Date: Thursday 10 Jun 2010
Wednesday’s plunge in the value of its US stock shocked BP into issuing a statement this morning claiming it knows of no reason for the dramatic sell-off. BP shares slumped 16% in heavy US trade as rumours did the rounds that the Gulf of Mexico oil disaster could force the business into bankruptcy, or at the very least cause it to axe the dividend. The cost of the spill has now reached $1.43bn (£982m).
BP’s travails also seem to be affecting its sector peers as the likes of Shell, Tullowand BG Group also retreat.
Home Retail Group is another blue-chip getting a battering in an otherwise moderately buoyant market. The retailer complained of shoppers’ reluctance to part with their cash in uncertain economic times as it reported a decline in like-for-like sales at both its Argos and Homebase stores in the 13 weeks to 29 May. Argos like-for-like sales were down by 8.1% on a year ago, while DIY chain Homebase, suffered a less painful 1.4%, decline.
Fellow retailer Halfords is having a better time of it. The car parts and bicycle retailer said it is confident of future earnings growth despite the uncertain economic outlook after posting a sharp rise in profits and revenues in the year to April 2. Pre-tax profits climbed to £117.1m from £92.4m on revenues that were up to £831.6m from £794.7m.
Also on the upturn is British chip maker ARM Holdings on the revival of the old rumours of a bid from US consumer electronics giant Apple.
Electronic and industrial components supplier Premier Farnell issued a confident outlook for 2010 as quarterly profit more than doubled. Total profit before taxation rose to £22.2m in the three months to the end of April 2011 from £9m the year before. Revenue advanced 20% to £244.9m.
Soap maker PZ Cussons said results for the year ended 31 May 2010 are expected to be in line with expectations despite deteriorating trading conditions in the UK. The UK trading environment remains competitive with a worsening consumer outlook, the group said but on a brighter note saw strong growth in its brands such as Imperial Leather, Carex, Original Source, Charles Worthington and The Sanctuary.
Britain’s biggest coal miner UK Coal and energy sector support services groupHargreaves Services no longer intend to merge, the companies announced this morning. Hargreaves said that ‘while recognising that UK Coal has many valuable assets, it does not intend to pursue such a merger.’
Chapelthorpe showed profits for the first time in six years, triggering the polypropylene fibre manufacturer to recommence dividend payments in current financial year. Lower cost of sales and operating expenses helped the group post profits of £709,000 against the £3.3m loss last year
Avocet Mining rebuffed press speculation that it has sold its South East Asian mines and that the company itself was on the verge of being sold. The mining firm said these reports are “incorrect and without foundation.”
Shares in components firm Elektron rose 2.5% after it reported a surge in orders for the year to date and said it is well positioned for future growth.
On the economic front the Bank of England’s Monetary Policy Committee, as expected, left its interest rate and quantitative easing policies unchanged.
FTSE 100 - Risers
ARM Holdings (ARM) 302.40p +10.36%
Autonomy Corporation (AU.) 1,895.00p +3.72%
Aggreko (AGK) 1,476.00p +2.86%
Burberry Group (BRBY) 768.00p +2.81%
Eurasian Natural Resources (ENRC) 1,007.00p +2.55%
Kazakhmys (KAZ) 1,132.00p +2.35%
InterContinental Hotels Group (IHG) 1,135.00p +2.34%
Smiths Group (SMIN) 1,064.00p +2.21%
Fresnillo (FRES) 1,004.00p +2.19%
National Grid (NG.) 494.70p +2.17%
FTSE 100 - Fallers
BP (BP.) 370.00p -5.50%
Home Retail Group (HOME) 226.70p -4.75%
Royal Dutch Shell 'B' (RDSB) 1,684.00p -1.12%
Morrison (Wm) Supermarkets (MRW) 263.90p -1.05%
Sainsbury (J) (SBRY) 321.50p -0.96%
Royal Dutch Shell 'A' (RDSA) 1,759.50p -0.62%
Alliance Trust (ATST) 312.20p -0.51%
Tullow Oil (TLW) 1,115.00p -0.45%
BG Group (BG.) 1,060.00p -0.42%
Imperial Tobacco Group (IMT) 1,903.00p -0.37%
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