London afternoon: Back in the blue

12th May 2009 14:11

In keeping with the day's topsy-turvy theme, the Footsie is back in positive territory, despite the weakness of banks and miners.Royal Bank of Scotland, Lloyds Banking Group and Barclays are all easier after Credit Suisse suggested the margins of UK banks will come under pressure. In the mining sector Lonmin is still out of favour after yesterday's cash call and slide into the red. Rio Tinto is the other big loser in the sector, but silver miner Fresnillo defies the trend.On a positive note, retailers such as Tesco, Wm. Morrison and Next are wanted after relatively upbeat retail sales figures from the British Retail Consortium.Outsource giant Serco is going well after the firm, whose range of activities includes London's Docklands Light Railway, reported a strong start to 2009 with £1bn in new contracts and preferred bidder status on another £250m's worth. Fears for the future of the dividend are undermining Imperial Tobacco, the company behind Lambert and Butler cigarettes. The company moved into the red due to the costs of restructuring its latest acquisition, the Gauloises firm Altadis.Pubs group Enterprise Inns has called time on its dividend as it seeks to pay down its debt pile. The company announced an interim pre-tax profit of £103m, in line with market expectations but down from £132m a year earlier. Holiday Inn hotel chain InterContinental Hotels Group said occupancy rates started to stabilise in the first quarter but room rates came under pressure. Revenue in the first three months of 2009 ease to $342m from $448m a year earlier. Ireland-based Tullow Oil has performed strongly in 2009 to date and said the outlook for the rest of the year remains 'very positive'. The Jubilee development is on track for first oil in the second half of 2010 and the group has maintained a 100% success rate with its drilling operations in both Ghana and Uganda where the Tweneboa-1 and Giraffe-1 wells, in particular, yielded substantial new discoveries.Redrow said it has restarted construction on certain developments as sales volumes look to have stabilized but cautioned that the market is likely to remain challenging into 2010.Power generator International Power said its portfolio is performing in line with expectations in 2009. Outlook for the year as a whole remains little changed from the situation outlined in mid-March, when the company said 2009 profits are likely to be below 2008 levels unless prices improve in the UK and USA.Support services group Babcock has charged forward after it reported a forecast busting full year profit, upped its dividend and predicted good growth prospects. Oil services group Wellstream fell after it warned supplier problems have reduced profitability by around £7m or £8m this year, while engineer Tomkins is being whacked by the problems besetting General Motors and Chrysler.Hovis to Bird's Custard group Premier Foods pushed sales up by 3% in the first four months of 2009 helped by price rises last year. Profit expectations for this year are unchanged.General insurer and reinsurer Brit Insurance has seen an improved trading environment in 2009. Gross written premiums in the first quarter were up 40.5% to £557.4m from £396.7m a year earlier. At constant exchange rates, the growth was 18.5%.Acquisitive transport and logistics firm Stobart Group is entering a consolidation phase after registering a sharp increase in profits in its first year as a listed company. Profit before tax soared to £23.9m in the year to end-February from £3.5m the year before, partly reflecting the contributions from acquisitions such as James Irlam, WA Developments, Innovate Logistics and Southend Airport.Telecoms network company BATM Advanced Communications said revenues in the first four months of 2009 were little changed from the corresponding period of 2008.African Copper's $22.5m finance package agreed with Zambia Copper Investments (ZCI) took a step closer completion today following a debt deal with its main mining contractor. The firm's shares rallied again today, a day after it finalised a finance deal with ZCI designed to rid the business of short-term debt and bondholder liabilities.Magners cider maker C&C Group slumped into losses and cut dividends as it was weighed down by exceptional losses and a fall in cider sales in both Ireland and Britain. The group also said trading in the first 10 weeks of the new year was mixed. On a constant currency basis, overall revenues were flat year-on-year, despite volumes in the core cider markets being 9% higher than last year.