London afternoon: Prices drift lower

30th Jun 2009 15:24

London continues to sleepwalk to the end of the month, with prices drifting lower in light trading after Wall Street opened in negative territory.With the oil futures contract edging steadily higher, heavy fuel users such as airline British Airways and cruise operator Carnival are on the slide. In contrast, oilfield support services firm Petrofac and oil producers Tullow Oil and Cairn Energyare moving higher.Wolseley is one of the best performers after chief executive Chip Hornsby stepped down with immediate effect to let Ian Meakins take the helm at the building supplies group. Hornsby, who leaves after 27 years at the company, has led the group since August 2006. "While management change is not a major surprise, an external replacement will probably be seen as better news as it should mean that no stone is left unturned, if indeed it hasn't already been turned!" suggests broker Panmure Gordon, which nevertheless remains a seller of the stock.Barclays, Royal Bank of Scotland and Lloyds are off the top but still in the blue after a broadly upbeat review of the UK banking sector by Goldman Sachs yesterday. Barclays gets an extra leg-up from Deutsche Bank which has upped its price target from 220p to 365p.BG has made a big push into the US shale gas market with the acquisition of a 50% stake in US firm Exco's fields in east Texas and north Louisiana. BG will pay $1.055bn for 120,000 acres in the two states, of which 84,000 acres cover the prolific Haynesville shale gas formation.Antofagasta has achieved financial closing and satisfaction of conditions to borrowing for $1.05bn of project financing for the Esperanza copper-gold project in Chile. The miner, which owns 70% of the project, said first disbursement is expected to take place during July.A consortium in which United Utilities has a 40% stake has won a new capital delivery contract with Southern Water worth £225m.Music, DVD and games retailer HMV said against a difficult background it delivered sales and profit growth for the year, driven by good trading in HMV UK & Ireland. Pre-tax profit rose to £61.3m from £52m on sales up 4.4% to £1.96bn. Carpetright slashed its final dividend as profits tumbled by 72% last year, with the carpet retailer warning its sees no upturn for at least 12 months. Pre-tax profit in the year to end April crashed to £16.7m from £59.5m on sales of £483m, down 7.4%.Oil & gas facilities service provider Petrofac has had a good start to the year and is confident 2009 will be another year of strong growth. With year to date order intake across the group of $5.4bn, total backlog is expected to be approximately $8bn at 30 June 2009 (31 December 2008: $4bn).Bus and train operator Arriva said results for the six months will reflect the lower revenue growth rates in CrossCountry but otherwise expected to be broadly in line with expectations.Yellow Pages publisher Yell has started talks with its banks over a comprehensive refinancing, adding that trading in the second quarter of this year took another lurch downwards.Bus and train operator Arriva said results for the six months will reflect the lower revenue growth rates in CrossCountry but otherwise are expected to be broadly in line with expectations.Elsewhere in the sector National Express is boosted by bid speculation after it confirmed yesterday it had received, and rejected, a bid approach from competitor FirstGroup.Bid speculation is also pushing oil explorer Dana Petroleum higher, with Germany's energy company RWE said to be in the frame as a potential buyer.Management Consulting said revenue and underlying profit for the year will be below the same period last year and also warned full year figures could miss expectations.Overall profitability has improved "significantly" in the first six months of 2009 at debt advice firm Fairpoint ahead of the seasonally stronger second half.Pub operator Pubs 'n' Bars reported a pre-tax loss after a 'particularly challenging trading period' and omitted a dividend payment for the year.London pub operator Capital Pub Company posted higher revenues and adjusted profits and said trading remained healthy as Londoners continued slaking their thirsts despite the recession.Display advertising and screens provider Mediazest lost half its value after pre-tax losses widened to £605,000 against £497,000 last year on turnover that rose 15% to £4.4m. Boundary Capital plunged by around a third after the investment firm saw losses grow to €54.7m in 2008 from €2.7m the year before, and said it had drawn down €37.7m of an increased €38.6m debt facility. The company is in refinancing talks with its banker, as is Catalytic Solutions after net losses came in at $20.6m in 2008.