London open
City sources predict FTSE 100 will open up 6 points from yesterday’s close of 5,314.
City sources predict FTSE 100 will open up 6 points from yesterday’s close of 5,314.
Stocks to watch
Mobile phone network operator Vodafone returned to organic revenue growth in the April to June quarter of 2010 for the first time since the near global recession. Group revenue increased by 4.8% to Ł11.3bn and group service revenue increased by 4.9% to Ł10.6bn. On an organic basis, service revenue increased by 1.1% as each of the regions delivered improved service revenue trends.
United Utilities says current trading reflects lower prices for 2010/11, revenue pressures from reduced water volumes, bad debt and anticipated rise in property rates. However, the firm, which revealed a drop in full-year profits in May due to high borrowing costs, said these negatives are being partly offset by a drop in power costs..
Britvic saw revenue increase by 16.2% from a year earlier to Ł289.5m in its third quarter. The underlying GB, International and Irish businesses saw a combined revenue increase of 6.9%.
In the Press
British Airways has issued legal proceedings against 24 rival airlines that it claims should share potential damages arising from a price-fixing lawsuit, The Times has learnt. BA has been sued by about 250 companies after it pleaded guilty in the United States to being part of a cartel that fixed the price of cargo. The airline has issued proceedings, called a Part 20, to enjoin the other alleged conspirators in the damages lawsuit. Air France, Qantas, Lufthansa, Cathay Pacific and Singapore are among the airlines to have been added as defendants to the suit.
Public spending cuts and tax increases should be imposed immediately across the industrialised world as evidence of a healthy European recovery mounts, according to Jean-Claude Trichet, president of the European Central Bank. Trichet told the FT that policymakers who want to prolong the stimulus are mistaken and that cutting borrowing would have “very limited” effects on growth. The view from Europe’s senior economic policymaker contrasts with continued US demands for fiscal tightening to be delayed at least until 2011 and suggests there is still little agreement over the best way to foster a strong global recovery from the financial and economic crisis of the past two years.
BP’s deep-sea efforts to plug its ruptured oil well in the Gulf of Mexico are being hampered by a tropical storm brewing in the Caribbean, officials have admitted. Government and BP officials have been anxiously watching to see whether the bad weather in the Caribbean becomes a tropical storm and veers towards the Gulf, the Telegraph reports.
Newspaper tips
Yesterday’s interim results from Capita provided fuel for the bulls. The company reported the strongest bid pipeline for many years – up 47%, compared with the same point last year, to Ł4.4bn. The interim numbers were in line with City expectations on the revenue front – but profits were ahead of forecasts. The shares are trading on a December 2010 earnings multiple of 17.2, falling to 15.5 next year. Although there are undoubtedly challenges ahead, there are also many opportunities for outsourcers and the shares remain a buy, says the Telegraph.
Kingfisher’s 2011 multiple of 11.8 times forecast earnings represents a slight premium to the sector, many City analysts think this is justified by its global reach, its potential to improve its gross margins through group sourcing, for example, and its enviably strong balance sheet. Despite Kingfisher facing a tough consumer environment in the UK and in other countries this year, its share price is set to rise – albeit modestly – so buy says the Independent.
Mobile phone network operator Vodafone returned to organic revenue growth in the April to June quarter of 2010 for the first time since the near global recession. Group revenue increased by 4.8% to Ł11.3bn and group service revenue increased by 4.9% to Ł10.6bn. On an organic basis, service revenue increased by 1.1% as each of the regions delivered improved service revenue trends.
United Utilities says current trading reflects lower prices for 2010/11, revenue pressures from reduced water volumes, bad debt and anticipated rise in property rates. However, the firm, which revealed a drop in full-year profits in May due to high borrowing costs, said these negatives are being partly offset by a drop in power costs..
Britvic saw revenue increase by 16.2% from a year earlier to Ł289.5m in its third quarter. The underlying GB, International and Irish businesses saw a combined revenue increase of 6.9%.
In the Press
British Airways has issued legal proceedings against 24 rival airlines that it claims should share potential damages arising from a price-fixing lawsuit, The Times has learnt. BA has been sued by about 250 companies after it pleaded guilty in the United States to being part of a cartel that fixed the price of cargo. The airline has issued proceedings, called a Part 20, to enjoin the other alleged conspirators in the damages lawsuit. Air France, Qantas, Lufthansa, Cathay Pacific and Singapore are among the airlines to have been added as defendants to the suit.
Public spending cuts and tax increases should be imposed immediately across the industrialised world as evidence of a healthy European recovery mounts, according to Jean-Claude Trichet, president of the European Central Bank. Trichet told the FT that policymakers who want to prolong the stimulus are mistaken and that cutting borrowing would have “very limited” effects on growth. The view from Europe’s senior economic policymaker contrasts with continued US demands for fiscal tightening to be delayed at least until 2011 and suggests there is still little agreement over the best way to foster a strong global recovery from the financial and economic crisis of the past two years.
BP’s deep-sea efforts to plug its ruptured oil well in the Gulf of Mexico are being hampered by a tropical storm brewing in the Caribbean, officials have admitted. Government and BP officials have been anxiously watching to see whether the bad weather in the Caribbean becomes a tropical storm and veers towards the Gulf, the Telegraph reports.
Newspaper tips
Yesterday’s interim results from Capita provided fuel for the bulls. The company reported the strongest bid pipeline for many years – up 47%, compared with the same point last year, to Ł4.4bn. The interim numbers were in line with City expectations on the revenue front – but profits were ahead of forecasts. The shares are trading on a December 2010 earnings multiple of 17.2, falling to 15.5 next year. Although there are undoubtedly challenges ahead, there are also many opportunities for outsourcers and the shares remain a buy, says the Telegraph.
Kingfisher’s 2011 multiple of 11.8 times forecast earnings represents a slight premium to the sector, many City analysts think this is justified by its global reach, its potential to improve its gross margins through group sourcing, for example, and its enviably strong balance sheet. Despite Kingfisher facing a tough consumer environment in the UK and in other countries this year, its share price is set to rise – albeit modestly – so buy says the Independent.
For now, the market is inclined to give Tate & Lyle’s chief executive Javed Ahmed the benefit of the doubt. The shares are selling on a little more than ten times’ earnings and have the support of a yield of more than 5%. Worth picking up, especially on further weakness says the Times.
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