16th Apr 2015 15:55
LONDON (Alliance News) - The UK's main stock indices ended lower Thursday, even after the FTSE 100 hit a new intraday high at the open, with the focus on a large number of corporate updates from the likes of drinks makers SABMiller and Diageo and consumer goods giant Unilever.
The FTSE 100 ended down 0.5% at 7,060.45, having hit a new intraday record high of 7,119.35 in the first minute of trade. The FTSE 250 closed 0.8% lower at 17,730.27, but the AIM All-Share ended up 0.4% at 749.22, marking its eighth successive session of gains.
European stocks also closed lower, with the French CAC 40 closing down 0.6% and the German DAX 30 ending down 1.9%. At the close of London equity trade, the DJIA, the S&P 500, and the Nasdaq Composite were all trading down 0.1%.
Unilever shares hit an all time high of 3,087.00 pence in London, and closed the day up 2.6% at 3,011.00p, making it the biggest gainer in the FTSE 100. The consumer goods giant reported a 12% increase in revenue for the first quarter of 2015, mainly thanks to helpful currency movements but also as improved sales in emerging markets lifted its underlying sales. The company said revenue rose to EUR12.8 billion, with 10.6% growth driven by favourable currency movements.
Drinks giants SABMiller and Diageo had contrasting fortunes, with SAB closing up 1.8% and Diageo down 2.8%.
Brewer SABMiller said revenue rose 4% in its recently-ended financial year, after growth accelerated in the fourth quarter thanks partly to double-digit growth in Africa and a return to lager volume growth in China. The company said group net producer revenue for the year to end-March rose 4% and beverage volume growth was 1%, helped by an improvement in the fiscal fourth quarter when revenue grew 6% and lager volume grew 2%.
Diageo said net sales grew in the nine months to March 31 thanks to acquisitions, but organic sales and volume declined. It said net sales grew 4.6% in the nine month period, driven by its acquisition of United Spirits, but declined 0.3% on an organic basis and were down 0.7% in its third quarter. Volume was down 1.7% in the nine month period and dropped 0.8% in the third quarter.
It was hit by a tough comparative figure in the UK, as well as a double-digit decline in Latin America where consumers are being hit by currency volatility and because some customers are holding high inventories. Asia Pacific continued to struggle after a decision to reduce the stock held by distributors there. This offset strong growth in Africa and a further improvement in North America that was driven by strong demand for Crown Royal Regal Apple, its Canadian whiskey infused with apple flavours. Sales of Smirnoff Red vodka continued to improve in the US, although this was offset by lower demand for Captain Morgan rum.
Pearson closed as the biggest faller in the FTSE 100, down 4.0%, after The Wall Street Journal reported on Wednesday that the Los Angeles school district is to end its use of content provided by Pearson under the Common Core Technology Project. The scheme, which had been projected to cost around USD1.3 billion, was aimed at providing every student in the school district with an iPad or laptop computer using voter-approved bonds. Apple Inc was providing the iPads to the district, with the curriculum provided by Pearson.
Defence engineering companies BAE Systems, down 3.1%, and Meggitt, down 3.1%, fell on the back of downgrades by UBS. The Swiss bank downgraded BAE to Neutral from Buy, saying it sees insufficient upside to the engineer's shares as they reach its 540.00 pence price target. BAE closed at 516.00p. UBS cut Meggitt to Sell from Neutral, saying it is difficult to see any value creation for a potential suitor, following speculation that the company could be a takeover target.
Debenhams shares touched a 15-month intraday high and closed as the second-best performing stock in the FTSE 250, up 6.7%. The department store operator reported a rise in profit for the first half of its financial year, as sales grew following a revamp of its promotional strategy and service improvements that drove higher sales of orders made online and collected in stores.
The company said pretax profit grew to GBP88.9 million in the 26 weeks to February 28, up 4.3% from GBP85.2 million a year earlier, as revenue grew to GBP1.33 billion from GBP1.30 billion. Like-for-like sales were up 1.3%, it said.
Telecom Plus was the worst-performing stock in the FTSE 250, down 20% at 785.00p, having hit a low of 725.25p, its lowest price since the end of May 2012. The utility provider said its profit in the recently-ended financial year will come in below its expectations due to energy price cuts it made in the fourth quarter and as warm weather cut energy usage by its customers.
The company now expects pretax profit excluding share incentive scheme charges and amortisation on its energy supply arrangements with nPower to be between GBP52 million and GBP53 million for the year to end-March. It said the figure also takes into account about GBP6 million of higher-than-expected leakage and theft in the gas system.
Petra Diamonds closed as the next biggest faller in the mid-cap index, down 10%. The diamond miner said its results for the current financial year are expected to be below the range of current market estimates due to poorer diamond grades it is finding at one of its mines, although it reiterated it is trying to tackle the issue and expects grades at that mine to improve in coming quarters.
On the AIM market, Madagascar Oil shares surged 88% after it said its development plan for the Tsimiroro oil and gas project in Madagascar has been approved. The company said it has been awarded the Development Mining Title for Block 3104 at the Tsimiroro site. It is the first production sharing contract to enter the development phase in the country and awards a 25-year development mining title, with potential extensions to enable a development period of up to 50 years.
Greece's financial woes were also in focus as the Financial Times reported that Greek officials have made an informal approach to the International Monetary Fund to delay repayments of loans to the international lender, highlighting the parlous state of Greek finances, but were told that no rescheduling was possible.
Citing officials briefed on the talks by both sides, the FT said Athens was persuaded not to make a specific request for a delay to the Fund, which is owed almost EUR1 billion in two separate payments due in May.
The news hit the German equity market, as bund yields dropped and Greek bond yields rose.
Greek finance minister Yanis Varoufakis is due to meet US President Barack Obama later Thursday.
In the economic calendar Friday, Japanese consumer confidence is due at 0600 BST, UK unemployment and wage data at 0930 BST before eurozone consumer prices at 1000 BST and US CPI at 1330 BST. After the close of London stock markets, theUS Reuters/Michigan consumer sentiment index is due to be released at 1900 BST.
In a very light corporate calendar, there are full-year results from Tex Holdings and Inspired Capital, and a trading statement from Acal.
By Neil Thakrar; [email protected]; @NeilThakrar1
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
PearsonUnileverPetra DiamondsDebenhamsBAE SystemsDiageoTelecom PlusMGGT.LSAB.LMOIL.L