RAMSEY CROOKALL & CO 11th October 2012

      Morning Report

The FTSE 100 trades up 0.4%, edging higher. Burberry puts in a stellar performance, up 8.6% after a reassuring 1H update. Banks are also strong with Lloyds, RBS and Barclays up.

Burberry, the luxury fashion chain which issued a profit warning last month, confirmed like-for-like (LFL) sales growth in its stores slowed dramatically in the July-September quarter, but the good news is that towards the end of the period things started to pick up again.

Burberry also had good news on the operating margin front, saying the Retail/wholesale operating margin in the six months to September 30th 2012 is now expected to be at least in line with the same period last year (14.9%), rather than lower as previously guided.

Elsewhere in the world of retail investors are far from sanguine about the impending departure of Kate Swann, the Chief Executive Officer of newsagent chain WH Smith.

Greggs, the hot pastry-based snack dispenser of choice for British politicians seeking a photo-opportunity, left a sour taste after it said LFL sales will remain negative in the final quarter of 2012. LFL sales fell 2.6% year-on-year in the 14 weeks to October 6th as consumers continued to tighten their purse strings.

Royal Bank of Scotland (RBS) said it has priced Direct Line at 175p a share, valuing the insurance firm at over £2.6bn. The offer comprises 450m existing shares, representing 30% of the 1.5bn total, raising RBS £787m. The flotation price is in the bottom half of the indicated range of between 160p and 195p a share.

Assets under management at fund manager Ashmore picked up sharply in the July - September quarter, largely on the back of a positive investment performance. The quarter saw assets under management increase 6.8% to $68.0bn, driven by positive investment performance of $3.7bn and net inflows of $0.6bn. Investment performance was positive across all investment themes, it said.

Hot on the heels of its failed merger with Airbus owner EADS, defence firm BAE Systems has confirmed that trading since its interim results at the beginning of August has been in line with management expectations.

Peace could be about to break out at Bumi, the Indonesia-focused mining giant. It has received a proposal from major shareholder, the Bakrie Group, which wants to swap its stake in the group for a stake of equivalent value in Bumi Resources, Bumi's Indonesia-listed affiliate which is under investigation for alleged financial irregularities.













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