London pre-open: Stocks to creep higher

29th Sep 2009 07:39

Three-figure gains in the US overnight are set to help London add about 5 points early on, according to futures prices.A pick-up in merger and acquisition activity was behind Wall Street's advance, but much of the rally has been priced in over here already. On the companies front, contract caterer Compass reports trading has gone well in the fourth quarter with underlying earnings to be up by around 14% on a constant currency basis. Margins are expected to be up 70 basis points in the fourth quarter to September and around 60 basis points in the full year, as cost savings have offset a modest decline in revenue. Operating profit will get a boost of £120m from the movement of our key currencies compared with last year. Daily Mail remains confident it will meet market forecasts for profits this year of £180m, despite revenue in the 11 months to August dropping by 9%. The consumer side felt the brunt of the sales downturn, the newspaper group said, though the regional arm has stabilised. Business to Business revenue is up by up 2%, including the impact of the stronger dollar.Europe's largest tour operator TUI Travel said today it is on course to meet full-year forecasts and is raising about £440m of funds to refinance its £900m shareholder loan with parent TUI AG. TUI intends to offer £300m of senior unsecured convertible bonds, while banks will provide additional revolving credit facilities of £140m. In a separate statement, the company said trading is in line with expectations and it remains 'satisfied' with business across all open seasons.Pub group Enterprise Inns has seen the number of tenanted pubs facing closure reduce slightly and demand lessen for its tenant support scheme, though the trading environment still remains very tough.Barclays is in talks to buy the banking division of Standard Life. The move is part of its strategy to snap up businesses while its rivals try to rebuild their balance sheets after the financial crisis. Standard Life is talking to several parties, but Barclays is understood to be the most likely bidder. Standard Life bank has savings balances of £5bn, mainly through the growth of self-invested personal pensions (Sipps), and about £9.7bn in mortgages, the Times writes.Jessops, Britain's largest photographic and camera retailer, will today come under the control of its bank, pension fund and an employee trust under a debt-for-equity swap that will leave investors with less than 5p in the pound. HSBC will take a 47% stake in return for forgoing £34m of debt. The company said that the move would save 2,000 jobs, according to the Times.Dell, the number two personal computer maker, will announce on Tuesday a high-end line of laptops that include microprocessors designed by the UK's Arm Holdings, a first for the company. The machines will run Microsoft's new Windows 7 operating system on an Intel chip most of the time. But the Arm chip and a version of the free operating system Linux will be used for instant access to some functions as soon as the laptop is turned on, the FT says.