London afternoon: Reckitt fails to cut the mustard

27th Apr 2010 14:35

Footsie drifted lower over the lunch time session, not helped by disappointing results from household goods maker Reckitt Benckiser.Shares in Reckitt sank to the bottom of the FTSE 100 despite the French's mustard maker posting a rise in earnings and sales for the first quarter. The firm said operating profits rose by 14% to £461m. Revenues were up 5% to £2bn. With oil and metals prices in retreat as fears grow about potential delays in financial aid reaching Greece resource stocks are out of favour. Rio Tinto and Kazakhmys are the worst affected in the oil sector while Tullow Oil and Petrofac are the weakest among oil related heavyweights. Petrofac said this morning it has acquired CO2DeepStore, a UK-based CO2 storage company.BP more than doubled profits during the first quarter following stronger than expected results from both the upstream and downstream businesses. Replacement cost profit for the first three months of the year leapt to $5.60bn from $2.39bn a year earlier and up from $3.45bn in the fourth quarter of 2009. Royal Dutch Shell provides some cheer to the oil sector, however, after JPMorgan upgraded the stock to 'neutral' from 'underweight'.Lloyds Banking has turned south after initially opening firmer on news that it returned to profitability in the first quarter. The part-nationalised lender expects this momentum to be sustained throughout the rest of the year. The lender did not provide a profit figure in today's statement, but said it made a profit on a combined businesses basis due mainly to a significant downward trend in impairments. Elsewhere in the financial sector Prudential is a strong performer on a report in the Times that its biggest shareholder has been moving behind the scenes to orchestrate a potential break-up of the insurer.Standard Life announced that Jackie Hunt has been appointed chief financial officer of the life insurer with effect from 14 May. Hunt joined Standard Life in January 2009 as deputy finance director.Customers smoking roll-ups rather than branded cigarettes kept earnings momentum strong at Imperial Tobacco in the first half, despite the impact of recession in many of its main European markets. Revenue in the six months to March jumped by 8% to £13.4bn, from £12.4bn, with profits coming in at £974m versus a loss of £184m last time. Drugs giant AstraZeneca has received more good news on its cholesterol-lowering drug Crestor after the European Union cleared its use in nineteen European countries for patients at risk of a first heart attack.A big rebound by its automotive division helped engineer GKN swing back strongly into profit in the first three months of 2010. "Market conditions in the first quarter of 2010 have been encouraging and all its major businesses have continued to make good progress," it said. Premier Foods, the company behind Hovis bread, Branston pickle and Sharwood's sauces, reported a 5.1% drop in first quarter sales and said it remains cautious about the consumer and trading environment for 2010.Electrical component maker Laird said interim pre-tax profit was ahead of the same time last year as its markets continue to emerge from the depressed conditions of 2009.Internet and catalogue home shopping company N Brown reported a 12.6% rise in annual pre-tax profit and issued a confident outlook for 2010. Adjusted pre-tax profit rose to £93.1m for the 52 weeks to 27 February 2010. Total group revenue rose 4.2% for the full year to £690.0m.Elsewhere in the retail sector homewares retailer Dunelm is looking fragile after it saw a sharp slowdown in sales growth over the past four months and cautioned it faces tough comparisons over the rest of the year. Meat focussed retailer Crawshaw is on the upswing, however, having returned to profit for the year as exceptional items were not as large as last year.Connaught, the support services group, perks up after interim results that showed revenue up 17% and adjusted profit before tax up 20%.Polo Resources and Caledon Resources have reached an agreement in principle to a merger to be effected by an all-share offer by Polo for Caledon. The implied offer price for each Caledon share would be 61.56p, which represents a premium of 14.53%.Offshoring specialist Xchanging expects to meet full-year forecasts and said sales momentum since the start of the year has been encouraging.Flat speaker maker NXT sees its share price fade after it said revenue for the January-April period has been below management expectations due to the delay of new products.