London open: Early gains for blue chips

5th Oct 2010 08:51

Blue chips have moved up gently in the first hour helped by reassuring trading updates from Tesco and TUI Travel.Supermarket giant Tesco's first half profits surged 12% despite sluggish underlying sales in the UK. Pre-tax profits rose to £1.6bn in the half year to August on sales up 8.3% to £32.9bn including VAT. All regions saw an improved trading performance in the second quarter over the first, Tesco said. Group sales increased by 8.8% over the latest three months.Travel firm TUI Travel allayed fears about full year trading by saying it is confident results will be in line with previous guidance. Summer holiday bookings in the year to September 26 were up, year on year, in all regions except the Netherlands, which showed a 2% fall. Gains per region were as follows: UK +2%; Nordic region +17%; Germany +5%; France +11%; Belgium +4%.Satellite broadcaster Inmarsat is the worst performer after Harbinger Capital last night confirmed plans to sell nearly half of its stake. Cranswick has had a "positive" first half, with turnover up 8% at the meat supplier, or 12% adjusted for the sale of its cooked meats business.Optical components maker Gooch & Housego said results for the year ended 30 September 2010 will be comfortably ahead of market expectations as it ramped up output to meet increased demand. Northern Foods returned to sales growth in the second quarter as chilled foods and bakery did well, offsetting the ongoing problems with its Goodfella's frozen pizza business. Like-for-like sales in the 26 weeks to September increased by 3.0% reflecting a 7.1% second quarter improvement as chilled foods rose sales by 16.4% and bakery sales jumped 10.9%. Stobart Group's fleet of distinctive green lorries will be delivering soft drinks around the UK after it won a "multi-million pound" contract with Britvic.