt burden and improve its ability to acquire retail assets that may arise if the economic downturn persists. It said its high debt levels had damaged investor sentiment towards the company, which has impacted its share price. Debenhams added that the economic downturn has thrown up distressed retail assets that may be available for purchase.Supermarket chain Wm. Morrison has made a good start to the new trading year, with sales growth well ahead of the sector norm. In the 13 weeks to 3 May, total sales excluding fuel, rose by 9.2% from a year earlier. With fuel included sales rose 5.7%. Like for like (LFL) sales improved by 8.2%, or by 5.0% including fuel, maintaining the rate of LFL growth seen in the year to 1 February 2009.Newsagent WH Smith said like-for-like sales in the first 13 weeks of the second half are down 4% on the same period last year, with total sales up 1%. The group said its financial position is in line with market expectations and its balance sheet remains strong as it continues to generate high levels of cash from its operations. "The economic environment remains uncertain and, whilst we continue to be cautious about consumer spending, we are confident in the outcome for the full year," it added.Consumer electronics retailer DSG International received a health response to its recent rights issue. Acceptances were received in respect of 97.1% of the shares on offer. The shares were offered at 14p each, a deep discount to the prevailing share price at the time, which was in the high thirties.Car catalyst provider Johnson Matthey saw profits for the year fall 5% and warned interim operating profit in the new year will be lower as the downturn in the car industry hits demand for autocatalysts. Pre-tax profit for the 12-months fell to £249.4m from £262.3 last year on revenue that rose 5% to £7,848m. The group said in the first half of 2009/10 demand for autocatalysts is expected to be down on the same period in 2008/09.Healthcare support services provider Synergy Health said it is on track to fully restore margins during autumn of this year. The company saw a 1.6% decline in operating margins in the year to 29 March 2009, caused mainly by rapid escalation of energy and commodity costs together with one off start-up costs incurred on new contracts in the Decontamination Services business. Management is now largely on top of both of these issues, chairman Stephen Wilson said.Outsource giant Capita said it is in early discussions to the partial disposal of IBS OPENSystems after the Competition Commission deemed part of the business will lessen competition. The Competition Commission confirmed the acquisition by Capita of IBS last June is expected to lessen competition in the market for revenues and benefits software systems, used by local authorities to collect council tax and distribute benefits.