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Reports UK

UK stock market morning note (April 23, 2014)

April 23, 2014, Wednesday, 07:20 GMT | 02:20 EST | 10:50 IST | 13:20 SGT
Contributed by SVS Securities

The FTSE 100 is called to open flat this morning with a raft of economic data and the ongoing situation in the Ukraine the main focus of investor attention. Overnight we had economic data out of China reporting that the HSBC flash manufacturing PMI came in at 48.3 for April, a slight uplift on the previous month, but still below the key 50 level expansion mark. The economic diary will now centre on the release of the Bank of England MPC meeting minutes, the state of the public sector finances, the CBI industrial order expectations survey and this afternoon in the US new home sales data. Commodity prices are flat to lower and on the foreign exchanges, the major currencies are trading within narrow ranges. It is a busy day for corporate news announcements.

Company Announcements

Sports Direct

Pre-Close Trading Update reports that group sales in the 9 weeks ended 30 March 2014 rose 10.3% to GBP360m with gross profits increasing 11.5% to GBP147m. It noted that whilst it retains the ability to invest in margin, inventory and group marketing to deliver long term sustainable growth, it is 'very confident' of achieving at least its full year internal underlying EBITDA target of GBP310m, before the charge for the Employee Bonus Share Scheme.


IMS reports that year-to-date trading continues to be in line with expectations although it noted North American currencies remain weak against sterling. The latter currently translates into a year on year impact on revenues of around GBP250m and for EBITA of about GBP25m for the full year. Order intake and forward visibility 'remain good' with the order book at the end of March 2014 standing at GBP4.2bn. The Foster Wheeler acquisition remains on track for completion in Q3 with integration planning 'well underway'. It added that it expects to see good underlying revenue growth from its existing operations in 2014, with ongoing strength in the oil and gas and clean energy markets. However, the mix of business may see a 'slight reduction' in group margins.

ARM Holdings

Q1 Results see group revenues up 16% yoy in dollar terms to USD305.2m and 10% in sterling terms to GBP186.7m. PBT rose 9% to GBP97.1m and it noted progress on its key growth drivers in the period. It added that assuming the outlook for the semiconductor industry in H2 improves as generally anticipated, it expects group dollar revenues for 2014 to be in line with market expectations.

Associated British Foods

Interim Results see group revenue 2% lower at GBP6.2bn with adjusted PBT up 4% at GBP468m. The dividend is raised 4% to 9.7p a share with adjusted EPS ahead 10% at 45.8p. It added that lower sugar prices will result in a 'substantial reduction' in profit from Sugar this year as previously indicated with the current strength of sterling, if maintained, having a greater impact on translation in H2. However, it noted that as Primark builds upon its success in H1, Retail profits are expected to be 'well ahead'. When combined with the improvements in Grocery and Ingredients plus a lower interest charge, it still expects adjusted EPS for the financial year to be similar to 2013.