London pre-open: Weak start threatens winning streak

7th Sep 2010 07:31

London's seven-day run of gains could end Tuesday as experts predict a bout of selling when trading starts shortly.Futures prices indicate a 17-point drop for the FTSE 100 when business gets underway. There's little by way of company reports to get traders excited, but all eyes will be on the US later as Wall Street returns from the Labor Day break.Over here, Barclays will no doubt hog the headlines after it confirmed Bob Diamond, head of its investment banking arm, Barclays Capital, will take over as chief executive when John Varley steps down at the end of March next year. Diamond, who's been running the division since 1997 when it was BZW, becomes president and deputy group chief executive at the beginning of next month. Varley stays on to advise on regulatory matters until 30 September 2011. Costa Coffee and Premier Inns owner Whitbread said like for like (LFL) sales growth has accelerated since June. Year on year sales growth in the 24 weeks to 19 August was 7.9%, up from 7.6% in the 13 weeks to 3 June. Costa Coffee sales eased off though to 8.3% from 8.5%. Premier Inn's quickened to 10.7% from 10.5%, while the pub restaurants business improved from 3.6% to 3.9%. "We remain confident about the outturn for the year, despite facing tougher comparatives in the second half," the company said.Good sales of food through its managed outlets are keeping pub operator and brewer Greene King on track. After 18 weeks to 5 September, like-for-like sales at Greene King Retail were up by 4.4% and sales at Scottish arm Belhaven 3.3% ahead. Food sales at the managed businesses were especially strong, with growth of 8.6% like-for-like and margins also better than this time last year. Tenanted and leased pubs had a tougher time with challenging with average underlying earnings up by 0.7% in Pub Partners after 16 weeks. Equipment rental group Ashtead trumped the market's profit expectations handsomely in the first quarter of its financial year. Underlying profit before tax in the three months ended 31 July was £11.9m, up 35% (18% at constant exchange rates) from £8.8m in the company's first quarter of 2009. That figure beat the most optimistic broker forecast of £7.4m.