UK stock market morning note (February 11, 2014)
February 11, 2014, Tuesday, 10:44 GMT | 05:44 EST | 15:14 IST | 17:44 SGT
The FTSE 100 is called to open higher this morning despite the lack of clear direction from markets overnight with Japan shut for a public holiday as investors look ahead to the testimony from the new US Federal Reserve Chair Janet Yellen. Overnight we had domestic data from the BRC reporting that retail sales across lfl stores rose 3.9% in January on a year ago with there being a clear divide between strong non-food sales and food. The CBI in a new forecast also revised up its estimate for UK GDP this year to 2.6% (2.4%) supported by an unemployment rate of 7% or below and a rise in business investment. Commodity prices are mixed and on the foreign exchanges, the pound and euro are both up against the dollar which is itself firmer against the yen as markets await Janet Yellen's first testimony as Chair of the Fed.
Barclays Final Results see adjusted PBT down 32% at GBP5.16bn due to costs to achieve its Transform programme and a 4% decline in income. It noted that 2014 will be another year of transition as it focuses on Balance Sheet optimisation, cost reduction and continued investment. It added that it remains committed to a 40-50% dividend payout ratio over time and expects to be at 40% from 2014 to allow focus on capital accretion.
Babcock IMS reports that it has traded well during Q3 with activity levels high in all divisions and despite the ongoing weakness of the South African rand, financial performance is in line with its expectations. It expects the net debt to EBITDA ratio at the year end to be around 1.5 times and the current order book currently stands at about GBP11.5bn. It added that the bid pipeline has increased to GBP18.5bn which together with the order book provide it with 'excellent' visibility over future revenue streams.
Dunelm Half Year Results sees operating profit increase 4.5% to GBP62m with PBT ahead 2.9% at 61.6m on revenue up 4.8% at GBP356.3m. Like for like sales were down 0.9% but Q2 saw growth of 2.9%. The interim dividend is raised 11.1% to 5p a share and noted continued growth in multi-channel sales with an enhanced online offer. It added that whilst it was cautious about consumer spending trends overall, it had a high degree of confidence about its future growth prospects.