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UK stock market morning note (February 12, 2013)

The FTSE 100 is called to open slightly lower this morning with investors looking to find a sense of direction. Overnight we had domestic economic news from the RICS showing that UK house prices hardly moved in January with the number of properties sold increasing and surveyors expecting both the level of transactions and prices to improve in the coming year. Investors will now look ahead to the main economic event of today which is the release of the latest domestic inflation numbers. These will be followed by ongoing European ECOFIN meetings, a speech from the ECB President this afternoon and at 7.00pm UK time publication of the US Federal Budget balance. Commodity prices are generally lower and on the foreign exchanges, the major currencies are trading in narrow ranges as the debate over currency manipulation continues.

Company Announcements

Barclays Strategic Review outlines several commitments for 2015. These include delivering a return on equity in excess of its cost of equity in 2015, which it has assumed will stay at the current 11.5% and reducing headcount by at least 3,700 in 2013 which is expected to result in a restructuring charge of close to GBP500m in Q1 2013. It added that it will also reduce the total cost base by GBP1.7bn to GBP16.8bn in 2015, accelerate its progressive dividend policy from 2014, focus investment in Africa, the US and UK and provide greater transparency and disclosure. It separately announced its 2012 full year results which saw adjusted PBT up 26% at GBP7.04bn but statutory PBT fall to GBP246m (2011: GBP5.88bn) on adjusted income 2% higher at GBP29.04bn. The core tier 1 ratio came in at 10.9% and the dividend is raised to 6.5p.

Dunelm Interim Results saw PBT up 14.6% to GBP59.8m on revenue ahead 13.4% at GBP340.1m and lfl sales growth of 2.2%. The dividend is raised 12.5% to 4.5p a share and there was continued growth in multi-channel sales (now 4% of revenues). It added that the final quarter of the financial year presents some 'challenging lfl sales comparatives', but with a significant new store growth opportunity and multi-channel agenda in place, it remains confident in the overall growth prospects of the business.

G4S London 2012 Games Security Contract. It has agreed a final settlement with LOCOG which will see the company incur an overall loss of GBP70m and has also incurred further separate costs of GBP11m and GBP7m. These will be taken in the 2012 accounts as an exceptional charge with GBP50m having been provided at H1.