RAMSEY CROOKALL & CO
31 MARCH 2011
MORNING REPORT
The FTSE 100 is trading just 0.1% higher, with Corporate News offering some support. However,
investors are wary ahead of announcements later this afternoon regarding the results of stress
tests on the Irish Banks.
Tour operator TUI Travel is higher after saying underlying trading has been “satisfactory”
during the last six months. Like Thomas Cook on Tuesday, it has not changed its estimate of the
cost of trouble in North Africa. Uprisings in Egypt and Tunisia are expected to have cost the
company between £25m and £30m in the second quarter, as flagged last month.
London Stock Exchange (LSE) moves ahead after saying it grew average daily value traded in UK
equities by 2% over the past year and is finishing the period on a strong note.
But there is more bad news for the retail sector. Following electrical specialist Dixons Retail’s
profit warning yesterday, Mothercare falls back after the babycare retailer saw margins squeezed
in the quarter to 26 March after slashing prices to clear its autumn and winter stock amid a weak
consumer environment. Total sales were up by 10.2% from the same period the previous year, with
international operations leading the way. Sales in Britain were up by 4.7%, though they were down
by 2.4% on a like-for-like basis, which excludes the wholesale business.
Contract caterer Compass’s good start to the new financial year has continued through the six-month
period, leaving it comfortable with forecasts for the full-year. In a statement ahead of interims
on 18 May, the firm said constant currency revenue growth, including the impact of acquisitions,
was about 9.5%, with organic growth at 5.5%. There’s also been a “slight” increase in like for
like revenue against the weaker comparatives of the first half of 2010. Margin has improved by
about 20 basis points.
Energy supplier Scottish and Southern Energy (SSE) is on track to report underlying profit before
tax for the full year in line with the consensus of analysts’ forecasts, which currently stands at
£1,301m. The company, which is about to enter its close period on Friday prior to publication of
full year results on 20 May, said it expects to deliver a full-year dividend increase of at least
2% more than Retail Price Index inflation, and of at least 74.5 pence per share.
THE FTSE 100 AT 09.30 IS UP 8 @ 5,956
THE DOW JONES CLOSED UP 71 @ 12,350
THE NASDAQ COMP CLOSED UP 20 @ 2,776
Exchange Rates
GBP – USD 1.6121
GBP - EURO 1.1366
Thursday 31st, March 2011 10:10pm.
