RAMSEY CROOKALL & CO

MORNING REPORT 6 JANUARY 2011

The top share index was little changed in early dealings but a raft of trading updates from retail and other sectors has given traders plenty to ponder. The index has now moved circa 30 points.

Mother and baby retailer Mothercare today warned that it now expects full year underlying pre-tax profit to be below current market expectations after disappointing Christmas sales. UK like for like sales in the third quarter fell 5.8% as freezing temperatures kept would be shoppers at home. Toy sales were particularly affected, as were online sales as the retailer cut off Christmas orders early, amid adverse weather conditions, to make sure customers received their goods in time.

Elsewhere, greetings card specialist Clinton Cards has also pointed to the negative impact of wintery weather in the run-up to Christmas, warning that pre-tax profits for the year to July 31 are likely to fall short of current market expectations. Like-for-like sales fell by 2% from the same period a year ago at its UK stores in the five weeks to 2 January. At its Irish operations (with 14 out of the group’s 824 stores) like-for-like sales were down by 12.2%.

However, it’s not all doom and gloom in the retail sector. Wine merchant Majestic Wine raised a glass to Britons’ refusal to let the winter snowfall prevent them celebrating Christmas after reporting strong sales over the festive period. Total UK store sales, excluding VAT, were up 6.4% for the nine weeks of Christmas trading from 2 November 2010 to 3 January 2011. Over the same period, like for like UK store sales growth, excluding VAT, was 3.7%.

THE FTSE 100 AT 10.10 IS UP 32 @ 6076

THE DOW JONES CLOSED UP 31 @ 11,722

THE NASDAQ COMP CLOSED UP 29 @ 2702

Exchange Rates

GBP – USD 1.54 GBP – EUR 1.17







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