RAMSEY CROOKALL & CO
MIDDAY REPORT 20th January 2011
The top share index is lower after a disappointing session in the US yesterday, with
pdates getting a poor reception here.
In company news, Associated British Foods (ABF) falls back after saying that it grew revenue
by 10% in the first 16 weeks of the financial year, in line with expectations, but that rising
commodity prices are hitting margins and the weather-hit sugar crop will trim annual profits.
Revenue at constant exchange rates was up 7%. Higher prices boosted profits at the sugar business
where revenue rose 7%, but the recent increase in temperatures following the pre-Christmas freeze
is damaging the 25% of this year’s sugar beet crop still to be processed. Higher commodity costs
are forcing the firm to raise prices at all businesses.
Elsewhere, insurance group RSA Insurance is also lower. It had a tough winter, with losses
relating to the weather in November and December £142m more than normal. For the year as a
whole the weather impact was around £255m above normal levels. Despite the effects of hurricanes,
earthquakes and the big freeze, the chief executive officer Andy Haste said the group had still
posted a “strong result” for 2010, with 11% growth in net written premiums, a combined operating
ratio (COR) of between 96.5% and 97% and an operating profit of £600m-£640m.
Finally, the extreme weather over Christmas kept drinkers at home, taking an estimated £2m off
Enterprise Inns’ first quarter operating profit, Britain’s biggest pub owner said. Enterprise
said the disappointing trading came after a solid start to the year. Net income was down by 1%
during the quarter, with net income per pub down by about 2%.
THE FTSE 100 AT NOON IS DOWN 84 @ 5891
THE DOW JONES CLOSED DOWN 12 @ 11,825
THE NASDAQ COMP CLOSED DOWN 39 @ 2725
Exchange Rates
GBP – USD 1.59
GBP - EURO 1.18
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