RAMSEY CROOKALL & CO
MIDDAY REPORT 10 MARCH 2011
Surprisingly weak data out of China this morning has sent shares lower
overall, while a stream of company updates has been given a mixed
reception.
Argos and Homebase owner Home Retail Group has lowered full year profit
guidance as trading remains tough, especially at Argos. The shares are
down 8%. The guidance range for the year just finished has been lowered
to between £250m and £255m, versus market consensus of £260.9m. "There are
clear signs of further pressures on consumer spending, with recent trading
conditions, particularly at Argos, proving to be more difficult and volatile
than we anticipated,” said boss Terry Duddy.
Meanwhile supermarket Morrisons is also predicting tough times but it is
bucking the downward trend today after it beat expectations in 2010 as its
reputation for value had hard-pressed shoppers flocking to its stores.
Underlying pre-tax profits totalled £874m for the year, ahead of estimates
and up from £767m the previous year. Turnover climbed by 7% to £16.5bn.It
expects higher taxes, government spending cuts, inflation and rising
unemployment to continue weighing on consumer confidence in 2011, but says
its value offering leaves it well positioned to deliver further profit growth.
Finally, struggling pubs group Punch Taverns is posting good gains after it
claimed its turnaround campaign remains on track, with strong sales growth
in its managed estate in the second quarter while trends in the leased
estate improved in the second quarter. In a statement covering trading
for the 12 weeks to 5 March, Punch said its managed estate enjoyed like
for like (LFL) sales growth of 8.6% from the corresponding period a year
earlier. That raised LFL sales growth for the first two quarters of the
group’s financial year up to 4.9%.
THE FTSE 100 AT NOON IS DOWN 60 @ 5876
THE DOW JONES CLOSED DOWN 1 @ 12,213
THE NASDAQ COMP CLOSED DOWN 14 @ 2751
Exchange Rates
GBP – USD 1.615
GBP - EURO 1.1675
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