LONDON Market Open Report

London open: Early improvement

UK shares have started to edge higher after an initial pause as investors weigh up a flood of results from some of the country’s biggest companies.

Schroders leads the way following a smaller than expected 19% drop in third quarter profit. The fund manager made a profit before tax and exceptional items rose to Ł57.8m in the three months to 30 September. Funds under management were up 23% from the end of June to Ł138.9bn as net inflows hit Ł7bn.

Banking titan HSBC is catching up though after it said underlying third quarter profit was “significantly” ahead of the same time last year. It’s also seeing some stabilisation in its bad debts picture, especially in the US.

Barclays remains on course for a record-breaking year after third quarter profits came in close to market forecasts. For the three months to September, profits fell from Ł2.84bn to Ł1.56bn giving a nine-month total of Ł4.54bn (2008: Ł5,595m), a decrease year on year of 19% (Ł1,053m). But investors are unsure, leaving the shares in the red.

Mobile phone network Vodafone traded in line with expectations during the first half of its fiscal year, raising revenue by over 9% and adjusted operating profit by 2.4%. It expects full-year profit to be between Ł11-11.8bn, but the shares are under pressure early on.

Gold miner Randgold Resources said gold sales in the third quarter were in line with those seen in the second quarter. Sales of $103.5m were up 32% in the third quarter of last year, but profit for the quarter was $13.6m, down from $18.9m in the second quarter but a turnaround from last year when the third quarter saw a loss of $0.68m.

Back on a brighter note, Imperial Tobacco boosted full-year profit before tax by 52% thanks to the acquisition of Franco-Spanish rival Altadis. The cigarette maker has also announced the departure of its CEO. Pre-tax profit for the 12 months ended 30 September jumped to Ł945m from Ł621m in 2008 on revenue up 29% to Ł26.52bn, reported the firm, best known for its Lambert & Butler cigarettes.

International hotels group InterContinental Hotels continued to see revenue per available room (revPAR) slide in the third quarter. RevPAR in the third quarter of 2009 fell 15.2% at constant currency rates. ‘The trading environment remains challenging. We see signs of occupancy stabilising, but rate is still under considerable pressure across the board,’ said Andrew Cosslett, chief executive of the group.

There are big gains for Yellow Pages group Yell. The mid-cap is raising Ł660m through the issue of 1.572bn new shares at 42p, much more than it originally indicated. Half of the money, Ł330m, will be raised through a firm placing while the remainder will come from a 1 for 1 placing and open offer.

Engineer and ceramics group Cookson is also pushing higher. It expects trading profit this year will be at the upper end of market forecasts and near to Ł110m after a stronger than anticipated rally in sales over the past three months.

Northern Foods said like-for-like sales increased 2.9% in the half year, led by strong growth in its Chilled and Bakery division. In the 26 weeks ended 26 September 2009 profit from operations at the biscuits, pizzas and Christmas puddings maker rose 2% to Ł20.5m while total sales slipped to Ł466.9m from Ł468.6m the same period last year, reflecting 'mothballing of Fenland last year.'