London afternoon: Coalition hopes lift Footsie

12th May 2010 15:07

Investors' attention remains firmly focused on the assembly of prime minister David Cameron's new government and his first press conference with new partner Nick Clegg.The pair seemed indistinguishable as they stood on the lawns of No 10 Downing St, but they were given an indication of the economic challenges facing them earlier in the day with figures showing that unemployment surpassed 2.5m in the first quarter of 2010.The number of people out of work climbed by 53,000 to 2.51m during the period, according to figures based on the International Labour Organisation (ILO) measure.Travel Groups are the stand-out risers today with TUI Travel, Thomas Cook and Carnival all posting healthy gains. Royal Bank of Scotland is the weakest performer.Outsourcing companies Capita and Serco, which had been concerned about the hung parliament as they depend on government spending for revenues, are doing well.In company news, Tullow Oil says it has continued to perform "very strongly" in 2010 and remains "very positive" about the outlook for the year. Significant progress has been made on the Ugandan pre-emption and farmdown, the Jubilee Phase 1 development project in Ghana remains on track for first oil in the fourth quarter and the Tweneboa-2 appraisal well has established Tweneboa as a major oil and gas-condensate field. Kesa Electricals reported a 1.2% drop in like for like sales in the period from 9 January to 30 April as a positive performance at its larger French operations failed to offset weakness at the Comet retail chain. Darty France's like for like sales increased by 0.5%, excluding the Darty Box, though Comet's revenue dropped by 4.0% on a like for like basis. Software group Micro Focus expects to report total revenues of approximately $432m ($274.7m) for the last six months after a 'solid' end to the period. Group EBITDA margin, excluding exceptional items and stock based compensation, for the same period, is expected to be approximately 40% for the full year, the firm added.Wellstream is trading in line with expectations and said the level of award activity currently being experienced, particularly in Brazil, gives it confidence in the outlook for the business. The group, which designs and manufactures flexible risers and flowlines for the oil and gas industry, said its order book has improved since the year end with a number of key awards, particularly in Brazil.Housebuilder Barratt expects to report an underlying profit in the second half of its current financial year after a pick-up in both prices and forward reservations. For the six months to 30 June 2010 its average selling price increased by around 15% on the prior year equivalent period and will be at least 10% up for the full financial year.Catering giant Compass expects a strong new business pipeline and a stabilisation in like for like volume to deliver modest organic revenue growth during the second half. The firm grew profit before tax by 19% to £459m during the first six months and underlying profit by 14% to £462m.Wood Group says not much has changed since its 2009 results announcement at the beginning of March, and the energy sector services firm thinks 2010 will be in line with expectations. Animal breeding firm Genus has traded in line with expectations in the first four months of the year and said it remains very positive about it's long-term growth prospects. Full-year profit fell 10% at bus and trains company FirstGroup, hit by the recession and higher fuel costs, while poor weather during the fourth quarter cost the business £16m.