London pre-open: Heading south

20th Jan 2011 07:38

A disappointing session in the US yesterday and weakness in Asia this morning points to a poor start in London this morning.Futures prices currently point to an initial 20-point decline.In company news, Associated British Foods (ABF) grew revenue by 10% in the first 16 weeks of the financial year, in line with expectations, but rising commodity prices are hitting margins and the weather-hit sugar crop will trim annual profits. Revenue at constant exchange rates was up 7%. Higher prices boosted profits at the sugar business where revenue rose 7%, but the recent increase in temperatures following the pre-Christmas freeze is damaging the 25% of this year's sugar beet crop still to be processed. Higher commodity costs are forcing the firm to raise prices at all businesses.Insurance group RSA Insurance had a tough winter, with losses relating to the weather in November and December £142m more than normal. For the year as a whole the weather impact was around £255m above normal levels. Despite the effects of hurricanes, earthquakes and the big freeze, the chief executive officer Andy Haste said the group had still posted a "strong result" for 2010, with 11% growth in net written premiums, a combined operating ratio (COR) of between 96.5% and 97% and an operating profit of £600m-£640m.The extreme weather over Christmas kept drinkers at home, taking an estimated £2m off Enterprise Inns' first quarter operating profit, Britain's biggest pub owner said. Enterprise said the disappointing trading came after a solid start to the year. Net income was down by 1% during the quarter, with net income per pub down by about 2%. Power systems developer Rolls-Royce has bagged a $250m long term maintenance support contract from Cathay Pacific airline. Rolls-Royce will provide its TotalCare long-term services support programme for Trent 700 engines that power eight new Airbus A330 aircraft. An enhanced engine refurbishment programme for RB211-524 engines that power existing Boeing 747-400 aircraft will also be delivered up to 2013.