London pre-open: Markets set for a flat start

23rd Feb 2012 07:32

City sources predict the FTSE 100 will open flat following yesterday's close of 5,917, with investor focus likely to be on RBS results and somewhat dampened by a fall seen across the major US indices last night. Provisions for mis-selling of payment protection insurance schemes and Greek debt ensured part-nationalised lender Royal Bank of Scotland made a pre-tax loss in 2011, though the core business was profitable at the operating level. "RBS Core profits - the ongoing bank - were £6bn, comparing well with others and representing a return on equity of 10.5%. The reduction in our balance sheet since 2008 now exceeds £700bn with all other 'safety' measures improving strongly," said Group Chief Executive Stephen Hester.Gas and electricity provider Centrica said it put in a resilient performance in challenging conditions in 2011. Revenue edged up to £22.8bn from £22.4bn in 2010, ahead of market expectations of £21.9bn. The British Gas owner, which has been buying up its own energy producing assets of late to ensure a source of supply, saw underlying profit before tax of £2.06bn, versus expectations of £2.17bn. Exceptional items, however, put a £794m dent in those profits, reducing them to £1.27bn, down from 2010's £2.81bn; the 2010 figures benefited from exceptional credits of £880m. House builder Redrow saw a strong rise in profits in the first half and seems cautiously optimistic about the housing market during the rest of the year. Pre-tax profit jumped 80% from £8.5m to £15.3m, ahead of expectations of £14m (Panmure Gordon), helped by increased average selling prices, improved margins and lower financial expenses and net financing costs. Gross margins improved from 13.4% to 15.4%.