RAMSEY CROOKALL & CO
EVENING REPORT 13th January 2011
A weak start on Wall Street and grim performance by supermarket Tesco is keeping London
firmly in the red today.
Disappointing weekly jobs data in the US scuppered any chance UK blue chips had of turning
positive, while the Bank of England’s decision to leave interest rates at 0.5% and the asset
purchase programme unchanged was as expected.
Elsewhere, Tesco took a beating after claiming the snow and ice caused weaker than expected
UK like for like sales that lagged rivals. Like for like sales in the UK for the six weeks to
8 January were up just 0.6% - about half the figure analysts had predicted – and total sales
grew 4.2%.Group sales rose 7.6% during the period though, with international sales up 14.2%.
Asia leapt 24.2%, led by China and Thailand.
Home Retail Group was in demand after it said expects full-year pre-tax profits to come in
at the mid-point of its previously guided range of £250m to £275m after both of its brands
performed in line with expectations. Sales at the catalogue-based chain Argos fell by 3.2% to
£1.861bn in the 18 weeks to 1 January, or by 4.9% on a like-for-like basis, stripping out the
benefit of new stores. Kingfisher, the owner of the B&Q chain, climbs in sympathy
Finally, bike and car parts seller Halfords saw the fall-off in like for like (LFL) sales accelerate
in the final quarter of 2010 in its retail estate, and the group now expects full year profits will
be at the lower end of market expectations. In the 13 weeks to 31 December retail revenues fell by
6.6% on a LFL basis, taking the decline in the final 39 weeks of 2010 to 5.2%. Guidance that full
year gross margins will be broadly flat has been maintained.
THE FTSE 100 CLOSED DOWN 26 @ 6023
THE DOW JONES AT 4.30 IS DOWN 5 @ 11,748
THE NASDAQ COMP AT 4.30 IS UP 1 @ 2739
Exchange Rates
GBP – USD 1.58
GBP – EUR 1.18
Thursday 13th, January 2011 05:11pm.
