London open: Burberry finds market hard to please
London has made a hesitant start, with banks and miners a drag on the index in the early going.
Investors are reluctant to commit themselves too much ahead of today's inflation figures at 9:30 which will almost certainly require Mervyn King, the governor of the Bank of England, to write another letter to the Chancellor of the Exchequer, George Osborne, to explain why inflation is way over target. The letter, usually published an hour or so after the inflation data, may contain new information on the Bank's current expectations of inflation trends.
On the corporate front, stock market darling Burberry is finding the market hard to please, for once. The luxury fashion chain's adjusted profit before tax in the six months to the end of September rose 26% from a year earlier to £162m. Brokers Charles Stanley and Credit Suisse had both forecast profit of £159m. Revenue was up 29% year-on-year to £830m, with consistent double-digit percentage growth seen in retail and wholesale, in all regions and product divisions. The interim dividend has been bumped up by 40% to 7p. Despite all that, the shares are on offer at a cut price.
Cable and Wireless Worldwide is another stock on the slide. The struggling telecoms firm, infamous for its generous executive remuneration, saw underlying profit before tax in the six months ended September tumble to £35m from £64m the year before, on revenue that eased to £1,072m from £1,123m. However, once goodwill impairment of £436m, a deferred tax asset write down of £146m and a £42m write off of obsolete assets are taken into account, the company fell into the red, with a pre-tax loss of £443m, versus an "as reported" profit of £53m the year before.
Against that background, the group has suspended future dividend payments until further notice, though it will pay an interim dividend of 0.75p this time round.
Group chief executive officer (CEO) John Pluthero is to leave the business in March 2012, to be replaced by ex-Vodafone man Gavin Darby. Pluthero was formerly chairman of Cable & Wireless Worldwide, and took over from Jim Marsh as chief executive in June of this year when Marsh made an abrupt departure, pausing only to collect £650,000 in lieu of a year's salary. Pluthero was immediately given a £75,000 pay rise to £675,000 per annum when he took on the CEO role. Shares in the company are at about one-third of the level they were when Cable & Wireless was split in twain at the end of the first quarter of 2010.
First half underlying profit before tax of £132m for real estate investment trust British Land was 3.9% ahead of last year. The group's portfolio valuation edged up by 2.2% from a year earlier to £10.2bn at the end of September. Net asset value per share on a European Public Real Estate Association (EPRA) basis rose 4.2% from a year earlier to 591p. The quarterly divi has been held at 6.5p.
FTSE 100 - Risers
Smith & Nephew (SN.) 583.00p +1.83%
Serco Group (SRP) 499.80p +0.71%
Rolls-Royce Group (RR.) 731.50p +0.62%
Aggreko (AGK) 1,798.00p +0.50%
British American Tobacco (BATS) 2,904.50p +0.38%
Sainsbury (J) (SBRY) 305.10p +0.36%
Next (NXT) 2,810.00p +0.32%
British Sky Broadcasting Group (BSY) 745.00p +0.27%
Smiths Group (SMIN) 957.00p +0.26%
Centrica (CNA) 304.50p +0.26%
FTSE 100 - Fallers
Burberry Group (BRBY) 1,352.00p -4.86%
Essar Energy (ESSR) 279.50p -2.61%
Barclays (BARC) 170.00p -2.33%
Vedanta Resources (VED) 1,099.00p -1.88%
Lloyds Banking Group (LLOY) 27.85p -1.85%
Royal Bank of Scotland Group (RBS) 21.54p -1.82%
Xstrata (XTA) 995.00p -1.68%
GKN (GKN) 189.90p -1.56%
ARM Holdings (ARM) 622.50p -1.50%
Lonmin (LMI) 1,057.00p -1.49%
FTSE 250 - Risers
Oxford Instruments (OXIG) 915.00p +8.61%
Micro Focus International Plc (MCRO) 372.90p +6.82%
Drax Group (DRX) 576.50p +4.06%
Afren (AFR) 88.60p +2.49%
Daejan Holdings (DJAN) 2,735.00p +2.24%
Grainger (GRI) 97.75p +1.88%
New World Resources A Shares (NWR) 466.10p +1.46%
Premier Oil (PMO) 364.10p +1.25%
Merchants Trust (MRCH) 368.00p +1.10%
Elementis (ELM) 141.00p +1.08%
FTSE 250 - Fallers
Cable & Wireless Worldwide (CW.) 27.15p -10.10%
London Stock Exchange Group (LSE) 825.50p -4.40%
Premier Foods (PFD) 5.50p -4.18%
TalkTalk Telecom Group (TALK) 123.60p -3.81%
Aveva Group (AVV) 1,563.00p -3.64%
African Barrick Gold (ABG) 540.00p -3.23%
Renishaw (RSW) 920.50p -3.16%
Kenmare Resources (KMR) 38.45p -2.63%
Allied Gold Mining (ALD) 148.00p -2.31%
easyJet (EZJ) 357.60p -2.30%