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Reports UK

UK stock market morning note (August 12, 2014)

August 12, 2014, Tuesday, 07:20 GMT | 02:20 EST | 11:50 IST | 14:20 SGT
Contributed by SVS Securities

The FTSE 100 is called to open flat this morning following the lack of clear direction on Wall Street and in Asia. Overnight we had domestic economic news out from the BRC reporting that retail sales in July fell 0.3% on a lfl basis from a year ago with total sales up 1.3% and the three month average total sales growth of 1.3%, below the 12 month average of 2.3%. Food sales drove the decrease, driven partly by price competition but online sales of non-food rose 14.9%. There is no other major economic data due for release today. Commodity prices are flat to lower and on the foreign exchanges, the dollar is higher against the pound, euro and yen but all are trading within ranges. Prudential is due to announce its Half Year Results this morning.

Company Announcements


Half Year Results see revenue up 6.5% and 7.1% on a lfl basis to GBP1.28bn with underlying PBT ahead 23.5% at GBP41.5m. The interim dividend is also raised 23.5% to 1.42p a share and stated its strategic initiatives were ahead of target and it had delivered a GBP3m net benefit in H1. It noted that for the full year it now expects to deliver a net benefit of around GBP7m, above the upper end of its previous GBP1-5m range. It added that trading conditions in the UK have continued to gather momentum, led by the housing market revival and as anticipated, conditions in Mainland Europe remain variable with the French construction market expected to weaken further in H2. Despite a challenging French market backdrop and exposure to currency headwinds, it stated that the H1 performance and strategic initiatives provided it with a strong base on which to achieve its full year expectations.


Half Year Results see adjusted PBT down 74% at GBP33.3m on adjusted revenue 5% lower at GBP2.43bn. The interim dividend has been maintained at 3.1p a share and it saw GBP2.5bn of contact awards in the period with the order book level at GBP17.1bn giving 2014 revenue visibility of 96%. It noted that these were 'poor' results and whilst many challenges and uncertainties remain, it was maintaining guidance for the full year. It added that its Strategic Review is expected to be completed in time for its full year results and to the extent that there are financial consequences of this review, these may impact its currently stated expectations for the year. It also separately announced the appointment of Angus Cockburn as CFO from the end of October, the current interim CEO of Aggreko to work again with Rupert Soames, Serco's Chief Executive.

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