London afternoon: Waiting for the dust to clear

17th Nov 2010 14:35

Investors continue to adopt a wait and see approach, biding their time until the Irish debt situation becomes clearer.UK economic news has been good, but not amazingly so. There was an unexpected fall in unemployment in October and a widely-anticipated three-way split in views on the Bank of England's Monetary Policy Committee (MPC) when it last met.The number of Jobseekers' Allowance claimants fell by 3,700 in October to 1.4654m, the first drop since July.The Bank of England's interest rate setting committee, the MPC, was split three ways again this month, though a large majority still voted for no change in either the level of interest rates or the size of the current quantitative easing programme. Andrew Sentance again wanted a quarter-point rise in interest rates while Adam Posen voted for an increase in the stimulus package to £250bn.Credit checking firm Experian is a star performer after it saw improving trends across all regions in the first half of its financial year. Revenue from continuing activities in the six months to 30 September was up 8% at constant exchange rates, while organic revenue growth was 7%. Total group revenue improved to $2bn from $1.9bn the year before. Profit before tax fell to $283m from $316m.Derivatives broker ICAP is another in demand after first half underlying revenue rose 2%. Total turnover in the half year to September rose by 9% to £867m, but profits tumbled from £150m to £116m after one-off charges. Underlying profits rose by 2% to £183m with operating profits up 9% at £197mUtility group Centrica said it had a strong third quarter, with operating profit forecasts for 2010 "slightly" ahead of current market expectations, though earnings per share will likely match estimates. British Gas, which last week announced a 7% hike in bills for both electricity and gas, is still doing well. The number of residential energy accounts on supply is up 270,000 since the start of the year, while services accounts have jumped 181,000. BHP Billiton is to increase its spending on its iron ore mine operation at Pilbara, Western Australia by $635m. The investment comes a month after BHP and Rio Tinto abandoned plans to merge their Pilbara operations in the face of regulatory, customer and shareholder objections.Rolls-Royce provided a welcome distraction from its aeroplane engine woes today, announcing the first order for its new 'wave-piercing' boat to the Norwegian shipping group Farstad.Business publisher Informa saw continuing growth and recovery in its three main divisions in the first 10 months of 2010. The company said it is trading in line with management expectations and is seeing encouraging renewals and forward bookings for next year.Chip designer Imagination Technologies is building up its war chest to fund an acquisition spree, starting with HelloSoft, a US voice over internet protocol (VOIP) operator. Imagination is paying a maximum of $47m for Hellosoft, a company that has technology patents that are complementary to Imagination's. The final consideration is dependent on the performance of Hellosoft over the next three years.The coalition government's strategic defence review is broadly neutral for military decoy flares and mine detection firm Chemring, which today uncovered a 42% increase in revenue for the fourth quarter. In 2011, the UK will only represent 15% of group revenue, it said.Premier Foods, the Hovis bread, Bisto gravy and Branston pickle group, has received approaches for its East Anglian canning operations, which could lead to a sale of the unit. The company said back in August that it was "open minded" about disposals as long as they deliver shareholder value and speed up the reduction of average net debt/EBITDA.That was not the only M&A-related action in the food sector for investors to digest. Irish ready made meals supplier Greencore and Goodfellas pizza and Fox's biscuits group Northern Foods have agreed a 50:50 merger that will save £40m a year. The new company will trade as Essenta Foods when the deal completes, expected during the second quarter of 2011. Over 30% of Greencore and almost 12% of Northern's shareholders have already backed the move.Mother and baby retailer Mothercare produced a 22% surge in half yearly profit and increased its dividend as global sales continued to flourish compared to a weaker UK performance. For the 28 weeks ended 9 October 2010 underlying pre-tax profit increased to £12.2m. Group sales were up 2.5% at £397.1m.Fashion chain Ted Baker's sales soared by over a fifth in the past three months as wholesale sales powered forward and UK business held up well.Housebuilder Barratt Developments has had a weaker than expected autumn selling season, though new site openings will drive a "limited" increase in volume growth for the full year.SIG, a supplier of insulation and construction products, said it is confident of reaching full year profit expectations and posted a modest rise in second half sales.Engineer Morgan Crucible's profits this year are expected to be in "in the top half of analyst forecasts" after strong sales since the half year.Plant hire specialist Speedy Hire has grown UK revenue, volume and average hire rates for the third quarter in a row following a further increase in the three months to 30 September, and October was up 5% on the year before.Entertainment content owner and distributor Entertainment One saw underlying earnings increase by a third in the first half and said the second half has started off well.Texas-focused oil explorer Pantheon Resources' loss for the year to September fell to £2.54m, from £3.05m last year, which included impairment charges of £1.4m for the abandonment of the Vision Rice University number 1 well.Ethanol producer GTL Resources is doing well after more than doubling interim pre-tax profit to $6.2m from $2.5m last year on revenue up 2% to $109.2m.Record company and music publisher Chrysalis piped up to remind us that it will also be a beneficiary of the deal to put Beatles songs on iTunes, as the Fab Four's legendary producer George Martin is one of its clients.