London afternoon: Inmarsat takes flight

8th Feb 2011 14:40

Though miners remain a drag on the index following the Chinese interest rate hike, Footsie struggled back into positive territory over the lunch time session.China raised its key interest rates for the third time since October, with the benchmark one year lending rate hiked by a quarter of a point to 3%, the People's Bank of China said.Mining giant Xstrata has given up most of its early gains. The company enjoyed a sharp surge in profitability in 2010 as the benefits of 2009's restructuring activities kicked in and production volumes soared. Profit before tax rose to $7.11bn, excluding exceptional items, from $1.87bn. Anglo American, Lonmin and ENRC are among the other miners under pressure but gold miner African Barrick retains its lustre.Chip designer ARM is also off the pace after Barclays Capital downgraded the stock to "equal weight", possibly taking its cue from ARM's chief technology officer Mike Muller, who recently pocketed more than £2m from the sale of most of his stake in the Cambridge company. Muller himself was following the lead of chief executive Warren East, who sold 290,000 shares at 574.69p each last week, and finance director Tim Score, who sold more than two-thirds of his stake. Rival computer chip specialist Wolfson Microelectronics is also on the slide after it saw margins slide to 47% in the final quarter of 2010 from 50.9% in 2009, though the company said the decline was due in part to a temporary supplier yield issue on a high volume part.BG Group grew fourth quarter profits by 3% thanks to higher energy prices and a lower exploration charge. Operating profit rose to $1.80bn in the last three months of 2010 from $1.76bn the year before.The drilling results at Premier Oil's Catcher North Well in the UK Central North Sea have indicated an oil pay at the lower end of the company's expectations. Premier now estimates the overall oil reserves range for the combined Catcher, Catcher North and Catcher East discoveries at between 40 and 80mmbbls.Encore Oil and Nautical Petroleum are also involved in Catcher and are under pressure today.Retailers such as Marks & Spencer and JD Sports Fashion are doing well after the British Retail Consortium reported that like for like sales on the high street grew 2.3% last month compared with January 2010The political turmoil in Egypt and Tunisia will knock £20m from Thomas Cook's profits this quarter, the travel group warned, disrupting what had been a good start to the year. Revenue in the first quarter rose by 7% to £1.81bn reflecting increased volumes and improved product mix, while the traditional seasonal loss fell to £37.3m.Broadband telephony group TalkTalk is lower after saying it is to axe 580 jobs as part of a £25m cost cutting drive after sales and subscriber numbers fell in the third quarter. The cuts are part of a plan to integrate all the firm's technology and IT capabilities and eliminating functional duplication. Satellite launcher Inmarsat is wanted despite US fund selling off its 14% stake at a price of 670p per share.Specialist insurer and reinsurer Beazley pumped up profit by 59% in 2010 and is in the mood for acquisitions. Profit before tax swelled to $250.8m from $158.1m in 2009, though this year's number was boosted by a one-off foreign exchange gain of $33.7m. McBride, maker of own label products for retailers, met forecasts with a 29.6% drop in first half profit as it battles with rising raw materials prices and a difficult retail environment, particularly in the UK. The shares are under pressure. The group, which supplies supermarkets such as France's Carrefour and Tesco, said revenue for the six months ended 31 December 2010 fell 1% at £407.9m from £412.4m a year earlier. Pre-tax profit fell to £15.5m from £22.5m.Hovis to Branston pickle group Premier Foods has sold its canned foods businesses to Princes Limited for £182m, the second major disposal in a fortnight for the debt laden group.Civil engineering consultant Hyder Consulting has reassured shareholders that it is trading in line with expectations, as the Queensland floods have had "minimal disruption" on its Australian business, but that did not stop the market from taking fright at talk of challenging trading conditions in the Middle East due to protracted contract talks.Some pharma stocks are taking a bit of a battering, notably Ark Therapeutics and Antisoma. The former has offloaded its wound care business to Crawford Healthcare for up to £2.7m, while Antisoma has effectively put the "for sale" sign up after work on the company's flagship leukaemia drug was abandoned last month.