London Market Open Report

London open: Water groups fall

London’s top stocks have opened slightly lower, with utilities among the main fallers after Ofwat called for lower water bills.

The water regulator outlined proposals that would see the average water bill fall by Ł14 to Ł330 before inflation between 2010 and 2015. United Utilities is leading the fallers, while Severn Trent, Pennon Group and Northumbrian are also down.

On the positive side, miners Fresnillo, Kazakhmys, Vedanta Resources, Rio Tinto, BHP Billiton and Anglo American are all among the top ten risers.

Bus and rail group National Express confirmed that it has received a second approach after rival FirstGroup walked away from a possible deal last night. “The group received an approach in connection with a possible offer for the group from another third party whose intentions are not yet known,” the statement reads. The Times is reporting that Stagecoach was named by transport industry sources as the interested party.

Kingfisher reported a 0.7% rise in like for like sales at B&Q in the UK, thanks to a growing trend for home and garden DIY. Total group sales rose 1% in constant currencies in the 10 weeks to 11 July, but fell 2% on a like-for-like basis.

Power supplier Scottish & Southern Energy said it is on course to achieve moderate profit growth for the year despite distributing less electricity in the three months to June 30.

Outsourcing group Capita saw its bid pipeline ease back a little but said demand for outsourcing remains buoyant, after announcing a 18% increase in interim underlying pre-tax profit. Profit before tax, excluding various charges, rose to Ł141.7m in the first half of 2009 from Ł120.2m in the first half of 2008.

Newspaper group Daily Mail and General Trust saw revenue decline sharply in the third quarter but said its business to business operations turned in a resilient performance. Revenue in the third quarter was down 13% on a year earlier to Ł520m, but was only down 3% in the business to business division. Trading in the consumer media division remains weak, however.

Catering giant Compass said operating profit, margins and free cash flow continued to grow in the third quarter while revenue growth slowed. The group, which provides catering for schools and offices, said in the first nine months of the year, revenue growth on a constant currency basis was 1.8%, and organic revenue growth was 0.8%.

Merchant bank Close Brothers has seen a strong performance from its Winterflood market making division while other parts of the business have performed broadly as expected.

BSS Group, distributor to the plumbing and construction markets, said it is growing market share albeit in declining markets. Revenue in the first 16 weeks of the company’s new financial year fell 5.6% to Ł369.5m, compared with a year earlier.

Specialist printer De La Rue said first quarter trading has been in line with company expectations.

Elsewhere, the Office of Fair Trading (OFT) has issued a supplementary statement of objections in relation to its investigation into dairy prices. The supplementary statement provides additional support to the OFT’s provisional finding that a number of parties colluded to increase the retail prices of various dairy products in 2002 and 2003, in breach of the Chapter I prohibition in the Competition Act 1998.

Supermarket chains Tesco and Wm. Morrison are disputing the OFT’s findings, whereas other parties named in the investigation have admitted their participation in some anti-competitive practices.

FTSE 100 - Risers
Invensys (ISYS) 256.75p +2.39%
Fresnillo (FRES) 604.00p +2.37%
Hammerson (HMSO) 329.25p +2.09%
Kazakhmys (KAZ) 754.50p +1.89%
Vedanta Resources (VED) 1,610.00p +1.51%
Rio Tinto (RIO) 2,350.00p +1.51%
Carnival (CCL) 1,731.00p +1.29%
BHP Billiton (BLT) 1,520.00p +1.16%
3i Group (III) 253.00p +1.10%
Anglo American (AAL) 1,862.50p +0.95%

FTSE 100 - Fallers
United Utilities Group (UU.) 480.25p -4.43%
Compass Group (CPG) 339.50p -3.76%
Severn Trent (SVT) 1,073.00p -3.59%
Pennon Group (PNN) 497.00p -2.07%
Pearson (PSON) 618.50p -1.59%
Capita Group (CPI) 702.00p -1.47%
Thomson Reuters (TRIL) 1,909.00p -1.39%
Inmarsat (ISAT) 541.00p -1.28%
Cadbury (CBRY) 554.50p -1.16%
British American Tobacco (BATS) 1,790.00p -1.16%